Currency convertibility – Kopa Runescape 2 Gold http://www.koparunescape2gold.com/ Mon, 27 Jun 2022 09:59:53 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://www.koparunescape2gold.com/wp-content/uploads/2021/07/kopa.png Currency convertibility – Kopa Runescape 2 Gold http://www.koparunescape2gold.com/ 32 32 Moody’s Affirms US Aaa Rating; maintains a stable outlook https://www.koparunescape2gold.com/moodys-affirms-us-aaa-rating-maintains-a-stable-outlook/ Sun, 26 Jun 2022 18:00:00 +0000 https://www.koparunescape2gold.com/moodys-affirms-us-aaa-rating-maintains-a-stable-outlook/ Moody’s Investors Service (“Moody’s”) today affirmed the Aaa long-term and senior unsecured issuer ratings from the United States of America (US) government. The outlook remains stable. The rating affirmation is driven by Moody’s view that the United States is emerging from the pandemic shock with its credit strengths intact, underpinned by exceptional economic strength, elevated […]]]>

Moody’s Investors Service (“Moody’s”) today affirmed the Aaa long-term and senior unsecured issuer ratings from the United States of America (US) government. The outlook remains stable.

The rating affirmation is driven by Moody’s view that the United States is emerging from the pandemic shock with its credit strengths intact, underpinned by exceptional economic strength, elevated institutional and governance strength, and the unique roles and central US dollar and US treasury bill market. in the global financial system, which, among other advantages, offers an extraordinary financing capacity. The strong US policy response to the pandemic supported a very quick and early recovery that avoided economic scarring and demonstrated the government’s ability to manage shocks. Moody’s expects the U.S. economy and sovereign credit profile to remain resilient to shocks, including current challenges to the global economy from persistently high inflation, tighter financial conditions and the invasion Russian from Ukraine. Risks to the US economy have increased significantly and could lead to a sharper-than-expected slowdown or even a recession due to further monetary policy tightening in the coming quarters. If they materialize, these risks would put additional pressure on the relatively fragile US fiscal position. However, according to Moody’s, US institutions, including the Federal Reserve, will be able to effectively manage these challenges and the US economy will demonstrate its resilience.

The stable outlook reflects Moody’s view that the diversity, vibrancy and competitiveness of the U.S. economy, together with the status of the U.S. dollar as the preeminent international reserve currency and the very significant size and depth of the market from the US Treasury, will continue to offset growing fiscal pressures. and periods of economic downturn. Following sharply widening fiscal deficits and rising debt burdens during the pandemic, deficit and debt ratios will improve in 2022 and 2023. However, U.S. fiscal strength is expected to deteriorate to an increasing rate over time as entitlement expenditures and interest payments result in persistent budget deficits, lack of material revenue or entitlement reforms. Diminishing confidence that U.S. policymakers will take effective action in coming years to reduce federal government budget deficits and the continued increase in the debt burden would signal an erosion of fiscal and institutional soundness, which would weigh on the sovereign’s credit profile.

US long-term caps in local and foreign currencies remain unchanged at Aaa. The Aaa local currency ceiling reflects a small government footprint in the economy, predictable and efficient institutions, very low external imbalances and low political risks, which reduce all risks posed to non-governmental issuers by actions or shocks. that would generally affect government and the private sector. The foreign exchange cap at Aaa reflects the country’s very strong political efficiency and open capital account which reduce transfer and convertibility risks to minimal levels. Its short-term foreign currency caps remain unchanged at Prime-1.
Source: Moody’s

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Moody’s confirms Bermuda’s A2 rating – The Royal Gazette https://www.koparunescape2gold.com/moodys-confirms-bermudas-a2-rating-the-royal-gazette/ Wed, 22 Jun 2022 18:47:36 +0000 https://www.koparunescape2gold.com/moodys-confirms-bermudas-a2-rating-the-royal-gazette/ Even without the biggest hotel on the island for perhaps the next 24 months and lingering concerns over “national” debt, a major rating agency has endorsed Bermuda as our future prospects. In fact, Moody’s Investors Service cited the strength of international trade, “the return of tourism” and a history of fiscal responsibility as key drivers […]]]>

Even without the biggest hotel on the island for perhaps the next 24 months and lingering concerns over “national” debt, a major rating agency has endorsed Bermuda as our future prospects.

In fact, Moody’s Investors Service cited the strength of international trade, “the return of tourism” and a history of fiscal responsibility as key drivers in affirming Bermuda’s government long-term issuer A2 ratings and debenture ratings. first-class. The outlook was kept stable.

Moody’s said a track record of fiscal consolidation will support debt stabilization, with the debt burden remaining in line with similarly rated peers.

The agency added that a buoyant international business sector and a rebound in tourism should support medium-term growth despite poor performance in recent years.

“The stable outlook reflects Moody’s expectation that fiscal consolidation efforts will stabilize debt around current levels, supported by moderate (economic) growth due to the rebound in tourism activity and growth in the business sector. international,” Moody’s said.

“Bermuda’s country caps remain unchanged. The country cap in local currency is positioned five notches above the sovereign rating at Aaa, reflecting economic fundamentals, institutional strength and limited government intervention. in economic activity.

“Also at Aaa, the countries’ ceiling in foreign currencies reflects a strong external position and a large stock of foreign assets, indicating that the risk of transfer and convertibility restrictions in times of crisis remains very limited.”

Moody’s assertion is the second to come from a major rating agency. Standard & Poors affirmed its ratings in Bermuda in May.

David Burt, Prime Minister and Minister of Finance, said: “Bermuda’s economy is moving in the right direction, and the government will deliver on its promise to deliver even more relief to working people while maintaining fiscal discipline.

Mr Burt added: “I welcome another independent validation of Bermuda’s economic strategy. Moody’s positive assessment of the government’s management of Bermuda’s economy reflects this government’s ability to manage the economic storms while caring for the most vulnerable in our community.

