Foreign exchange – Erins Rays http://erinsrays.com/ Fri, 24 Sep 2021 08:01:43 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://erinsrays.com/wp-content/uploads/2021/03/cropped-icon-32x32.png Foreign exchange – Erins Rays http://erinsrays.com/ 32 32 Japan leaps, rest of Asia down, on China and virus problems | national news https://erinsrays.com/japan-leaps-rest-of-asia-down-on-china-and-virus-problems-national-news/ Fri, 24 Sep 2021 07:11:16 +0000 https://erinsrays.com/japan-leaps-rest-of-asia-down-on-china-and-virus-problems-national-news/ A forex trader walks past the screen showing the Korea Composite Stock Price Index (KOSPI) at a forex trading room in Seoul, South Korea on Friday, September 24, 2021. Asian stocks were mixed on Friday due concerns over the struggling Chinese real estate developer. Evergrande and on the pandemic. A currency trader gestures near the […]]]>

By YURI KAGEYAMA Business Writer AP

TOKYO (AP) – Japan’s benchmark index rose, but other Asian markets were down on Friday amid concerns over struggling Chinese real estate developer Evergrande and the pandemic.

Some Chinese banks have revealed what they are owed by Evergrande, seeking to allay fears of financial turmoil as it grapples with debt of less than $ 310 billion. Lenders say they can face a potential default. Evergrande’s announcement that she was making a payment due on Thursday appeared to allay some concerns.

On Wall Street, stocks broadly rose for a second straight day, reversing the week’s losses. Investors were happy to have obtained from the Federal Reserve the day before that it was not about to raise interest rates.

Japan’s benchmark Nikkei 225 jumped 2.1% to close at 30,248.81 after it reopened from Thursday’s national holiday. South Korea’s Kospi edged down 0.1% to 3,125.02. The Australian S & P / ASX 200 slipped 0.4% to 7,342.60. The Hong Kong Hang Seng lost 0.2% to 24,463.66, while the Shanghai Composite lost nearly 0.6% to 3,622.10.

Mizuho Bank’s Masayuki Tsunashima warned that there were still risks to the markets due to the potential problems of Evergrande. Protracted coronavirus outbreaks also pose risks, he said.

“So one cannot rule out that optimism remains fragile or, at the very least opportunistic, because the underlying risks have simply not been addressed, let alone put to bed,” he said. “And this is consistent with the fact that markets remain subject to volatility and negative shocks.”


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What to know and how to avoid them – Forbes Advisor https://erinsrays.com/what-to-know-and-how-to-avoid-them-forbes-advisor/ Thu, 23 Sep 2021 13:00:59 +0000 https://erinsrays.com/what-to-know-and-how-to-avoid-them-forbes-advisor/ Editorial Note: Forbes Advisor may earn a commission on sales made from partner links on this page, but this does not affect the opinions or ratings of our editors. Many international travelers face foreign transaction fees when making purchases or withdrawing money from an ATM in a foreign country. The easiest way to avoid overseas […]]]>

Editorial Note: Forbes Advisor may earn a commission on sales made from partner links on this page, but this does not affect the opinions or ratings of our editors.

Many international travelers face foreign transaction fees when making purchases or withdrawing money from an ATM in a foreign country. The easiest way to avoid overseas transaction fees is to use a debit or credit card that waives these fees when traveling overseas. Fortunately, there are many credit and debit card options that offer this benefit to those crossing borders.

What are the foreign transaction fees?

Foreign transaction fees are fees charged by a credit card issuer or bank for each transaction made in a country outside of the United States. The fees vary depending on the terms and conditions of the credit card or bank, but are usually between 1% and 5%. Always check the terms of a card before you assume anything, especially when it comes to fees.

Payment processing networks such as Visa, Discover, Mastercard, and American Express may also charge international fees. Card issuers can choose to exclude these fees from the terms of the card, but otherwise the network fees will be added to the fees charged by the issuer.

Foreign transaction fees usually appear as a separate charge on your billing statement.

Types of transactions subject to fees

Any purchase made at a store, restaurant, or other vendor outside of the United States may be subject to foreign transaction fees. Many establishments frequented by tourists offer the option of being billed in the currency of your country. Beware of this option, as currency conversion rates are almost always worse than what you would get if you had just processed the fees in the local currency. Even purchases denominated in your national currency, but made abroad, may be subject to foreign transaction fees. A good rule of thumb is to charge the card in the local currency to avoid conversion fees, and to choose a card that does not charge a foreign transaction fee for all purchases made abroad.

Cash withdrawals from international ATMs are also subject to fees. In addition to the ATM transaction fee, a conversion fee may also be added by the ATM operator. These currency conversion fees are more likely to be encountered if a cardholder withdraws US dollars from an international ATM.

Online shopping on an international shopping website may also incur foreign transaction fees, especially if the payment processor is a bank or an international institution. This includes purchasing airline tickets from an international airline, even if the transaction is made in US dollars.

How to Avoid Foreign Transaction Fees

Fortunately, there are several options for avoiding overseas transaction fees. Many banks offer credit cards with no overseas transaction fees, and a number of institutions offer checking accounts that do not charge overseas transaction fees for overseas cash withdrawals. New debit or credit card applications can sometimes take up to a week to be approved and waiting for a new card to be delivered in the mail can take up to two weeks, so you should consider these options well in advance of your business. next big trip.

Get a credit card with no foreign transaction fees

Many credit cards offer cardholders the option of swiping without incurring foreign transaction fees. These cards present the easiest and most secure strategy for making purchases abroad.

