Archives for August 2018

The peso, which has lost over half its value against the US dollar since the start of the year, plunged more than 15 percent following news of the rate hike. It was trading at 38.53 peso per dollar on Friday.

Argentina’s central bank, which on Thursday sharply raised interest rates from 45 to 60 percent, said the move was in “response to the foreign exchange rate situation and the risk of greater inflation.”

Global debt balloons to all-time high of $164 trillion

The regulator had already increased interest rates four times since April, most recently on August 13. The rate hikes were prompted by a sudden weakening in the peso after a drought hampered farm exports earlier in the year.

Investors are raising concerns that Buenos Aires could soon default as it struggles to repay heavy government loans. On Wednesday, Argentina’s government unexpectedly asked for the early release of a $50 billion loan from the International Monetary Fund (IMF).

The fund said it would look to “revise the government’s economic plan with a focus on better insulating Argentina from recent shifts in global financial markets.” Last month, the IMF said it expects Argentina’s economy to stabilize by the end of the year and a gradual recovery to begin in 2019.

Still, many in Argentina blame the IMF for encouraging fiscal policies that escalated the country’s worst economic crisis in 2001 when it suffered a record $100 billion debt default.

Argentine President Mauricio Macri attempted to calm the public in a televised address, saying: “I know that these tumultuous situations generate anxiety among many of you… I understand this, and I want you to know I am making all decisions necessary to protect you.”

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Article source: https://www.rt.com/business/437323-argentina-crisis-peso-crash/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

China’s crude oil futures launched in March, with crude set for delivery in September, the first month which the Shanghai International Energy Exchange (INE) designated for deliveries in order to allow the contract to develop and accumulate volumes for physical delivery.

The deliverability, the volume, and smooth process will be key to China fulfilling its ambition to have the yuan-priced oil futures contract become a major crude benchmark on a global scale like the Brent and WTI benchmarks, analysts told Reuters.

China’s petro-yuan oil contracts surge as US sanctions hit Iran

The first such test will be next month, during which Chinese companies, including state-held majors, will deliver oil against the Chinese oil futures contract to storage facilities that are among the eight sites that the Shanghai exchange has approved for cargo delivery in the futures contract, according to sources.

Unipec, the trading unit of Asia’s biggest refiner Sinopec, plans to deliver some 200,000 barrels of Iraqi grade Basra Light to Sinopec-held storage tanks at an island off the eastern province of Zhejiang.

Each of CNPC Fuel Oil, Zhenhua Oil, and unidentified private firm will deliver 100,000 barrels of Basra Light into CNPC Fuel Oil-operated storage farm in the southern port of Zhanjiang, while CNPC’s trading arm Chinaoil will deliver 100,000 barrels of Oman crude to storage tanks in the northeastern city of Dalian, the sources said.

It is not immediately known who will be taking the oil that the companies will deliver against the yuan-denominated oil futures contract.

Analysts have flagged storage costs in China as one of the problems that traders could face in the delivery mechanism of the Chinese oil futures contract. Storage costs in China are much higher than elsewhere. The reason for the higher cost is limited storage capacity availability and the requirement that the cargo be stored at a specific storage facility rather than at any available.

This article was originally published on Oilprice.com

Article source: https://www.rt.com/business/437250-china-oil-futures-petro-yuan/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The new legislation allowing land seizure without compensation, which was proposed by the ruling African National Congress (ANC) as early as 2015 and supported by President Cyril Ramaphosa, is currently on hold pending further review.

The law, if passed, will allow South African authorities to seize lands from white farmers and redistribute them to the country’s black population without any compensation for the owners

Trump’s tariffs may kill farming in South Africa sooner than land confiscation

The proposed land reform has pitted radical groups among black South Africans ready to take land by force against white farmers who are ready to protect their property.

“We will take the land by force,” Peter Seolela, a member of the Economic Freedom Fighters party, told London-based television channel ITV. “We will not be embarrassed by this. It is our land and we want it now.”

The disputed land reform is an attempt by the South African government to address what they see as continuing injustice in the country, more than two decades after the end of apartheid. The policy of strict racial segregation, by which the country’s white minority held power, was abolished in 1994.

Much of the farmland in South Africa is still owned by the country’s white minority. President Cyril Ramaphosa pledged to answer the frustrations of the landless black majority, vowing to alter the South African constitution, inevitably sparking fears among the country’s white population.

“This land is bought and paid for. I have the title deeds that go back four generations,” said Bernadette Hall, whose husband was reportedly murdered by armed raiders six years ago.

“I lost my husband and now they want to take my farm,” Hall told the media. “I’ve put my blood and my sweat and everything into this. They might as well slit my throat and have done with it.”

Earlier this week, the ANC said the land reform bill had been withdrawn by the Portfolio Committee on Public Works pending further study, but reiterated its commitment to pursue the controversial program.

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Article source: https://www.rt.com/business/437237-south-africa-land-violence-takeover/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Cyprus was the second-largest investor at $219 million, followed by the Netherlands ($208 million), Austria ($59 million), Poland ($54 million), France ($47 million) and Great Britain ($43.4 million).