“It is important to note that these ratings were obtained despite the fact that the government had to increase the debt ceiling to borrow $200 million due to the guarantee on the failure of the Morgan’s Point project and the $44 million dollars taxpayers had to pay for Skyport, both projects inherited from the previous administration.”

Moody’s said: “From 2021, the government made progress towards fiscal consolidation as the pandemic shock subsided, reducing spending and the fiscal deficit. The budget for fiscal year 2023 incorporates a fiscal deficit of around 0.9% of GDP, a significant improvement from a deficit of over 1.6% in 2020.

“Moody’s expects the public debt burden to decline slightly and stabilize around 46% of GDP over the next two to three years. The government aims to achieve a balanced budget by fiscal year 2025 and a budget surplus of $50 million by fiscal year 2027.

“At this level of debt, Bermuda’s debt burden remains in line with the current median of A-rated peers of 49%. Given the context of the crisis, Bermuda’s recent track record of fiscal consolidation and our assessment of very strong institutions are critical. to our expectations of debt stabilization around the current level and gradual reduction.

“However, Bermuda’s interest burden will remain relatively high. The ratio of interest payments to government revenue will remain above 12%, compared to less than 6% for comparable countries.

“Over the next two to three years, Moody’s expects fiscal performance to be supported by the recovery in economic activity. Moody’s expects growth performance to regain momentum, relative to years previous years, supporting a trajectory of gradual decline in public debt.The tourism sector and investment in new hotels on the island are important drivers to improve growth prospects.

“While Bermuda’s direct exposure to the tourism industry as a source of tax revenue is very limited, the sector still plays an important role in direct and indirect economic activity.

“Tourism’s direct and indirect contribution to GDP is around 17.3% of GDP, while the sector also employs around 21% of the workforce, including tourism-related sectors.

“The international business sector, which includes the insurance and reinsurance sector, accounts for about 25% of GDP, which has cushioned some of the impact of the pandemic shock on Bermuda’s economy compared to other economies dependent on tourism.”

Moody’s also noted: “Bermuda is a global center for the insurance and reinsurance industry and the sector remains attractive to new business.

“In the medium term, Bermuda will be able to take advantage of new opportunities in the insurance and reinsurance sectors, such as cyber and climate risk underwriting, which Moody’s plans to expand in the coming years, noting the strong growth potential of this sector. emerging sector in Bermuda.

“The recovery of the tourism sector and investments in new hotel developments will drive growth performance in the years to come.

“In 2021, the tourism sector has started to recover from the pandemic shock, and activity in the sector is likely to approach its pre-pandemic level in 2022.

“Moody’s expects tourist arrivals to be stronger in 2022 as the first quarter of the year showed improvements.

“In the first quarter of 2022, the total number of leisure arrivals increased to over 7,000 compared to only 1,734 in the first quarter of 2021.

“Externally, Bermuda’s highly competitive international insurance and reinsurance industries provide the island with steady and large flows of current account surpluses, which leaves Bermuda with a very strong external position.

“Over the past decade, the current account surplus has averaged almost 10.8% of GDP, supported mainly by compensation paid by international companies (primary income credits).

“Other important sources of balance of payments revenue include investment income earned by residents and local financial institutions on their overseas investments, and income related to tourism.

“In the fourth quarter of 2021, Bermuda’s current account recorded a surplus of $217 million. This represents a year-over-year increase of $6 million.

“At the end of the year in 2021, Bermuda’s net external position stood at $4.6 trillion, or nearly 64% of GDP. The sustainability of the economy’s external position will continue to depend primarily the performance of the IB sector and the attractiveness of Bermuda as a hub for international insurance and other financial services.”

Moody’s also provided a breakdown relating to ESG considerations.

He cited environmental risk exposure as moderately negative (issuer profile score E-3) due to Bermuda’s exposure to the tourism sector and the impact of sea level rise on its natural capital.

Bermuda’s exposure to social risks was rated neutral to low (issuer profile score S-2), due to the island’s exposure to risks related to an aging population, offset by strong results education and very high wealth.

Moody’s also said that Bermuda’s very strong institutions and governance profile support a rating of (G-1 issuer profile score) with strong institutional structure and political effectiveness.

The Prime Minister replied, “Moody’s assigns country ratings for Environment, Social and Governance (ESG) and Bermuda received the highest rating possible for governance.

“The report highlights that the government’s fiscal and economic policies are key to maintaining Bermuda’s resilience during very challenging times globally.

“The strength of Bermuda’s institutions, our solid institutional framework, our strong external position and our vast stock of assets are also themes that have been repeated.

“Overall, this report and the recent S&P report are a positive reflection of this government’s handling of our economy and prove that our economy is moving in the right direction.”

GDP per capita (PPP basis, USD 74,408 (2021) (income per capita)

Real GDP Growth: 4% (2021) (GDP Growth)

Inflation rate (CPI to December 2021): 2.7%

General government fiscal balance/GDP: -1.6% (2021) (also known as fiscal balance)

Current account balance/GDP: 3% (2021) (also known as external balance)

External debt/GDP: 135.2% (2021)

Economic resilience: baa1

Default history: No event of default (on bonds or loans) has been recorded since 1983.

On June 16, 2022, a rating committee was convened to discuss the rating of the Government of Bermuda. The main points raised during the discussion were as follows: The issuer’s economic fundamentals, including its economic strength, have increased significantly. The issuer’s institutions and governance strength have not changed significantly. The issuer’s fiscal or financial strength, including its leverage profile, has declined significantly. The issuer’s sensitivity to event-related risks has not changed materially.

Moody’s has also released commentary on factors that could lead to a rating change.

The agency said: “Positive rating pressure could materialize if the government demonstrates its ability to reverse the effects of the pandemic-induced economic shock on its fiscal metrics and implement revenue measures to achieve surpluses. budgets in a sustainable manner in order to meet its budgetary objectives.

“In addition, our assessment will take into account the trajectory of Bermuda’s debt metrics, particularly with respect to debt affordability, and evidence that its interest-to-income ratio is converging towards the level seen for its peers having a similar notation.