Credit cards with no overseas transaction fees are useful both abroad and at home when shopping online from an international website. Many cards even offer rewards that can be used for future trips or help cover the cost of daily purchases.

Perhaps the biggest advantage of using a credit card with no overseas transaction fees while traveling is that, even if credit card information is copied or stolen, it’s relatively easy to report. fraud and quickly recover stolen funds from a credit card issuer.

One of the most popular travel rewards cards is the Chase Sapphire Preferred® Card. Sapphire Preferred does not charge any overseas transaction fees and offers the following rewards: earn 5 points per dollar on travel purchased through Chase Ultimate Rewards®, 3 points per dollar on meals, and 2 points per dollar on all other travel purchases and one point per dollar on all other eligible purchases. Plus, until March 2022, you’ll earn a total of 5 points per dollar on Lyft rides. Points can be redeemed for flights, restaurants, hotels and more.

Get a checking account or debit card with no foreign transaction fees

Combining an international no-fee debit card with a similar credit card makes a great wallet for a frequent traveler. Even on its own, a debit card that doesn’t charge an overseas transaction fee is useful for making daily purchases and withdrawing money from ATMs.

A popular option for travelers is Charles Schwab’s High Yield Investor Checking Account. Schwab debit cardholders have no overseas transaction fees and receive rebates on ATM fees at the end of each month.

While using a debit card can be convenient, debit cards offer less protection against fraud than credit cards. If the debit card information is stolen, it may take much longer to receive the stolen funds from the issuing bank and some account holders may have their luck run out completely. For those traveling on a budget or who have limited available capital, this can present significant dangers abroad. Always report fraud immediately and follow any steps the bank may require to receive the funds as quickly as possible.

Do not use international ATMs without first checking the charges

Regardless of the type of credit or debit card on hand, travelers should check the charges before using an international ATM. The fees to be considered include the fees of the international ATM, the fees for currency conversion and the fees of the originating bank. These fees can be avoided by choosing a bank account that does not charge fees and reimburses fees for off-grid ATMs and always withdrawing local currency from ATMs. Account holders can also ask their home bank if there are any partner branches or networked ATMs in the destination country (s).

Travelers who don’t have a fee-reimbursing account may want to consider making fewer trips to the ATM and withdrawing more money each time to minimize fees. Of course, carrying more cash also comes with risk.
Exchange money before leaving the United States

One way to avoid ATM or transaction fees is to pay for travel in cash. Travelers can exchange US dollars for most major currencies at a bank, credit union, or bureau de change before a big trip. This can be a good idea if it is easy to budget how much will be spent on meals or souvenir shopping. Banks and credit unions generally have the lowest exchange rates or fees compared to exchanging money at an airport on arrival. We recommend that you exchange currency as far away from an airport as possible.

Be aware of the risk of carrying a large amount of cash on a trip. There is a greater chance of losing the money or having it stolen. Be extremely careful when choosing this option and make sure you have a backup option, such as a backup credit card, so that you don’t find yourself without a way to purchase food or transport tickets.

Final result

Foreign transaction fees can be safely avoided with the right credit or debit card in your wallet. Apply for a credit card or checking account that offers no transaction fees and / or discounts at an ATM well in advance of your trip to ensure there is sufficient time to receive credit card approval or account and get a new credit or debit card in the mail.

If applying for a no-charge card isn’t an option, consider exchanging enough money for travel at a bank or credit union before you leave the United States. However, this strategy can be risky, so be sure to think about the best way to protect yourself and your money when traveling abroad.

As long as a plan is in place well in advance, any traveler can avoid transaction fees abroad.


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Treasury takes strong action to tackle ransomware – MeriTalk https://erinsrays.com/treasury-takes-strong-action-to-tackle-ransomware-meritalk/ Wed, 22 Sep 2021 18:11:15 +0000 https://erinsrays.com/treasury-takes-strong-action-to-tackle-ransomware-meritalk/ As part of a government-wide effort to combat ransomware, the US Treasury Department is taking strong action to disrupt the criminal networks and virtual currency exchanges responsible for ransom laundering, encouraging best practices in cybersecurity issues and increase the efficient and timely reporting of incidents to agencies. “Ransomware and cyber attacks victimize businesses large and […]]]>

As part of a government-wide effort to combat ransomware, the US Treasury Department is taking strong action to disrupt the criminal networks and virtual currency exchanges responsible for ransom laundering, encouraging best practices in cybersecurity issues and increase the efficient and timely reporting of incidents to agencies.

“Ransomware and cyber attacks victimize businesses large and small across America and pose a direct threat to our economy. We will continue to crack down on malicious actors, ”Treasury Secretary Janet L. Yellen said in a press release on September 21. sanctions and regulatory tools, to disrupt, deter and prevent ransomware attacks.

Among the actions undertaken is the designation of the first virtual bureau de change for complicit financial services. The Treasury Department’s Office of Foreign Assets Control (OFAC) prohibits use or engagement with SUEX, a virtual bureau de change, due to its involvement in facilitating financial transactions for ransomware players.

“SUEX has facilitated transactions involving illicit products of at least eight ransomware variants,” the Treasury Department said. “Analysis of known SUEX transactions shows that over 40% of the history of known SUEX transactions is associated with illicit actors. “

Virtual currency exchanges are critical to the profitability of ransomware attacks, which help fund additional cybercrime activities. The Treasury Department plans to continue to disrupt and hold these entities accountable to reduce the incentive for cybercriminals to continue carrying out these attacks.