The biggest investments were made in banking and insurance ($750 million or 60 percent), wholesale and retail trade (10 percent), manufacturing (8.2 percent) and IT (8 percent).

Ukraine threatens to sever profitable railway links with Russia

Data showed net inflow of funds into Ukraine in the first half of the year decreased by 31 percent compared to the same period a year earlier, at $922 million.

“Ukraine is actually on the verge of bankruptcy, so it takes money without being embarrassed, wherever it is possible,” journalist and political analyst Yuri Svetov told Sputnik.

He said that judging by the statements of Ukrainian politicians, Kiev takes this money “as some kind of Moscow’s ‘duty’ to Ukraine, which Russia is obliged to pay off following ‘centuries of oppression’.”

According to the expert, Russian businesses clearly have interests in Ukraine while for a long time the two countries had developed economic relations. Svetov, however, noted that Russian investments could be halted soon, “because we are now constantly hearing statements from the Ukrainian leadership about breaking of the Treaty on Friendship and Cooperation, and the possible termination of transport communications and so on.”

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Article source: https://www.rt.com/business/437227-russia-ukraines-major-investor/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The AA+ is the rating agency’s second-highest ranking, behind only a AAA rating. “The ratings reflect our opinion that NDB will establish itself as a catalyst in reducing the infrastructure deficits faced by its BRICS members,” SP said in a press release.

NDB was founded by the BRICS member countries (Brazil, Russia, India, China and South Africa) in 2014 and formally opened in Shanghai in July 2015. The goal of the bank, with an initial authorized capital of $100 billion, is to fund sustainable development infrastructure projects in emerging economies.

Overall, NDB has 23 projects costing $6 billion, including $1.7 billion in China and $1.8 billion in India. Each member country has a 20-percent shareholding and voting rights.

The agency has assessed the bank’s financial profile as “extremely strong,” acknowledging robust shareholder support as a key factor.

Commenting on the ratings, NDB’s President K.V. Kamath said: “Today marks a momentous step for NDB towards establishing itself as a premier multilateral development finance institution.”

BRICS gearing up for digital revolution

He explained that “given the scale of our future ambitions, the AA+ ratings from SP and Fitch put the bank in an exceptional position to mobilize financial resources at competitive rates thereby greatly enhancing our lending capacity to our members.”

Earlier this month, Fitch has assigned NDB a long-term issuer default rating (IDR) of AA+ with a stable outlook and a short-term IDR of F1+.

According to Kamath, the ratings also “mark the beginning of an exciting period for the bank wherein it will look to establish itself as a benchmark issuer in global capital markets. This milestone enables the bank to offer a full suite of financial products to its public and private sector clients.”

He said: “The AA+ ratings from the two agencies are a recognition of the bank’s strong financial profile as well as an endorsement of its prudent future growth plans and sound risk management practices.” He added: “We are proud of this exceptional achievement…”

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/437210-brics-bank-strong-rating/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

According to Russia’s economy ministry, Washington has misinterpreted the measures taken by Moscow, explaining that Russia complies with the WTO regulations.

“The United States misinterprets the nature of the measures taken by the Russian side. We are acting within the framework of the WTO Agreement on Safeguards, which allows compensating for damage from special protective measures taken by another country,” the ministry said.

Europe working on payment system alternative to SWIFT IMF to attain financial independence from US

In July, Russia raised tariffs from 25 to 40 percent on a number of US products in response to Washington’s levies on Russian steel and aluminum. Moscow appealed to the WTO to resolve the metal tariffs dispute.

Russia’s retaliatory measures, targeting $87.6 million worth of US goods, covers just a minimal part of Russia’s estimated losses of $450 million due to US metal tariffs. They include certain types of road construction machinery, oil and gas equipment, metalworking and rock drilling tools as well as optical fiber.

Moscow will reportedly impose further tariffs on $450 million worth of US imports if the WTO rules the US tariffs are illegal. Under the current rules, the $87.6 million in tariffs is the maximum amount a country can levy without the WTO decision.

Earlier this year, the White House slapped a number of trading partners with tariffs of 25 percent on imported steel and 10 percent on imported aluminum. They include Russia, China, India, the European Union, Canada, Mexico, South Africa, Turkey and South Korea. Washington explained the move was due to national security concerns. However, several countries affected by the levies have launched WTO complaints, accusing the US of protectionism.

Apart from the trade dispute, Moscow and Washington are involved in the worst diplomatic crisis since the Cold War. Over recent years, the US has imposed several rounds of sanctions against Russia over a number of accusations. They include involvement in the conflict in eastern Ukraine, reunification with Crimea, alleged US election meddling, a purported violation of sanctions against North Korea and alleged nefarious activity in cyberspace.

Moreover, the US State Department has recently banned the issuing of loans to Moscow, and US exports of weapons and dual-use products to Russia. The measure reportedly came amid Russia’s alleged involvement in the poisoning of former double-agent Sergei Skripal in the UK back in March.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/437147-us-files-wto-lawsuit-russia/?utm_source=rss&utm_medium=rss&utm_campaign=RSS