“The outlook could turn negative if fiscal trends deteriorate in coming years, causing Bermuda’s debt burden to deviate materially from that of peer countries. Continued weak growth performance would also limit fiscal performance and the credit outlook.

Moody’s report: Bermuda’s exposure to social risks was rated neutral to low (issuer profile score S-2), due to the island’s exposure to risks related to an aging population, offset by good school results and very high wealth.

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We need to optimize Africa’s payment and settlement system https://www.koparunescape2gold.com/we-need-to-optimize-africas-payment-and-settlement-system/ Wed, 22 Jun 2022 02:36:51 +0000 https://www.koparunescape2gold.com/we-need-to-optimize-africas-payment-and-settlement-system/ One of the factors that have hampered intra-African trade and kept it at its embarrassing level is the difficulties faced by the parties involved in such trade relations. Foremost among these are the challenges faced by business people when they want to make payments to companies located in other countries on the continent. Part of […]]]>

One of the factors that have hampered intra-African trade and kept it at its embarrassing level is the difficulties faced by the parties involved in such trade relations. Foremost among these are the challenges faced by business people when they want to make payments to companies located in other countries on the continent.

Part of the problem is often due to the lack of convertibility of African currencies, despite the existence of around 44 different currencies on the continent, and the demand of many traders to be paid in foreign currencies, especially the dollar. This preference for third currencies in African transactions has, to say the least, weakened the continent’s trading system and its currencies.

This was one of the reasons for the skepticism expressed by many towards the idea of ​​a continent-wide trading bloc, which eventually morphed into the African Continental Free Trade Area ( AfCFTA).

Today, this hurdle is being resolved as a system to ameliorate the above challenges has been introduced in the African financial system. This is the Pan-African Payment and Settlement System (PAPSS). It is a creation of the African Export-Import Bank (Afreximbank) designed to simplify intra-African trade by settling transactions in local currencies in the wake of the take-off of the AfCFTA.

This is a welcome development. It is clear that without the establishment of such a system, the dream of increasing intra-African trade from its current low level between 13% and 18% will remain a mirage. While Africa records such a low level of intra-continental trade, Asia and Europe, for example, are said to have increased theirs up to 59% and 69%, respectively.

Obviously, without this project, African producers will always prefer to sell their products to buyers from countries that have smooth trading systems with their respective countries. Similarly, importers from Africa will continue to prefer dealing with sellers from countries from which they can easily earn hard currency.

This payment system will reverse all that. This will relieve Africa of importing goods that can easily be produced locally. Thanks to it, African traders will be able to carry out transactions in local currencies. The effectiveness of this system can be attested to by the fact that a pilot program that took off with $500 million in West Africa already has 28 banks joining the platform. Likewise, there are reports that another 24 banks are in the process of signing up to the platform.

The decision to start this process on a pilot project is also commendable and shows the professionalism its proponents bring to the project. As they explained, the choice of the West African sub-region for the pilot is to subject the process to the complexities that characterize the rest of the continent, which they believe are found in this part of the continent. These complexities include a multi-currency, multilingual zone, five English-speaking countries and a French-speaking zone, with more than 60 French regulators in this zone. It is logical to expect that once the pilot project was able to handle such complexities, it would have paved the way for full-scale project implementation.

Often, the success of a continental project such as this is vitiated by the evasive attitude of national governments. This must not be the case with this project. The overriding consideration here must be the pursuit of increasing the level of trade between African nations.

This objective has great multiplier effects which include promoting industrial growth, economic diversification and specialization, job creation and improving the well-being of the average African. Since trade unquestionably remains one of the means of increasing prosperity between nations and since in trade relations all parties are potential beneficiaries, this impetus to raise the level of trade between African nations must be encouraged. Therefore, let every government on the continent give PAPASS all the assistance it needs to succeed. Funding is essential and we expect leaders to find a way to contribute financially to this. Indeed, a big motivation for African nations to show their commitment to PAPASS must be the current events unfolding in Ukraine and Russia. The raging war between the two countries has caused major disruptions in the global supply chains of industrial and consumer goods. It has, for example, raised the specter of food insecurity which now threatens the lives of millions of people around the world, including in Africa.

Consequently, countries are reassessing their trade policies, partnerships and alignments. They are reconnecting with parts of the world in efforts to discover markets that best serve their interests in the context of new global realities.

Africa should do the same. For Nigeria, the stakes are even higher in evolving scenarios. The country has become, in one way or another, the hub of African trade. From the country’s abundant natural resources such as oil and gas to agricultural raw materials and industrial products, Nigeria has the potential to meet the needs of many countries in Africa. For this reason, Nigeria should be at the forefront of countries that want this payment system to succeed.

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APICORP leverages its preferred creditor status and becomes the first financial institution in the MENA region to launch an A/B loan program https://www.koparunescape2gold.com/apicorp-leverages-its-preferred-creditor-status-and-becomes-the-first-financial-institution-in-the-mena-region-to-launch-an-a-b-loan-program/ Mon, 20 Jun 2022 09:47:17 +0000 https://www.koparunescape2gold.com/apicorp-leverages-its-preferred-creditor-status-and-becomes-the-first-financial-institution-in-the-mena-region-to-launch-an-a-b-loan-program/ Saudi Arabia – The Arab Petroleum Investments Corporation (APICORP), the region’s only energy-focused multilateral financial institution, has launched an A/B lending structure aimed at encouraging international debt financing in its member countries that have limited access to foreign currency debt. The A/B loan structure, which was unanimously approved by APICORP’s General Assembly at its last […]]]>

Saudi Arabia – The Arab Petroleum Investments Corporation (APICORP), the region’s only energy-focused multilateral financial institution, has launched an A/B lending structure aimed at encouraging international debt financing in its member countries that have limited access to foreign currency debt.

The A/B loan structure, which was unanimously approved by APICORP’s General Assembly at its last meeting in Jeddah on April 24, makes APICORP the first financial institution in the MENA region to offer this type of loan, in line with its desire to support the energy sector in its least developed member countries and encourage private sector participation for a more sustainable energy ecosystem.