This action is the first designation of sanctions against a virtual currency exchange and was carried out with the help of the FBI.

In addition, the Treasury Department said any financial institution or person engaged in activities with sanctioned entities and individuals could face sanctions or be subject to enforcement action.

OFAC has also issued an updated advisory on potential sanction risks to facilitate ransomware payments, highlighting how the US government continues to discourage payment of cyber, ransom or extortion demands and recognizes the importance of cyber -hygiene to prevent or mitigate such attacks.

The updates highlight the importance of improving cybersecurity practices and reporting a ransomware attack to the appropriate government agencies. Proper and timely reporting is essential for government agencies, including law enforcement, to understand and counter ransomware attacks and malicious cyber actors.

Overall, the actions of the Treasury Department advance the broader US government’s anti-ransomware strategy, which emphasizes the need for a collaborative approach to counter ransomware attacks, including a partnership. between the public and private sectors and close relationships with international partners.


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Dispatches in Afghanistan: “no bank has enough money to serve its customers at the moment” – JURIST – News https://erinsrays.com/dispatches-in-afghanistan-no-bank-has-enough-money-to-serve-its-customers-at-the-moment-jurist-news/ Tue, 21 Sep 2021 21:19:35 +0000 https://erinsrays.com/dispatches-in-afghanistan-no-bank-has-enough-money-to-serve-its-customers-at-the-moment-jurist-news/ EXCLUSIVE JURIST – Law students and lawyers in Afghanistan file reports with JURIST on the situation there after the fall of Kabul to the Taliban. Here, a lawyer from Kabul offers his observations and perspective on the new regime’s new internal security measures and current problems with the functioning of Afghan banks. For reasons of […]]]>

EXCLUSIVE JURIST – Law students and lawyers in Afghanistan file reports with JURIST on the situation there after the fall of Kabul to the Taliban. Here, a lawyer from Kabul offers his observations and perspective on the new regime’s new internal security measures and current problems with the functioning of Afghan banks. For reasons of confidentiality and security, we retain the name and institutional affiliation of our correspondent. The text has only been slightly retouched to respect the author’s voice.

Security concerns

Taliban have asked security agencies to prepare list of former government employees, people and entities affiliated with ISIS, and people trying to establish armed forces inside the country, sources say local information.

This instruction was given to agencies such as the Interior Ministry, the Defense Ministry, National Security Departments, and Security Governors or Commanders throughout Afghanistan. They have indicated that this should be for security purposes only, but our concerns with former government employees are that they are trying to identify former government officials. It could also mean that they will try to identify people who opposed them, especially military officers.

They have already frozen the bank accounts and assets of former government officials. However, they have yet to do anything specifically against the old military forces.

Meanwhile, the Taliban have faced major security challenges in Kabul, Kandahar and Nangarhar in recent days. In particular, the attacks in Kabul and Nangarhar were directed against Taliban forces and at least four Taliban were killed. The Taliban confirmed the attacks and said ISIS was behind the attacks.

ISIS has some power in Nangarhar and some neighboring provinces. I think they can pose a major challenge for the Taliban government if no action is taken against them. So far, we don’t see any security plans from the Taliban government except for major appointments to top security posts.

Economy and Banking

I have an account at a bank and went to withdraw money today – we are still not allowed to withdraw more than $ 200 per week. I know the person in charge of the banking operations of this bank. I spent time talking to him about banking and financial status – according to him no bank has enough money to serve its customers right now. Previously, the central bank provided them with AFNs as well as US dollars two or once a week, but now he said they rarely receive cash from the central bank.

According to him, this week they only received $ 50,000 from the central bank, which is not enough for their clients. This means that the central bank is almost out of USD liquidity and soon some banks will stop their USD services. From what I understand, this also means that soon some banks will have to close their doors to their customers.

Cash in USD was provided to commercial banks, currency brokers and money service providers through an online auction process. There is no auction these days due to the unavailability of liquidity at the central bank. Participants in these auctions typically received between $ 5 million and $ 10 million. In addition, he told me that most banks, including theirs, sometimes use their reserves to serve customers.

In banking and finance, the former government has taken steps to gain public confidence in the banking sector which is damaged these days. There are no new customers in the banks, and the people who line up behind the banks are only there to withdraw money. Therefore, withdrawing cash is the only thing banks are currently busy with in the country.

I think some small banks like Maiwand Bank, Afghan United Bank, Ghazanfar Bank and others are going to go bankrupt soon. This is due to the fact:

  • These banks are first all in CAMEL Rating 5, which is the worst status for a bank and they were already insolvent in some areas. This is the result of the lack of an adequate correction plan by the banks, the intervention of shareholders, the increase in bad debts of these banks and the lack of implementation of coercive measures by the central bank. .
  • The capital adequacy of these banks was always in question and the central bank used to fight them to improve it. However, they were unsuccessful for several years. These banks did not comply with asset quality requirements, management performance conditions, remuneration principles and liquidity requirements set out by the central bank.
  • Despite the above, all these banks wanted to offer loans to MSMEs, housing loans, establish new branches and at the same time try to obtain permits to use their reserves.

None of the above issues were resolved before the fall of Kabul and I’m sure there was no progress until the fall of Afghanistan under the Taliban rule.

The above challenges as well as the economic collapse of the country will definitely shut the doors of these banks in the near future if the central bank does not take any action to help them, and I doubt they will while all assets are left. frozen.

