Thurs. PM KTFA News Articles 2-8-18
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Thurs. PM KTFA News Articles 2-8-18

KTFA Samson » February 8th, 2018 RBZ liberalises foreign currency market : Zimbabwe February 8, 2018 BY NDAMU SANDU Reserve Bank of Zimbabwe...

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Samson » February 8th, 2018

RBZ liberalises foreign currency market : Zimbabwe


February 8, 2018 BY NDAMU SANDU

Reserve Bank of Zimbabwe (RBZ) governor John Mangudya yesterday made moves to liberalise the foreign exchange market by announcing a raft of measures designed to buttress the narrative “Zimbabwe is open for business”.

The measures, include among others, enhancement of the nostro stabilisation facilities and ring-fencing of foreign exchange inflows, provision of investment guarantees to lure foreign investors, increasing tobacco and gold facilities, export incentives for horticulture, cotton, gold and macadamia, and establishment of an offshore financial services centre.

They also include the upward review of threshold for exports by individuals, purchasing of gold for value addition and issuance of diaspora tobacco and gold financing bonds.

​Announcing the monetary policy statement, Mangudya said Zimbabwe has to capitalise on renewed confidence brought about by the new administration led by President Emmerson Mnangagwa by going back to basics to restore business confidence and foster discipline within the national economy.

He said the monetary policy statement “seeks to buttress” that by putting in place measures that gradually liberalise the foreign currency market in order to indicate that the country is indeed open for business.

Mangudya said supportive monetary and fiscal measures were essential to walk the talk under the nation-is-open-for-business narrative. He said the narrative calls for a dramatic change from the current “business as usual approach”.

Mangudya said RBZ was enhancing the nostro stabilisation facilities by $400 million, to provide assurances that “international remittances and individual foreign currency inflows received through normal banking channels are available for use when required by the owners.

The enhanced facilities, he said, were designed to meet the foreign exchange requirements for the importation of essential requirements that include fuel, medicines, electricity and cash imports among others. He said the nostro facilities would refine the operations of the Portfolio Investment Fund by ensuring that “all portfolio investment inflows are ring-fenced to meet portfolio investment outflows which shall be processed by giving priority to capital before capital appreciation (profits) and dividends.

“This measure is necessitated to augment the current $5 million that has been provided in the Fund as seed capital and to further provide assurances to investors that Zimbabwe is open for business,” Mangudya said.

The move comes at a time foreign investors on the stock market have been struggling to repatriate dividend proceeds, due to the prevailing foreign currency squeeze.

Mangudya said RBZ was working with the African Export-Import Bank to put in place a $1,5 billion facility earmarked for the provision of guarantees to investment coming into the country and for liquidity support. Of that amount, $1 billion is for investment guarantees and $500 million for liquidity support.

“Such guarantees and liquidity support are necessary to protect investors’ funds from country risk, and in doing so, enhancing investor confidence,” he said.

Mangudya said RBZ would sweat Real Time Gross Settlement System (RTGS) balances by deploying the funds to productive sectors of the economy to enhance exports.

“We need to ensure that we deploy RTGS productively to enhance exports. Last year we deployed $28 million to small sacral tobacco farmers. They will produce 44 million kg of tobacco. We have used $74 million to gold producers and they have increased gold production. We are using money that is lying idle to produce goods for exports,” he said.

Mangudya said in line with the tobacco finance order, deserving tobacco merchants shall be granted authority by RBZ to use RTGS money to purchase tobacco from the auction floors.

The RBZ boss said the foreign currency retention threshold for all services and products except gold, diamonds, platinum, chrome and tobacco remained at 100% of export receipts for exporters’ use in their business operations within an extended period of up to 14 days from the receipt fund. He increased the retention threshold for private-owned diamond firms, platinum and chrome producers to 35% from 20%.

He said the apex bank would issue diaspora tobacco and gold financing bonds to raise funding to increase output in the country’s two of the largest foreign currency earners.
Mangudya said the narrative “open for business” meant that Zimbabwe was prepared to embrace a paradigm shift to attract investors, both local and foreign.

“It calls for a dramatic change in the conduct of business from the business as usual approach,” he said. LINK

Inflation in Egypt at the lowest level since the float of the pound

8th February, 2018

Inflation in Egypt is at the lowest level since the pound float, according to RT Arabic (Russia Today), which conveys the news of inflation in Egypt at the lowest level since the pound floated.

Egypt's annual inflation rate has been the biggest drop since the pound's spending was pegged to 17.1 percent in January, according to a statement by the Egyptian Central Bureau of Statistics.

The central bank's decision to float the national currency on November 3, 2016, followed an unprecedented wave of inflation to 35 percent, leaving the Egyptian currency half of its value.