Leveraging its preferred creditor status, the Company will offer the entire loan to the borrowing entity in two tranches, A and B, inviting private sector commercial financial institutions to participate in the B loan through a participation. APICORP will lead the negotiations and administer the entire loan and will be the lender of record.

Commenting on the ad, Khalid Ali Al-Ruwaigh, Managing Director of APICORP, said: “The new A/B loan is an important addition to APICORP’s wide range of innovative financial solutions to support the sustainable development of the region’s energy sector. By launching this new facility, we can offer our least developed member countries the most diversified sources of financing possible to finance the sustainable transformation of their energy sector.

“The new facility offers distinct benefits for all parties. Notably, private sector B-loan participants will benefit from unique privileges and immunities granted to APICORP by its member countries in its Establishment Agreement, including transfer and convertibility risk mitigation and certain tax benefits. This will encourage greater mobilization of funding from financial institutions that otherwise would not have participated for risk considerations, making A/B loans a very effective tool to help APICORP achieve its sustainability agenda on a business basis, added Mr. Al-Ruwaigh.

Participants in A/B loans are generally financial and credit institutions that do not have Multilateral Development Bank (MDB) status, such as commercial banks and national development finance institutions.

It should be noted that APICORP launched the Infra Initiative in partnership with the Islamic Development Bank earlier this year, a $1 billion private sector-focused program that aims to finance strategic utility projects with a limited access to international financing and to address the low participation of the private sector in the financing of energy projects.

To note: Clifford Chance LLP advised APICORP on the legal and structural aspects of the A/B loan. Clifford Chance’s team was led by Qudeer Latif, a partner in the firm’s Dubai office.

-Ends-

About APICORP:

The Arab Petroleum Investments Corporation (APICORP) is an energy-focused multilateral financial institution established in 1975 by the ten Arab oil-exporting countries. APCIORP’s mission is to support the sustainable development of the region’s energy sector and related industries through a range of financing and direct equity solutions, as well as research and advisory services. in terms of energy. APICORP applies best-practice ESG principles across all of its operations, with environmental and social projects representing 13% of its nearly US$4 billion loan portfolio that includes leading public and private sector partners in 25 countries . APICORP is also the only energy-focused financial institution in the MENA region rated “Aa2” by Moody’s, “AA” by Fitch and “AA-” by S&P.

View APICORP’s ESG Policy Framework here

For more information on APICORP, please visit: www.apicorp.org
For more information please contact:

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The long run of the economy | OnCubaNews English https://www.koparunescape2gold.com/the-long-run-of-the-economy-oncubanews-english/ Fri, 17 Jun 2022 20:37:42 +0000 https://www.koparunescape2gold.com/the-long-run-of-the-economy-oncubanews-english/ The Economic and social orientations opened this new stage of economic reforms 11 long years ago. Later, the approval of the Conceptualization and the National Economic and Social Development Plan became another point of reference. Later, after March 2020, it was the update of the strategy. During this eleven-year period, we have seen an American […]]]>

The Economic and social orientations opened this new stage of economic reforms 11 long years ago. Later, the approval of the Conceptualization and the National Economic and Social Development Plan became another point of reference. Later, after March 2020, it was the update of the strategy.

During this eleven-year period, we have seen an American president publicly declare that he was convinced of the failure of the policy towards Cuba that the administrations which preceded him had put into practice for the years 1960. Meanwhile, the other two presidents who followed him did their utmost to achieve what the administrations before Obama failed to achieve. The last of them, in that fledgling style of politics which characterized him, eliminated some of all the restrictions imposed by his predecessor.

Coinciding in time, the pandemic that disrupted the global economy taught us that we had enough strength to create vaccines that others, more powerful, could not produce. Today we have a vaccination coverage that no country in the Americas, North and South included, has reached.

Meanwhile, tourism disappeared and with it, but thanks to the “monetary reorganization“, the CUC and the stores in foreign currencies disappeared, to appear later “transformed into freely convertible currency and stores in freely convertible currency”. In the meantime, CADECA exchange houses have become a thing of the past. The physical dollars, those that come “from outside”, do not find a place in the banks and those that are in the banks do not find a way out of there and reach the population. Euros are preferred by the public because they can be converted into freely convertible plastic currency. In the end, by trying to have a single currency, we have at least three; trying to achieve a single exchange rate, we now have at least two; convertibility from one currency to another is not possible, at least for the public. Have we reached situations as extreme as that in a cafeteria in Terminal 3 of Havana International Airport where you have to pay in euros and change is given in Cuban pesos, which does nothing to contribute to this aspiration to recover tourism?

Shop products have also disappeared, of all. And also for quite some time and thanks to the innovation of capped prices, sweet potato has become invisible and almost all other higher ranked foods as well. The one that was the “national mammal” will take time to be within reach of most pockets because the sacrifice of breeding mothers for lack of food has caused us to lose what was one of the rare successes of Cuban breeding. Bottled water, in plastic bottles, is a rarity, so tourists will have to get used to “tap water” if they leave the hotel.

money matters

Debt to suppliers has reappeared, which has become heavier and does not contribute to the necessary attraction of foreign investors.

The society in which we live today presents notable differences with the one in which the Economic and Social Guidelines were discussed, enriched, modified and finally approved. It is more segmented in terms of income and interests, it has aged, its members are declining due to emigration which is difficult to control and which compromises the future if we look at the number of young people leaving.

Socialist state enterprise and development aspirations

Meanwhile, repeated attempts to transform/improve/the socialist state enterprise have yet to yield results, some end in losses, some are lost, and some with excess profits not always related to their effectiveness and compliance with the plan. This situation brings us to the same questions from more than four decades ago, who should be run by the state? How many should be left? How should this process be done? So many questions that are difficult to answer when for more than fifty years it has been understood, even if no scientifically proven argument proves it, that the number of public companies is decisive for the economic strength of socialism.

The trading system

Without a strong, dynamic and efficient public affairs sector, with adequate levels of productivity, it will be impossible to grow and without sustainable economic growth, the task of development will be very difficult.