Therefore, I think we will see these banks become insolvent in the next three to four months. This would result in the loss of many assets and holdings of the population in these banks. The central bank will also take a long time to pay customers when they are genuinely insolvent.


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Pakistan Exchange Rates – Dollar, Euro, Pound and Riyal rates for September 21, 2021 https://erinsrays.com/pakistan-exchange-rates-dollar-euro-pound-and-riyal-rates-for-september-21-2021/ Tue, 21 Sep 2021 04:25:01 +0000 https://erinsrays.com/pakistan-exchange-rates-dollar-euro-pound-and-riyal-rates-for-september-21-2021/ Sumaira FH 3 hours ago Tue September 21, 2021 | 09:25 Current exchange rates in Pakistan on September 21, 2021, Current dollar rate in Pakistan, Latest exchange rates for British Pound, Euro, Saudi Riyal, United Arab Emirates dirham, Canadian dollar, Australian dollar in Pakistani rupees. All rates updated according to open market exchange rates. Current […]]]>

Sumaira FH


Current exchange rates in Pakistan on September 21, 2021, Current dollar rate in Pakistan, Latest exchange rates for British Pound, Euro, Saudi Riyal, United Arab Emirates dirham, Canadian dollar, Australian dollar in Pakistani rupees. All rates updated according to open market exchange rates.

Current exchange rate in Pakistan according to international currencies as of September 21, 2021. The latest prices of USD to PKR, EUR to PKR, GBP to PKR, AUD to PKR are shown on this page. These currency prices are provided by free market brokers, and the exchange rates in Pakistan are updated four times a day to keep them up to date and relevant to users.

Cash Purchase Sale
Australian dollar (AUD) 120.50 PKR 122.50 PKR
Bahraini Dinar (BHD) 386.60 PKR 388.36 PKR
Pound sterling (GBP) PKR 232.50 PKR 235.50
Canadian dollar (CAD) 133.50 PKR 135.50 PKR
Chinese Yuan (CNY) 23.70 PKR 23.85 PKR
Danish Krone (DKK) 23.40 PKR 23.70 PKR
Euro (EUR) 197.50 PKR 199.50 PKR
Hong Kong Dollar (HKD) 16.60 PKR 16.85 PKR
Indian Rupee (INR) 2.03 PKR 2.10 PKR
Japanese Yen (JPY) 1.41 PKR 1.44 PKR
Kuwaiti Dinar (KWD) 481.50 PKR 484.00 PKR
Malaysian Ringgit (MYR) 36.40 PKR 36.75 PKR
New Zealand dollar (NZD) 96.25 PKR 96.95 PKR
Norwegian Krone (NOK) 17.45 PKR 17.70 PKR
Omani Riyal (OMR) 392.50 PKR 394.50 PKR
Qatari Riyal (QAR) 39.70 PKR 40.30 PKR
Saudi Riyal (SAR) 44.65 PKR 45.30 PKR
Singapore Dollar (SGD) 122.75 PKR 124.00 PKR
Swedish krona (SEK) 18.10 PKR 18.35 PKR
Swiss Franc (CHF) 159.60 PKR 160.50 PKR
Thai Bhat (THB) 4.80 PKR 4.90 PKR
US dollar (USD) 169.00 PKR 170.00 PKR
United Arab Emirates Dirham (AED) 46.00 PKR 46.50 PKR

Rates are provided by the local Forex market and local exchanges in Karachi, Lahore, Rawalpindi, Peshawar, Quetta, Faisalabad, Multan, Gujranwala, Sialkot and Islamabad.

Exchange rates are updated on this page four times a day, so you need more up-to-date Pakistan exchange rates than visit our company section.

You can also view Current Pakistan Gold Rates, Free Market Exchange Rates, Interbank Exchange Rates, and Forex Exchange Rates


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US Authorizes New Sanctions Against Ethiopia, Updates ITAR Licensing Policy in Response to Human Rights Violations | Kelley Drye & Warren LLP https://erinsrays.com/us-authorizes-new-sanctions-against-ethiopia-updates-itar-licensing-policy-in-response-to-human-rights-violations-kelley-drye-warren-llp/ Mon, 20 Sep 2021 17:04:18 +0000 https://erinsrays.com/us-authorizes-new-sanctions-against-ethiopia-updates-itar-licensing-policy-in-response-to-human-rights-violations-kelley-drye-warren-llp/ Last week, the Biden administration issued a new executive decree (“EO”) which authorizes “menu-based” sanctions against those found responsible or complicit in the current crisis in northern Ethiopia. , and announced a policy of denying export licenses. military equipment to Ethiopia. Both actions aim to put an end to the escalation of conflict and humanitarian […]]]>

Last week, the Biden administration issued a new executive decree (“EO”) which authorizes “menu-based” sanctions against those found responsible or complicit in the current crisis in northern Ethiopia. , and announced a policy of denying export licenses. military equipment to Ethiopia. Both actions aim to put an end to the escalation of conflict and humanitarian crisis in northern Ethiopia.

In particular, under the new EO on sanctions, the Office of Foreign Assets Control (“OFAC”) can choose from a “menu” of options to sanction parties associated with the conflict in Ethiopia. The “menu” options include both blocking and non-blocking sanctions:

  • Blocking of sanctions on all the property and interests of this sanctioned person (and inclusion on the SDN list of OFAC);
  • A prohibition on United States persons from investing or buying large amounts of shares or debt of the sanctioned person;
  • A ban on US financial institutions from granting loans or granting credits to the sanctioned person;
  • A ban on foreign exchange transactions subject to United States jurisdiction in which the sanctioned person has an interest; and
  • Imposition of sanctions on officers, officials, officers and directors of the above parties.

