Connect with us

Economy

Cuba urges calm as overhaul of monetary system looms By Reuters

Published

on


© Reuters. People wait in line to enter a currency exchange office in Havana, Cuba

By Marc Frank

HAVANA (Reuters) – Cuba’s economy minister on Monday urged calm as the government prepares to unify its dual currency system and multiple exchange rates in hopes of improving economic performance.

The Caribbean island nation is undergoing a crisis caused by an onslaught of new U.S. sanctions on top of a decades-old embargo, the pandemic and its inefficient Soviet-style command economy.

Alejandro Gil, speaking during a prime-time broadcast on state-run television, said the country could not overcome the crisis without unification which he said included wage, pension and other measures to protect the population.

“It is a profound transformation that the economy needs that will impact companies and practically everyone,” Gil said.

“It is for the good of the economy and good of our people because it creates favorable economic conditions that will reverberate through more production, services and jobs,” he added.

The monetary reform, expected before the end of the year, will eliminate the convertible peso while leaving a devalued peso, officially exchanged since the 1959 Revolution at one peso to the dollar.

The soon to be removed convertible peso is also officially set at one to 10 pesos to the dollar for state companies and 24 pesos sell and 25 pesos buy with the population.

The government has stated numerous times that residents will be given ample time to exchange convertible pesos at the current rate once it is taken out of circulation and banks will automatically do the same with convertible peso accounts.

President Miguel Diaz-Canel said last week the country would end up with a single currency and exchange rate with the dollar but did not say what that rate might be or the date devaluation would happen.

Foreign and domestic economists forecast the move will cause triple digit inflation and bankruptcies while at the same time stimulating domestic economic efficiency and exports over imports.

The state controls the lion’s share of the economy and sets most wages and prices. Neither domestic currency is tradable outside Cuba.

“There will be no shock therapy here, the vulnerable will be protected. At the same time, it will favor motivation to work and the need to work to live,” Gil said.

Diaz-Canel announced in July that market-oriented reforms approved by the Communist party a decade ago and never implemented, including monetary measures, would be quickly put in place in response to the crisis. He said last week that monetary reform had now been approved by the all-powerful politburo.

Cuba, dependent on food, fuel and other imports has been caught short of cash as sanctions hit its foreign exchange revenues and the pandemic demolishes tourism and undermines remittances, creating food, medicine and other shortages.

Last year, the government began opening better stocked foreign exchange stores for people with access to dollars or a basket of other international currencies from remittances and other sources. However, all transactions must be electronic, for example through debit cards.

Foreign and local economists forecast economic activity will decline at least 8% this year, with trade down by around a third.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Economy

IMF endorses Japan PM Suga’s reform agenda, urges BOJ to review inflation goal By Reuters

Published

on

By


© Reuters. Japanese PM Suga walks past the Indonesian national flag as he arrives for a press conference in Jakarta

By Leika Kihara

TOKYO (Reuters) – The International Monetary Fund gave a thumbs-up on Wednesday to plans by new Japanese Prime Minister Yoshihide Suga to maintain the thrust of his predecessor’s “Abenomics” stimulus programmes, while pushing through reforms to revitalise the economy.

Odd Per Brekk, deputy director of the IMF’s Asia and Pacific department, also urged the Bank of Japan (BOJ) to consider reviewing its 2% inflation target to make it more flexible — repeating a recommendation made earlier this year.

“Such a review would provide the BOJ with an opportunity both to reconfirm its commitment to the target and to increase policy flexibility as needed,” he told Reuters in a written interview.

In succeeding Shinzo Abe as prime minister last month, Suga pledged to maintain the first two “arrows” of Abenomics – huge fiscal and monetary stimulus measures to prop up growth.

He also vowed to pursue a re-modeled version of structural reforms, such as steps to boost smaller firms’ productivity, promote digitalisation and consolidate regional banks.

“Giving renewed momentum to the ‘third arrow’ of structural reform would help in the recovery and in putting the economy on a longer-term growth path,” Brekk said.

“In this regard, reforms to promote the digital economy, revive regional economies, and deal with regional bank issues should be given high priority,” he said.

Labour market reforms, such as opening up more career opportunities for women and encouraging more telework, must also remain a priority, Brekk said.

Japan’s economy suffered its biggest postwar slump in the second quarter as the coronavirus pandemic slammed domestic and global demand, and analysts expect any rebound to be modest as uncertainty over the outlook weighs on consumption and capital spending.

FLEXIBLE TARGET NEEDED

The economy was already in recession before the health crisis due to the blow from last year’s sales tax hike. Regional banks are reeling from sluggish credit demand, a rapidly ageing population and narrowing margins from years of ultra-low interest rates.

With high uncertainty over the economic outlook, the BOJ should avoid a premature withdrawal of stimulus and wait until a recovery takes hold, Brekk said.

It could take additional steps if needed, such as an expansion of its special lending programmes, a cut in longer-term yield targets and an increase in purchases of exchange-traded funds, he said.

In the longer run, the BOJ should consider a review of its price target and policy framework to allow itself more room to address financial system risks, Brekk said.

Under yield curve control (YCC), the BOJ guides short-term rates at -0.1% and 10-year bond yields around zero as part of efforts to achieve its elusive 2% inflation target.

Years of heavy money printing and the adoption of YCC, however, have failed to fire up inflation, drawing criticism that the policies were doing more harm than good by hurting commercial banks and discouraging them from boosting lending.

Brekk’s comments followed those in a staff report in February, in which the global lender urged the BOJ to re-define its inflation target as a long-term goal with room for some allowances.

It said this would give the central bank more flexibility in whittling down stimulus to ease the pain on financial institutions.





Source link

Continue Reading

Economy

U.S. set to announce legal action on opioid maker By Reuters

Published

on

By


© Reuters. Signage is seen at the United States Department of Justice headquarters in Washington, D.C.

By Doina Chiacu and Susan Heavey

WASHINGTON (Reuters) – The U.S. Department of Justice on Wednesday will announce legal action involving an opioid manufacturer, the department said in a statement as officials have sought to stem the decades-long public health crisis involving painkiller addiction.

U.S. officials will “announce the results of the global resolution of criminal and civil investigations with an opioid manufacturer,” at a news conference scheduled for 11 a.m. (1500 GMT), it said.

The department did not identify the company involved.

But U.S. officials have been seeking to negotiate a settlement with Purdue Pharma LP, maker of the addictive pain drug OxyContin, and members of the wealthy Sackler family that own the drugmaker.

Painkiller addiction has claimed the lives of hundreds of thousands of people in the United States since 1999 while communities have sought to grapple with the financial and societal costs of the overdose crisis.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Source link

Continue Reading

Economy

Fed’s Bullard says U.S. can wait on fiscal aid, businesses adapting By Reuters

Published

on

By


© Reuters. FILE PHOTO: St. Louis Fed President James Bullard speaks about the U.S. economy during an interview in New York

(Reuters) – St. Louis Federal Reserve Bank President James Bullard on Wednesday repeated his view that U.S. businesses are largely adapting to life amid COVID-19 and the U.S. economy is on track to better-than-trend growth even without further fiscal stimulus.

“In terms of the aggregate resources it seems like we should have enough” fiscal aid to bolster growth until the first quarter of next year, when any further need could be reassessed, Bullard said at the Federal Home Loan Bank of Des Moines Leadership Summit.

Per-day fatalities per-million population in the coronavirus pandemic are down in the United States from the peak in the spring, he said, adding he does not expect a resurgence, or a second wave, by that metric.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Source link

Continue Reading

Trending

Copyright © 2017 Zox News Theme.