And it’s not that what happened with MSMEs isn’t important; today there are nearly 4,000 companies. But like in other economies, MSMEs need these other major drivers to become their ‘customers’ and ‘suppliers’, which is not happening in our country with the necessary scale or complexity.

For this year 2022, the growth target is 4% compared to the previous year. This growth, clearly, intends to be achieved more by its own efforts, in a way breaking this old relationship of strong dependence that existed between GDP growth and export growth.

The orange line represents the GDP, the growth rate and the blue line the import coefficient.

I don’t think there is much evidence of steady and sustained growth of national economies with weak trading systems. I also don’t know of much evidence showing that economic growth can be achieved without corporations making a profit.

If making profit is not one of the goals of business, even of a socialist state enterprise, and indeed a goal upon which life must depend, then how does it grow, reproduce, invest, innovate, modernize your technology, join global trends, for example Industry 4.0? How to conquer national and foreign markets? How do you improve jobs and pay higher wages to those who contribute to its profits, to its workers, which is one of the ways to preserve “the most valuable asset a company has”?

What would he do if he didn’t make a profit? Continue according to the state budget? From this same budget that in 2020 transferred to the “non-budgeted sector” 14.065 billion pesos, this represents 35% of total expenditure.

It is not possible to claim to have strong trading systems without an adequate institutional framework.

By dint of detecting obstacles, we have become specialists. We seem to be less adept at structuring the “rules of the game” that keep obstacles from perpetuating themselves.

Dr C Juan Triana Cordovi

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Sri Lanka to establish fuel ‘quotas’ in its rationing plan: minister https://www.koparunescape2gold.com/sri-lanka-to-establish-fuel-quotas-in-its-rationing-plan-minister/ Mon, 13 Jun 2022 00:39:14 +0000 https://www.koparunescape2gold.com/sri-lanka-to-establish-fuel-quotas-in-its-rationing-plan-minister/ ECONOMYNEXT – Sri Lanka plans to issue a fuel ‘quota’ from July 2022 after customers register, Energy Minister Kanchana Ratwatte has said, as foreign exchange shortages persist after the failure of a floating within the framework of a repurchase obligation. Sri Lanka faces long queues for petrol, diesel and liquefied petroleum gas as the country […]]]>

ECONOMYNEXT – Sri Lanka plans to issue a fuel ‘quota’ from July 2022 after customers register, Energy Minister Kanchana Ratwatte has said, as foreign exchange shortages persist after the failure of a floating within the framework of a repurchase obligation.

Sri Lanka faces long queues for petrol, diesel and liquefied petroleum gas as the country suffers the worst currency crises in the history of the island’s old central bank 72 years old.

“We have no choice but to register consumers at service stations and give them a guaranteed weekly quota until we are able to strengthen the financial situation, restore electricity 24h /24 and a steady supply of fuel,” Minister Wijesekera said in a post on twitter.com. .

“I hope to have this system in place by the 1st week of July.”

The Sri Lankan rupee fell 200 to 370 against the US dollar after an attempt to float the currency with a buyback obligation.

A float requires a complete suspension of convertibility, but a surrender rule makes the regime an anchor and pushes it down. (Colombo/Jun 13/2022)

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Buenos Aires Weather | Closest in blood, closest in blood https://www.koparunescape2gold.com/buenos-aires-weather-closest-in-blood-closest-in-blood/ Fri, 10 Jun 2022 02:06:45 +0000 https://www.koparunescape2gold.com/buenos-aires-weather-closest-in-blood-closest-in-blood/ No less than 12 of the 20 Frente de Todos ministers who were sworn in 30 months ago yesterday are now gone and yet none of these twelve changes make the wheels seem to have deteriorated more than the loud expulsion of the weekend -end of the Minister of Productive Development Matías Kulfas. The infighting […]]]>

No less than 12 of the 20 Frente de Todos ministers who were sworn in 30 months ago yesterday are now gone and yet none of these twelve changes make the wheels seem to have deteriorated more than the loud expulsion of the weekend -end of the Minister of Productive Development Matías Kulfas. The infighting takes on new dimensions when the two wings of the ruling coalition accuse each other of the same crime – namely favoring the multinational Techint for the metal casing of the Néstor Kirchner gas pipeline after previously overlapping approvals due to much of the lack of other options.

The political nature of this dispute over the pipeline tender was evident from the outset due to the gross technical ignorance displayed by both sides – confusion between millimeters and inches, tube diameters and metal thickness, but this column will not expand this in order to avoid further errors. The May 30 resignation of pipeline project manager Antonio Prosnato over the hopelessly tangled bidding process marked the end of all technical criteria as politics completely took over.

Vice President Cristina Fernández de Kirchner wasted no time stepping into this vacuum for an outburst of “national and popular” rhetoric against the power in place (which never includes her), criticizing the government in general and Kulfas in particular for not pressuring Techint to return the favor of winning that tender by manufacturing the metal tubes here rather than in Brazil – as if any sane businessman would invest in building an entire plant to produce some $200 million worth of tubing with no clear prospect of anything beyond that. For some reason, Kulfas deviated from President Alberto Fernández’s (and his successor, Ambassador to Brazil and losing 2015 Peronist presidential candidate Daniel Scioli) usual scenario of turning the other cheek to such blows, pointing out that the tender had been led The way of Techint by energy officials who were vice-presidential loyalists of La Cámpora origin. This criticism and the accompanying suspicions of corruption are both valid enough, even if they are also littered with technical errors, but his clumsy way of making the point (in a very confidential way) allowed President Fernández to yield more easily to vice-presidential pressure.

Kulfas is a dead duck, but with both sides of the ruling coalition pressing corruption charges, Federal Judge Daniel Rafecas (despite being the presidential nominee for Attorney General) has no other choice. than taking up the case with the ex-minister as a star witness. Cristina Fernández de Kirchner won the day, but what about the aftermath? What was she trying to accomplish? The suspicions of corruption are clearly based on the sabotage of Techint’s tender in order to sneak into crony capitalism, of which a “national bourgeoisie” is its preferred synonym. But could it be that she’s trying to sabotage the deal (while torpedoing big business’ tentative presidential approaches) as an end in itself because, convinced of an inevitable defeat next year, she doesn’t want the next government is reaping the benefits of the pipeline?