In particular, blocking and non-blocking sanctions do not apply to entities owned in whole or in part by persons sanctioned under the new EO, unless this entity is designated separately. This is an important exception to OFAC’s 50 percent rule.

OFAC has also issued three general licenses authorizing U.S. nationals to engage in otherwise prohibited transactions and activities that are (1) related to the official activities of certain international organizations, (2) ordinarily incidental and necessary in support of the activities humanitarian aid organizations, and (3) related to the export or re-export of agricultural products, drugs and medical devices. Non-U.S. Persons do not face penalties for engaging in transactions and activities that would be exempt or permitted for U.S. persons under general licenses.

Separately, the Defense Trade Controls Directorate (“DDTC”) will issue an amendment to the International Traffic in Arms Regulations (“ITAR”) that adds Ethiopia to the list of countries for which the agency imposes a presumption. refusal for export licenses for defense articles and services. This policy will effectively cut off the flow of US-origin defense items and services to Ethiopia.

Companies operating or doing business in Ethiopia should carefully consider the new EO and the potential exposure to any upcoming sanctions, as well as the upcoming Federal Register notice updating the ITAR.

[View source.]


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CBN, forex scams and economics https://erinsrays.com/cbn-forex-scams-and-economics/ Sun, 19 Sep 2021 23:18:18 +0000 https://erinsrays.com/cbn-forex-scams-and-economics/ Posted September 20, 2021 The naira’s continued downward spiral over the weekend, when it traded at 570 naira against the US dollar, rocked government and corporate recovery efforts and raised the specter of an economic collapse. Defying all efforts of the Central Bank of Nigeria to calm the turbulent foreign exchange market and protect the […]]]>

The naira’s continued downward spiral over the weekend, when it traded at 570 naira against the US dollar, rocked government and corporate recovery efforts and raised the specter of an economic collapse. Defying all efforts of the Central Bank of Nigeria to calm the turbulent foreign exchange market and protect the national currency, structural deficiencies, manipulation, panic buying, hoarding and reduced inflows pushed the naira out of nearly 600 naira to $ 1 and over 750 naira to the pound on the parallel market last week. With the economy’s soft underbelly also exposed and faltering in an increasingly fragile regime, President, Major General Muhammadu Buhari (retired) and CBN Governor Godwin Emefiele are expected to take action. timely and difficult decisions to stop the dangerous slide.

Investopedia claims that “a currency crisis is caused by a sharp drop in the value of a country’s currency. This decline in value, in turn, negatively affects an economy by creating instabilities in exchange rates, which means that a unit of a certain currency no longer buys as much as before in another currency. Ask Zimbabwe where the inflation rate crossed the shocking 100,000 percent mark and where the country issued a 10 million dollar bill. The reality that a collapsed currency will trigger hyperinflation, mass hunger and general economic collapse and perhaps unrest is too grim to consider. Currently ranked 12th most fragile states in the world, a violent implosion is a terrifyingly real possibility if the currency crisis continues.

Already, the corporate sector has been hit hard. The already high costs are rising again and again. Supply chains for imported inputs, machinery and spare parts are under threat and further production cuts could push the unemployment rate up beyond the current 33.3%. Inflation has soared to over 20 percent due to rising food prices. This is likely to worsen when the decline of the naira inevitably impacts the prices of petroleum products, as the country depends on imported fuel to meet domestic demand.

Clearly, the economy is structurally deficient. Being dependent on imports, dependent on a single product for most of the foreign exchange earnings, it has a weak industrial base and a centralizing administrative system that stifles productivity. An analysis from Proshare, a Lagos-based financial information provider, said that while the COVID-19 collapse contributed to the 30% loss in the value of the naira in 2020, current structural and policy gaps must be corrected to secure a currency in the long run. stability. But that cannot be the whole story. More importantly, the currency crisis is compounded by corruption, manipulation and impunity. Money deposit Banks, money changers, CBN insiders and the influential elite engage in back-and-forth, corrupt allocation and brazen money laundering. There are clear signs that the currency tumble is not a reflection of economic realities, but a manifestation of the forces of evil at work.

The Forex scams that offer unscrupulous traders the lure of making a fortune in a limited time are partly to blame.

To date, with the USD trading at N562 on the black market and around N460 in banks, a margin of over N100 is very attractive bait for the evil forces to play with. Simply put, diverting $ 1 million at the official rate to the black market will bring in over $ 200,000, or over N100 million in arbitrage profit.

The critical question is: who is manipulating the market? CBN Insider Abuse? Or a breach of trust on the part of the commercial banks that a former vice-governor of the CBN, Obadiah Mailafia, said: “Receive the dollars and only release what is left after satisfying their interests?” Or maybe the BDC traders Emefiele accused of making “abnormal profit from forex sales”? For another former vice-governor of the CBN, Kingsley Moghalu, high government debt, attacks on traders, among other known factors, are the culprits. Indeed, the truth lies in this forex circle. With the weak regulation of CBN, manipulation is systemic. Both the Buhari regime and the Emefiele-led CBN are to blame for the struggling currency. While Buhari’s state approach to economic management has stifled economic diversification, Emefiele’s CBN is weak and toothless. The Buhari regime does not have significant input from competent economists. Disastrously, he has failed to demonstrate the strong political will required to root out corruption beyond words or take matters into their own hands as things head south.