The decision was aimed at obtaining an IMF loan of $ 12 billion to support and reform the economy.

The IMF said last month its outlook for the Egyptian economy was "positive" after completing its second review of the country's reform program.

He predicted annual inflation would fall to around 12 percent by next June and less than 10 percent by 2019.

In December, the IMF approved a third tranche of $ 2 billion, raising the total amount awarded to Egypt so far to more than $ 6 billion. LINK

Kuwait's Minister of Defense - stressing the importance of developing relations with Iraq: What brings together the two countries is very large

8th February, 2018

Kuwait's Deputy Prime Minister and Defense Minister Sheikh Nasser Sabah Al-Ahmad Al-Sabah on Thursday stressed the importance of developing Kuwaiti-Iraqi relations to the maximum extent possible.

During a meeting with the delegation of the Iraqi Journalists Syndicate which is currently visiting the country, Sheikh Nasser Sabah Al-Ahmad called for strengthening relations between the two countries to become true partners in cooperation and building the future.

He said Kuwait's hosting of the International Conference for the Reconstruction of Iraq confirms the support of His Highness the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah for Iraq and his keenness to strengthen relations between the two countries to return to their natural place.

"There is a geographical, cultural and cultural commitment between the two countries, especially since the meeting is a great deal of awareness and responsibility," Sheikh Nasser said.

He stressed the importance of enhancing joint security and investment cooperation with Iraq to "launch a new breakthrough for the world."

"The decision to develop the northern region of Kuwait in accordance with the vision and strategy of the Silk Road to be an international and international investment zone and in cooperation with Iraq and Iran comes from the common responsibility of all," Sheikh Nasser said. For future generations and the prosperity of their future.

The meeting was attended by Ambassador of the Republic of Iraq to Kuwait Alaa Al Hashemi, Assistant Undersecretary for Foreign Information at the Kuwaiti Ministry of Information Faisal Al-Mutlaqim and Secretary of the Kuwaiti Journalists Association Adnan Al-Rashed and Deputy Editor-in-Chief of the Kuwait Liberation Organization (KUNA).

The delegation of the Journalists Syndicate, which is currently visiting the country, is meeting with a number of government officials and some financial and relief institutions to discuss the issue of the Kuwait International Conference for the Reconstruction of Iraq.

The delegation includes the Iraqi journalists' union, the president of the Union of Arab Journalists Muayad al-Lami, the editor-in-chief of the national news agency Nina Shafiq Turki, the director of Al-Hurra TV channel Falah Halil and the director of Al-Rashid channel Ali Baban.

The delegation also includes the secretary of the Iraqi Journalists Syndicate Saad Khalil, the director of the Iraqi channel Alaa Hattab and the media advisor to the Ministry of Defense Hamed Mahnoub.

The Kuwait International Conference for the Reconstruction of Iraq is scheduled to be held from February 12 to 14, with the participation of a number of donor countries and international and regional organizations, headed by five parties - the European Union, Iraq, Kuwait, the United Nations and the World Bank. LINK

China Foreign Reserves Post New Gains as Yuan Rises

8th February, 2018



China’s foreign-exchange reserves rose for a 12th straight month, as the yuan strengthened and the economic outlook improved.

Bloomberg reported that he world’s largest foreign currency stockpile climbed $21.6 billion to $3.16 trillion in January, the People’s Bank of China said on Wednesday, compared with the $3.17 trillion estimate in a Bloomberg survey, Bloomberg reported.

Reserves have been steadily recovering for a full year since slipping below $3 trillion last January, lifted by a stronger yuan and capital controls that continue to keep money from flowing out. Outflow pressure is also being eased by a solid economy, with growth estimates rising after last year’s acceleration, as well as a weaker dollar.

“A lot of exporters will continue to sell their dollar holdings as the yuan surges, which will lead to a continuous increase in foreign reserves and support the Chinese currency,” said Tommy Xie, an economist at Oversea-Chinese Banking Corp. in Singapore. “The yuan may climb to 6.2 per dollar in the near term, leading to more fund inflows. The authorities may relax capital controls gradually as a result.”

Reserves will remain stable and two-way movement in the currency will become more noticeable, the state administration of foreign exchange said in a statement with the data. The country’s economic fundamentals remain sound, the currency regulator said.

The yuan strengthened 3.51% against the greenback in January to end the month with the strongest reading since August 2015.

“Reserves will steadily increase, but not a huge expansion, amid a stronger yuan outlook,” said Wen Bin, a researcher at China Minsheng Banking Corp. in Beijing. “A weak dollar might have pushed up the value of assets denominated in other currencies, and we need to see the purchase and sale of foreign exchange by companies and households to see whether it’s a contributor or a drag.” LINK
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