If so, it takes the subordination of economics and everything else to politics to extremes with the supreme absurdity of this country having to spend billions of scarce dollars to import fuel when it has the second largest shale gas reserves in the world at Vaca Muerta which cannot be transported for lack of a pipeline that has become a political football – diesel shortages now crippling agricultural production are the most immediate expression of this madness with populist pricing for the culprit. Dollar scarcity is another nonsense with record exports, a trade surplus and all major debt payments deferred. There are no easy exchange rate options against this – a devaluation would only trigger runaway inflation as an overvalued currency stimulates demand and defends growth while supply dries up for lack of dollars and therefore inputs.

There isn’t much space left for the memory lane segment of this column to connect past and present. If there have already been a dozen ministerial changes in this government, there have been dozens in the 34 years of my Herald of Buenos Aires drafting experience from 1983. Any comparison with Kulfas should limit the scope to the economic sphere, but even here there were 27 ministers in those 34 years with the inherent instability of a volatile economy. Most of the changes were almost routine and few marked a change of direction – the exit of Bernardo Grinspun in 1985 marked the end of the heterodox economy of the democratic spring, the arrival of Antonio Erman González at the end of 1989 meant that Carlos Menem traded his corporate alliance for a fiscal rather than an economic focus and Ricardo López Murphy in 2001 made the ultra-Orthodox economy reign supreme for a fortnight. The real shocks to the system were the departures of two very successful ministers – Domingo Cavallo in mid-1996 and Roberto Lavagna in late 2005 – but these were motivated by political jealousy rather than a change of economic direction (which is why Cavallo was replaced by the very orthodox Roque Fernández, co-author of Convertibility, and Lavagna by a series of Kirchnerian courtiers). Thus, no economic policy in Argentina seems as dangerous as its total subordination to politics – this is what happened with Kulfas.

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Why Zimbabwe’s De-Dollarization Road Failed https://www.koparunescape2gold.com/why-zimbabwes-de-dollarization-road-failed/ Wed, 08 Jun 2022 06:07:31 +0000 https://www.koparunescape2gold.com/why-zimbabwes-de-dollarization-road-failed/ The Zimbabwean government has announced measures to promote wider use of the national currency (Zimbabwean dollar) in a last-ditch effort to save it from the onslaught of re-dollarization. Part of the measures now oblige businesses and individuals to pay customs and import duties in local currency using the interbank rate which is based on the […]]]>

The Zimbabwean government has announced measures to promote wider use of the national currency (Zimbabwean dollar) in a last-ditch effort to save it from the onslaught of re-dollarization. Part of the measures now oblige businesses and individuals to pay customs and import duties in local currency using the interbank rate which is based on the Willing Buyer Willing Seller (WBWS) model. This exchange rate changes daily, which means that fees will be adjusted frequently. Currently, there are at least 5 exchange rates prevalent in the Zimbabwean economy with the (official) auction rate set by the central bank at US$1: ZW$173.27, the bank-approved interbank rate exchange rate (ZW$277.03), Zimbabwe dollar exchange rate (ZW$360), parallel market rate (ZW$430) and e-money rate used for card payments (ZW$450) . Other exchange rates also apply on mobile money and foreign currency exchange in local hard currency Foreign Currency Accounts (FCAs). The disparities between these different exchange rates mean that the market has huge opportunities for arbitrage on the prices of various commodities and the stability of rice remains a dream.

Dedollarization attempt
In February 2019, the government re-launched the Zimbabwean dollar (monocurrency) and banned the use of multiple currencies through Statutory Instrument (SI) 142 of 2019. It took only a year for the government to rescind the ban with the promulgation of SI 85 of 2020. which allowed consumers to legally pay for goods and services in foreign currencies. Further regulations (SI 185 of 2020) then followed to require local businesses and individuals to price their goods and services using exchange rates determined by the central bank. What followed thereafter was a rapid decline in productivity due to a combination of factors conspiring around high inflation, exchange rate volatility and foreign exchange shortages.

Economic output fell from 4% growth achieved in 2018 to -6.5% recorded in 2019 and -6.2% according to official Treasury figures. Annual inflation rose from 57% in January to 521% recorded in December 2019. Tax revenue fell from US$5,237 billion collected in 2018 to US$2,691 billion collected in 2019. Inflation consumed household income, pension funds and corporate income, with the latter partially resorting to retrenchments to stay afloat. The World Bank estimates that cases of extreme poverty in Zimbabwe have increased from 4.7 million in 2018 to 6.6 million people in 2019 and 7.9 million in 2020. COVID-19 and droughts have exacerbated levels of poverty.

With inflation skyrocketing and the national currency devaluing, the writing was still on the wall. The dedollarization path was derailed soon after its launch due to the absence of various economic fundamentals that support the stability of a fiat currency, such as foreign exchange reserves, low levels of inflation, market confidence, the sustainable fiscal budget and the independence of monetary policy from the central bank. political interference. Various elements have destroyed confidence in the national currency and made de-dollarization a daunting task. These include:

Political will on the dedollarization plan
Apart from a leaked de-dollarization roadmap document, Zimbabwe has not implemented a long-term plan (5-10 year policy) on how to de-dollarize the local economy. The plan should have included institutional reforms at the central bank to ensure its autonomy from political interference and notable milestones on the building up of foreign exchange reserves, the establishment of a managed floating foreign exchange market, a framework of disinflation and monetary targeting, taxation in local currency, genuine budgetary consolidation (expenditure below tax revenue) and measures to promote the use of local currency. Besides the dedollarization plan, the underlying denominator of each policy is the political will to reform and implement the plan.