The CBN has lost the clarity of its mandate and compromised its independence. Under both, the naira was severely beaten in their custody. In June 2015, shortly after Buhari became president, the naira officially traded at N197 for $ 1, adjusted to N306 by 2017, N381 by 2020 and N410.47 last week. Even before last week’s plunge, a report released in August ranked the naira 24th of Africa’s 25 weakest national currencies.

The actions of the central bank appear to favor the elites. A series of CBN measures have failed to prevent the decline of the naira. Since he recently ended the anomaly of direct dollar allocations to BDCs, the strict rules given to DMBs to ensure supply and price stability have not been effectively enforced. BDC operators too, bitter about the easy loss of money, may also have found another way to make money thanks to the weakness of the system.

On Friday, Emefiele announced the shutdown of a popular AbokiFX website, accusing it of exploiting “a forex market window next to the investor and exporters window.” AbokiFX categorically denied this, insisting that the website “does not trade forex”.

Really, strong monetary policies must be accompanied by firm fiscal measures and government enforcement of the law. But beyond the warning, the CBN should partner with anti-corruption agencies to clean up its house, punish bankers and BDC operators committing financial crimes. Such a partnership worked under Lamido Sanusi as governor during the banking sector crisis of 2009/10. There is an urgent need to export non-oil value-added products to increase and diversify sources of foreign exchange.

The consequences of losing control of the currency are serious. Hyperinflation could accelerate state bankruptcy or facilitate the rise of a brutal dictatorship. Following a currency crash and hyperinflation, Zimbabwe stopped printing its currency in 2009, adopting a basket of foreign currencies, primarily the US dollar, British pound, South African rand and yuan. Chinese; El Salvador and Ecuador adopted the US dollar after their currencies became worthless.

The CBN led by Emefiele should stop playing political roles and the demagoguery that goes with it. As stated by iBanFirst, a Brussels-based technology and financial services company, “Central banks usually intervene to prevent large and rapid changes in the value of their currencies. This ensures that these are not undervalued or overvalued for a long time.

Currency traders holding the economy by the jugular vein should be treated as national saboteurs. The CBN should weigh the IMF and PAHO’s demand for the removal of several fixed rates and the pressing need to prevent a free fall. Economists say the key is to stop abuse by banks and BDCs to prevent illicit arbitrage and account for all the currencies they receive.

Besides upgrading ICT tools to closely monitor DMBs, CBN is expected to enforce full digitization of BDC operations. Businesses sending money overseas should be subject to further scrutiny: CBN said companies had spent $ 55 billion to pay expatriates for “professional and technical services” in the previous 10 years 2021. Massive accumulation, corruption by the political and business elite and illicit transfers amounting to more than $ 15 billion per year must be stopped.

Buhari should go into emergency mode, mobilize law enforcement, PAHO and all other stakeholders to reform macroeconomic policies. He should bring economists and the business community on board his government which has disastrously relegated expertise to the background. Just as it is under attack by terrorists, killer shepherds and bandits, the country should realize that it is also waging an economic war of survival.

Time demands a very strong central bank. The forex circle of evil should be exposed and punished. The dubious condition where the same currency trades at very different prices in the official and black markets should be removed. But if the slide continues, the National Assembly should review Emefiele’s performance following the law. Just as failing commanders are replaced in wartime, Buhari should also seek competent replacements for heads of critical ministries and agencies in charge of the economy.

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Capital Markets: India vs. Global Perspective https://erinsrays.com/capital-markets-india-vs-global-perspective/ Sun, 19 Sep 2021 16:10:11 +0000 https://erinsrays.com/capital-markets-india-vs-global-perspective/ India has seen an increase in capital market transactions, mainly initial public offerings (IPOs). However, are our capital market regulations aligned with international regulations? India is making rapid changes to introduce global best practices and regulations. Until 2020, the Indian legal framework facilitated the listing of Indian companies’ securities on international stock exchanges only through […]]]>

India has seen an increase in capital market transactions, mainly initial public offerings (IPOs). However, are our capital market regulations aligned with international regulations? India is making rapid changes to introduce global best practices and regulations.

Until 2020, the Indian legal framework facilitated the listing of Indian companies’ securities on international stock exchanges only through certificates of deposit. Debt securities could be listed on international stock exchanges in the form of “Masala bonds”. With the new Companies (Amendment) Bill of 2020, it is now possible to directly list shares of Indian companies on foreign stock exchanges. However, related provisions including business eligibility, authorized jurisdiction, tax structure, etc. have yet to be notified. RBI, SEBI, MCA and CBDT must coordinate to make the necessary changes to existing regulations in order to transparently allow direct listing on foreign stock exchanges.

Positive relationship

There is a strong positive relationship between the development of the capital market and economic growth. The health and competence of an economy is fueled by well-developed and easy-going capital market policies. The overseas listing is expected to provide better valuation, an increased investor base and competitiveness for domestic companies, and therefore will have a huge impact on the Indian economy.

The amendments to the Companies Act also suggest granting companies listed on their securities on foreign stock exchanges an exemption from the requirements under India’s listing regulations. This means that unlisted Indian companies can list their securities on foreign stock exchanges without the need to register in India. In August, SEBI resolved numerous changes in the regulatory framework of our capital market. Of these, the most notable change included a reduction in the minimum downtime that must be observed by a promoter following an IPO from 3 years to 18 months and approval to move the concept. from ‘promoter’ to that of ‘controlling person’.

This is in line with international practice as the concept of promoter is unique to India; most of the world’s financial market regulators do not have a promoter system, but rather focus on supervision. Another topic of discussion concerns the Special Purpose Acquisition Company, to facilitate the listing of start-ups, which are generally not able to meet the profitability criteria of a traditional public listing through an IPO.

The SPAC IPO route is an alternative platform to a traditional IPO in the US market. The concept of PSPC has been borrowed from other countries and is still in its infancy here. After gaining popularity in the United States, the PSPC frenzy gained ground in Asia. Given the size and maturity of the IPO market in Asia, regulators are now considering allowing SPAC listing in various Asian countries. As the Indian market has shown openness to new ideas and new products, PSPCs may well be there. However, Indian regulators must introduce separate regulations for IPOs of PSPC, as PSPCs currently cannot meet rigid eligibility standards and other regulatory requirements in India. In early 2021, SEBI relaxed the eligibility and listing criteria on the so-called Innovators Growth Platform (IGP), a separate place of exchange for new-age start-ups. However, around the world, regulations for mainboard entry, especially for start-ups, are easier than in India.

(The author is a partner, BDO India, a global tax, accounting and consulting firm)


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Factum Perspective: Why are foreign exchange reserves important to an economy? https://erinsrays.com/factum-perspective-why-are-foreign-exchange-reserves-important-to-an-economy/ Sat, 18 Sep 2021 18:07:01 +0000 https://erinsrays.com/factum-perspective-why-are-foreign-exchange-reserves-important-to-an-economy/ Why are foreign exchange reserves important for an economy? By Dr RHS Samaratunga Sri Lanka’s foreign exchange reserves (Forex) talks have been in the headlines in recent months. What are foreign exchange reserves and how does a country benefit from maintaining good foreign exchange reserves? Foreign exchange reserves are foreign currency deposits held by the […]]]>

Why are foreign exchange reserves important for an economy?

By Dr RHS Samaratunga

Sri Lanka’s foreign exchange reserves (Forex) talks have been in the headlines in recent months. What are foreign exchange reserves and how does a country benefit from maintaining good foreign exchange reserves?

Foreign exchange reserves are foreign currency deposits held by the country’s central banks and / or monetary authorities. It also includes gold reserves, special drawing rights (SDRs) and the reserve position (quota) of the International Monetary Fund (IMF). They are more precisely called official reserves or international reserves or official international reserves. Forex are assets denominated in a foreign currency, primarily US dollars, the most traded currency in the world. The British pound sterling, the euro, the yen and the yuan are also used to build up foreign exchange reserves.

The IMF recognizes eight major reserve currencies: the Australian dollar, the British pound, the Canadian dollar, the Chinese renminbi (the yuan is its main unit), the euro, the Japanese yen, the Swiss franc and the US dollar. The US dollar has been the most sought-after reserve currency for almost a century. However, the currency composition of the world’s foreign exchange reserves has undergone considerable changes in recent decades. At the end of 1999, about 71 percent of the world’s foreign exchange reserves were held in US dollars. That figure fell to around 59% by the end of 2020 (Arslanalp and Simpson-Bell, 2021). The euro captured around 20%, becoming the second largest foreign exchange reserve currency in the world after its introduction in 1999. Global foreign exchange reserves accumulated during the year affected by Covid-19 (Q1 2020-Q1 2021 ) have also increased (Table 1). The same was observed in foreign exchange reserves by currency (Table 2) where Asian countries dominated the 10 largest foreign exchange reserves in the world.

China is home to the world’s largest foreign exchange reserve, recording nearly 27% of cumulative foreign exchange reserves. Japan holds 11% in second place followed by Switzerland, the only European country to appear on the list. India in recent years has overtaken Russia to become the fourth largest foreign exchange reserve.

Following the global financial crisis of 2008, most countries focused on risk averse economies and thus built up large foreign exchange reserves. Foreign exchange reserves are used not only to cover liabilities, but also to influence monetary policy. Foreign exchange reserves are necessary to maintain support and confidence for central bank actions, whether they are actions related to monetary policy or any exchange rate intervention made in favor of the national currency. . It also helps reduce any vulnerabilities created by sudden disruptions in foreign capital flows, which could arise in the event of a crisis. A readily available stock of liquid currency provides protection against such effects acting as a critical external liquidity buffer and provides assurance that there will always be sufficient foreign exchange resources to assist the country with crucial imports in the event of shocks. external. Thus, countries hold foreign exchange reserves for several reasons:

(a) To cope with economic shocks,

(b) To pay for imports

(c) In the service of debts, and

(d) To moderate the value of one’s own currency

The academic discussion on aspects relating to the adequacy of foreign exchange reserves versus bonds is also inconclusive. Maintaining foreign exchange reserves is a costly business, but they are important in preventing or coping with crises and useful in mitigating the impact of crises on the national economy. Traditionally, the adequacy of foreign exchange reserves has been deemed satisfactory if they can meet the country’s three-month import requirements or / and can meet short-term debt obligations. Regardless of this preparation, the various dimensions to be taken into account by a country in deciding the degree of adequacy of foreign exchange reserves are a complex issue.

There are large differences in foreign exchange reserves between different regions of the world. As shown in Table 3, South Asia currently holds around 6 percent (2021) of total global foreign exchange reserves.

South Asia has seen its foreign exchange reserve position improve during the pandemic, but disparities between countries in the bloc are visible. India and Bangladesh were able to significantly improve their foreign exchange reserve position. Nepal and Pakistan were able to stabilize its position during the pandemic.