Lack of foreign exchange reserves
According to World Bank data, Zimbabwe had total reserves (gold and foreign exchange) of US$33.5 million in 2020. In 2018 (before the launch of the monocurrency), the figure was estimated at US$86.951 million. Americans. This figure equates to barely 1 month of import cover since 2019. Around the world, central banks are using foreign currency reserves to support fiat currency values, maintain export competitiveness, stay liquid in times of foreign currencies and give confidence to investors and the market. . They also need reserves to pay their external debts, raise capital to finance sectors of the economy and take advantage of diversified portfolios. To introduce the bonds in November 2015, Zimbabwe’s central bank pointed out that the country had secured a $200 million reserve facility to support the so-called export incentive. However, the International Monetary Fund (IMF) has said it is unaware of the existence of the African Export-Import Bank (Afreximbank) facility claimed by the Zimbabwean government. To date, the central bank does not disclose the value of the reserves it has, although this is a key mandate of the apex bank.

fear of the markets
To date, the government does not trust the market in several economic sectors. A dual currency economy should allow for smooth currency convertibility of one national currency into foreign currencies in the formal market. However, the central bank has not moved from a position where it wants to control the exchange rate to manage prices in the economy. To do this, the apex bank repeatedly fixed the currency rates or manipulated the official rate. This is what led to the collapse of the auction system and fuels the alternative market.

National currency printing
Reducing the money supply, targeting monetary policy, and ending quasi-fiscal activities that impact growing pressure on currencies are key to dedollarization. Over the past 3 years, broad money growth has averaged 350% relative to the decline in economic output. This growth in the money supply leads to sustained pressure on foreign currencies and a devaluation of the national currency. It remains the elephant in the room and will continue to be.

Taxation in foreign currency
The first holes on the road to de-dollarization were drilled by the government itself by levying licenses, taxes and permits in foreign currency. The government used the 2009 finance law to collect taxes (import duties, VAT, royalties and payroll taxes) in foreign currencies, in particular from importers of certain luxury goods, miners, tourism, hotels and the oil industry. The government justifies the taxation of foreign currency on its own foreign exchange requirements, but the government must allow free market price discovery for foreign currency so that government suppliers can also switch from payments made in local currency to foreign currency if necessary. Government suppliers would not require foreign currency if there was exchange rate stability for the national currency. Moreover, it is the role of the central bank as an agent of the government to procure foreign currency from the open market. Without levying taxes in the national currency, the government cannot convince market participants that it has confidence in its own monetary policy.

Exemption of certain sectors
The dedollarization plan was based on the creation of a market-oriented foreign exchange market so that all transactions in the economy could be carried out in a national currency. This is standard in most countries and a necessity to ensure that a national currency is required for local transactions. The Zimbabwean government has granted several exemptions to various sectors to openly use foreign currencies. These sectors included the oil sector where, to date, fuel is sold exclusively in foreign currencies. The government would not need to exempt any sector of the economy provided the foreign exchange market is market determined and the central bank controls the growth of the money supply.


Experiences from elsewhere

Forced dedollarization has had limited success. Countries that have attempted to force dedollarization have experienced financial disintermediation and capital flight. Some chose to reverse their policy a few years later to counter the adverse economic consequences. Zimbabwe was neither the first country to completely dollarize, nor the first to attempt to de-dollarize. Countries like Cambodia, Bolivia, Vietnam, Peru, El Salvador, and Chile (among several others) have already dollarized and attempted to de-dollarize. Dedollarization has never been successful as a policy, but as a benefit of pragmatic economic reforms. Only a handful (notably Israel, Poland, Vietnam and Georgia) have managed to fully de-dollarize due to a combination of factors such as free market policies, domestic money supply and macroeconomic stability, and strong institutions. Success was guaranteed by the political will to reform and to grant the central bank independence from monetary policy.

It is essential to stress that if the government avoids critical economic reforms, if there is no discipline in the money supply and confidence in monetary policy as there is in Zimbabwe, dedollarization will always be a impossible mission. The market will choose a foreign currency each day rather than a local currency. Dedollarization will never be a success if the government constantly interferes with monetary policy, dictates currency prices to the market, and maintains a local currency as a tool to print whenever the need arises.

Victor Bhoroma is an economic analyst. He holds an MBA from the University of Zimbabwe (UZ). Feedback: Email vbhoroma@gmail.com or Twitter @VictorBhoroma1.

All articles and letters published on Bulawayo24 have been independently written by members of the Bulawayo24 community. The opinions of users published on Bulawayo24 are therefore their own and do not necessarily represent the opinions of Bulawayo24. Bulawayo24 editors also reserve the right to edit or delete any comments received.

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“Complete dollarization of Zimbabwe’s economy will never happen” https://www.koparunescape2gold.com/complete-dollarization-of-zimbabwes-economy-will-never-happen/ Sat, 04 Jun 2022 19:08:44 +0000 https://www.koparunescape2gold.com/complete-dollarization-of-zimbabwes-economy-will-never-happen/ ZIMBABWEENS need to cherish the partial dollarization that is in place and stop dreaming of full dollarization, Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya said yesterday. Speaking during discussions at the Zimbabwe Chamber of Mines annual conference, which ends here today, Dr Mangudya said Zimbabweans were “full of negativity” about the problems happening […]]]>

ZIMBABWEENS need to cherish the partial dollarization that is in place and stop dreaming of full dollarization, Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya said yesterday.

Speaking during discussions at the Zimbabwe Chamber of Mines annual conference, which ends here today, Dr Mangudya said Zimbabweans were “full of negativity” about the problems happening in their country, which was not the case in countries that could face much worse problems than those experienced locally.

“Let’s cherish partial dollarization. As we continue under partial dollarization, let’s not undermine the other currency because of the US dollar,” Dr Mangudya said.

“The problem with Zimbabweans is that we always wish each other ill. When you listen to conversations, you just hear people say ‘zvakaoma’ (things are hard). There’s nowhere in the world where it’s easy.

“Just this other day, (US) President (Joe) Biden was concerned about infant formula shortages in his country. President Biden invoked the Defense Production Act to address infant formula shortages.”