Sri Lanka’s foreign exchange reserve levels declined over the reporting period, mainly because foreign currency inflows from the tourism industry, a major source of counterfeit income, fell to negligible amounts after the first quarter of 2020. As a result, outflows, especially due to external debt repayments, had to be covered largely by existing foreign exchange reserves. In addition, the increased amount of health-related import spending may also have led to the deterioration of the country’s foreign exchange reserves amid a slowdown in foreign remittances in recent months.

The approach of successive Sri Lankan governments and the policy to establish or maintain stability in the management of foreign exchange reserves following the 2008 global financial crisis remain unchanged. Yet, against the backdrop of compulsions caused primarily by Covid-19, the work of the past few years towards this task has been difficult.

(The writer is the former Treasury Secretary, a retired career public servant who served as Secretary of the Oil Ministry and Director of the Bank of Ceylon..)

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Disclaimer – Factum is a Sri Lanka-based think tank providing international relations analysis and public diplomacy advice in Sri Lanka and Asia. Visit – www.Fatum.LK
The references
Arslanalp, Serkan and Simpson-Bell, Chima (2021) ‘US Dollar Share of Global Foreign Exchange Reserves Drops to 25-Year Low’, IMF Blog, MAY 5, 2021.
Siripurapu, Anshu (2020) ‘The Dollar: The World’s Currency’, September 29, 2020, Council on Foreign Relations, http://www.cfr.org/bio/anshu-siripurapu (accessed September 4, 2021).
IMF: https://data.imf.org/?sk=E6A5F467-C14B-4AA8-9F6D-5A09EC4E62A4 (accessed September 16, 2021)



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China Injects $ 14 Billion in Market Liquidity Amid Evergrande Crisis | Business and Economy News https://erinsrays.com/china-injects-14-billion-in-market-liquidity-amid-evergrande-crisis-business-and-economy-news/ Fri, 17 Sep 2021 20:49:40 +0000 https://erinsrays.com/china-injects-14-billion-in-market-liquidity-amid-evergrande-crisis-business-and-economy-news/ The move comes as the problems facing the Chinese group Evergrande fuel investor concerns about the health of the real estate and credit markets. China has injected more liquidity into its banking system in a sign that authorities seek to avoid a funding crunch amid a seasonal increase in demand for financing and the intensifying […]]]>

The move comes as the problems facing the Chinese group Evergrande fuel investor concerns about the health of the real estate and credit markets.

China has injected more liquidity into its banking system in a sign that authorities seek to avoid a funding crunch amid a seasonal increase in demand for financing and the intensifying debt crisis in China Evergrande .

The People’s Bank of China on Friday added 90 billion yuan ($ 14 billion) of funds on a net basis under seven-day and 14-day repurchase agreements, the highest number since February. Today was the first time this month that it added more than 10 billion yuan of short-term liquidity to the banking system in a single day.

The move comes as issues facing China Evergrande Group fuel investor concerns about the health of the real estate and credit markets. Added to this stress is a seasonal spike in demand for liquidity, with banks reluctant to lend towards the end of the quarter before regulatory checks. Liquidity also tends to decrease at this time of year before a week’s vacation in early October.

“Avoiding a systemic liquidity crunch is the top priority for the PBOC and it has the means to do so,” wrote economists at Societe Generale SA led by Wei Yao in a research note. “A Lehman-style financial market meltdown is not our main concern, but a prolonged and severe economic downturn seems more likely.”

Yet the PBOC’s operations have yet to lower money market rates. The seven-day repo rate, an indicator of interbank borrowing costs, jumped 14 basis points on Friday to 2.4%, its highest since June 30.

The concern over Evergrande comes at a time when the Chinese economy is already slowing. Strict movement controls put in place to curb the Covid-19 outbreaks have hurt retail spending and travel, while measures to cool house prices have also taken their toll. On Wednesday, the country reported a sharper-than-expected slowdown in retail sales in August, along with weaker growth in industrial production and capital investment.

The PBOC seeks to strike a balance between stimulating the economy and ensuring that its liquidity injections do not lead to asset bubbles. Since July, it has refrained from adding additional medium-term liquidity as the policy loans mature.

On Friday, the central bank injected 50 billion yuan through its seven-day reverse repurchase agreements, and an additional 50 billion yuan through 14-day contracts, which have not been used since February. Some 10 billion yuan matured on Friday.

“It is fair to say that the Evergrande situation and its repercussions on the wider real estate market will have a much greater direct impact on Chinese growth than any other regulatory crackdown,” said Alvin Tan, head of the foreign exchange strategy in Asia at Royal Bank. from Canada to Hong Kong. “I wouldn’t be surprised if the PBOC took action to contain the fallout in the money markets.”

The uncertainty over Evergrande prompts Chinese observers to rule out potential worst-case scenarios as they contemplate the pain the Communist Party is willing to tolerate. The pressure to intervene is increasing as signs of financial contagion increase.

Many industries could be at credit risk if Evergrande defaults, Fitch Ratings warned. He said small banks and vulnerable developers would be hit the hardest. With more than $ 300 billion in liabilities, Evergrande’s liquidity stress is fueling concerns across the Chinese real estate industry. Morgan Stanley and Goldman Sachs both lowered industry forecasts citing the potential for an Evergrande default to upset its suppliers, other developers and financial markets.

It all depends on the extent of the real impact on the wider real estate sector, which is critical for the Chinese economy. Risks increase that consumers could fall back further as the company falls behind on promised construction work and faces refunds on wealth management products sold to individuals.


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