The defense production law invoked by President Biden requires formula suppliers and manufacturers to fulfill orders from local companies before other customers, in order to remove bottlenecks.

The US President also authorized the US Department of Defense to use commercial aircraft to transport supplies of federally compliant formula from other countries to the United States in what was called “Operation Fly”. Form”.

The formula shortages were triggered by Abott Nutrition’s recall of the product for safety reasons and general supply chain challenges across the globe due to geopolitical issues in Eastern Europe where the Russia undertakes a special military operation in Ukraine.

Due to supply chain disruptions, gas, fuel and food prices have risen by around 40% globally, and cooking oil shortages have even been recorded in the UK.

Dr Mangudya said the price of a tonne of cooking oil has risen from US$900 in recent months to around US$2,000 today, due to supply chain disruptions. He said that since the challenges were global, there was no need to be “too negative”.

“The power of negativity overpowers positivity. We must be positive. As long as I live, I am positive. I thank the Lord for the gift of life. Why are we destroying our economy?

“We want to tame inflation, but it’s not just a matter of RBZ, it’s not a matter of government alone, it’s everyone’s task. Let’s defend our currency, we don’t want power inflation is eating us up.

“Who are these people who drive up inflation at night or in the morning? We are still looking for them and we have suspended some companies from borrowing from banks because they were borrowing speculatively.

Dr Mangudya said investigations into the companies’ illicit activities are still ongoing and the nation will be updated in due course.

Dr Mangudya said full dollarization was “not a vaccine” or a cure for inflation, but that confidence in the local currency was essential.

He gave the example of the American dollar which is not backed by anything, but which has value, thanks to people’s confidence in it.

Until 1971, the US dollar was backed by gold until US President Richard Nixon broke the direct convertibility of currency into gold to curb inflation and prevent foreign nations from overloading the system by trading their dollars for gold.

Dr Mangudya said full dollarization would be detrimental to the economy, as seen in the period 2009 to 2018, adding that apart from Panama which receives support from the United States, no other country had full dollarization.

“As Zimbabwe, we are alone and we cannot take the path of full dollarization. If you were dreaming of full dollarization in Zimbabwe, it must stop. Let’s stop the speculative attacks on our currency. People who indulge to speculative attacks on our currency are the same as witches.”

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Full dollarization will never happen: RBZ https://www.koparunescape2gold.com/full-dollarization-will-never-happen-rbz/ Fri, 03 Jun 2022 22:13:42 +0000 https://www.koparunescape2gold.com/full-dollarization-will-never-happen-rbz/ the herald Africa Moyo at VICTORIA FALLS ZIMBABWEENS need to cherish the partial dollarization that is in place and stop dreaming of full dollarization, Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya said yesterday. Speaking during discussions at the Zimbabwe Chamber of Mines annual conference, which ends here today, Dr Mangudya said Zimbabweans were […]]]>

the herald

Africa Moyo at VICTORIA FALLS

ZIMBABWEENS need to cherish the partial dollarization that is in place and stop dreaming of full dollarization, Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya said yesterday.

Speaking during discussions at the Zimbabwe Chamber of Mines annual conference, which ends here today, Dr Mangudya said Zimbabweans were “full of negativity” about the problems happening in their country, which was not the case in countries that could face much worse problems than those experienced locally.

“Appreciate partial dollarization. As we continue under partial dollarization, do not weaken the other currency because of the US dollar,” Dr Mangudya said.

“The problem with Zimbabweans is that we always wish each other ill. When listening to conversations, you just hear people saying “zvakaoma” (things are difficult). There is nowhere in the world where it is easy.

“Just this other day, (US) President (Joe) Biden was concerned about infant formula shortages in his country. President Biden invoked the Defense Production Act to address infant formula shortages.

The defense production law invoked by President Biden requires formula suppliers and manufacturers to fulfill orders from local companies before other customers, in order to remove bottlenecks.

The US President also authorized the US Department of Defense to use commercial aircraft to transport supplies of formula that meet federal standards from other countries to the United States in what was called “Operation Fly Formula”.

The formula shortages were triggered by Abott Nutrition’s recall of the product for safety reasons and general supply chain challenges across the globe due to geopolitical issues in Eastern Europe where the Russia undertakes a special military operation in Ukraine.

Due to supply chain disruptions, gas, fuel and food prices have risen by around 40% globally, and cooking oil shortages have even been recorded in the UK.

Dr Mangudya said the price of a tonne of cooking oil has risen from US$900 in recent months to around US$2,000 today, due to supply chain disruptions. He said that since the challenges were global, there was no need to be “too negative”.

“The power of negativity overpowers positivity. We must be positive. As long as I live, I am positive. I thank the Lord for the gift of life. Why are we destroying our economy?

“We want to control inflation; but it is not a problem of RBZ alone, it is not a problem of government alone, it is everyone’s task. Let’s defend our currency, we don’t want the power of inflation to devour us.

“Who are these people who drive up inflation at night or in the morning? We are still looking for them and we have suspended some companies from borrowing from banks because they were engaging in speculative borrowing.

Dr Mangudya said investigations into the companies’ illicit activities are still ongoing and the nation will be updated in due course.

Dr Mangudya said full dollarization was “not a vaccine” or a cure for inflation, but that confidence in the local currency was essential.

He gave the example of the American dollar which is not backed by anything, but which has value thanks to people’s confidence in it.

Until 1971, the US dollar was backed by gold until US President Richard Nixon broke the direct convertibility of currency into gold to curb inflation and prevent foreign nations from overloading the system by trading their dollars for gold.

Dr Mangudya said full dollarization would be detrimental to the economy, as seen in the period 2009 to 2018, adding that apart from Panama which receives support from the United States, no other country had full dollarization.

“As Zimbabwe, we are on our own and we cannot take the path of full dollarization. If you dreamed of full dollarization in Zimbabwe, it has to stop. Stop the speculative attacks on our currency. People who engage in speculative attacks on our currency are like witches. »

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