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Bangladesh will pay Russia $318 million worth of yuan for a loan payment on a nuclear power plant. Russia, whose state-owned Rosatom is building the nuclear plant, had initially insisted on payment in rubles and refused yuan due to concern over potential conversion losses, according to Bloomberg. But a representative for Rosatom confirmed to the Washington Post that the loan payment will be made in yuan. The payment is partial reimbursement for a $12 billion loan the South Asian country previously received from Moscow, and will help fund a nuclear power plant near the capital city of Dhaka. Bangladesh's yuan payment is the latest example of de-dollarization.
Dollar collapse fears are bogus as the greenback can't be replaced anytime soon, Brad McMillan said. A lot of the talk is often from doomsayers trying to push gold, Commonwealth Financial's CIO said. The dollar "is not only the established choice and, in most cases, the smart choice, but it is the only choice." "Frankly, a lot of the talk is nonsense designed to panic you into buying something the doomsters are trying to sell, often gold," he wrote. "As far as the markets are concerned, the dollar is still where it has always been.
Today's newsletter may not include a job offer, but it will give you a better grasp of what to look for in this still-hot labor market. I'm excited to share this week's conversation with one of the leading experts on jobs and hiring trends. How is that showing up in the labor market? What about the role of AI in the labor market? What do you think of Berger's insights on the labor market?
Fund manager discusses the de-dollarization trend
  + stars: | 2023-04-13 | by ( ) www.cnbc.com   time to read: 1 min
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailThe de-dollarization trend is a reflection that U.S. growth is no longer the only story that mattersThe U.S. decision to freeze Russia's forex reserves last year is the catalyst of an acceleration of de-dollarization as the U.S. dollar has now become a political tool, says Mark Tinker from ToscaFund Hong Kong
He was replaced by Pedro Rafael Tellechea, who had been named to head PDVSA in January. Maduro said that his government was committed to "going to the root" of corruption, calling the probe which began last year "professional, scientific and disciplined." The Finance Ministry, the central bank, and PDVSA did not respond to requests for comment. It is unclear whether the corruption probe and contract review will concretely improve PDVSA's cash flows in the near future. PDVSA last year delayed cash payments in dollars to several of its suppliers because of dwindling income.
Resurgent inflation is devouring the income of Venezuelans - even the relatively privileged ones like Mendoza who have access to U.S. dollars. That is leaving them hungry and struggling to buy food and medicine, they told Reuters. "Neither dollars or bolivars are enough. Many Venezuelans were left to scour through garbage to find food, and millions fled the country to build new lives across South America and beyond. "Whether you pay in bolivars or dollars it is not enough," Lochunga said, sitting in front of his stall.
Venezuela's cocuy producers, however, say limited wild crops and the labor-intensive process of making the drink without additives - the prize-winning version of the liquor - are complicating efforts to increase output. Producers say there is no data on annual national production or sales because much of cocuy output is made for local consumption. A liter of 100% agave cocuy can sell for between $18 and $60, while its production costs average about $12 without commercialization costs. Of the 365 cocuy producers in Lara, whose arid and semi-arid climate makes agave abundant, just 70 make the liquor with 100% agave. The difficult production process begins by cutting back the plant's leaves to reach its "head," said Siquisique producer Nelson de la Rosa.
China has been buying more energy from Russia since the Ukraine war started. Total trade between China and Russia hit a new record high in 2022, up 30% to $190 billion, according to Chinese customs figures. In particular, the energy trade has risen markedly since the onset of the war. Russian companies have been using more yuan to facilitate the increased trade with China. UnionPay, the Chinese payments system, has reportedly stopped accepting cards issued by Russian banks over fears of international sanctions, according to Russian paper Kommersant.
SummarySummary Companies Fed's December meeting minutes due on WednesdayCentral banks' purchase of gold likely to continue in 2023-analystJan 3 (Reuters) - Gold prices hit a six-month high on Tuesday in thin trading, with the market's attention turning to minutes from the U.S. Federal Reserve's latest policy meeting due this week. U.S. gold futures rose 1% to $1,843.90. Minutes from the Fed's December policy meeting are due on Wednesday, which could offer hints on the central bank's tightening path. Gold is considered a hedge against inflation and economic uncertainties, but higher interest rates increase the opportunity cost of holding gold as it pays no interest. The dollar and yield movements will be a key focus for the gold market, Ole Hansen, head of commodity strategy at Saxo Bank said in a note dated Monday.
Denis Balibouse | ReutersLONDON — The price of gold notched a six-month high early on Tuesday, and analysts believe the rally has further to go in 2023. Looking ahead, Hansen suggested the key events for gold prices would be Wednesday's minutes from the latest U.S. Federal Reserve meeting and Friday's U.S. jobs report. A full dovish pivot by central banks this year would likely have major implications for gold prices, according to strategists. "It is our opinion that central banks will pivot on their rate hikes and become dovish during 2023, which will ignite an explosive move for gold for years to come. We therefore believe gold will end 2023 at least 20% higher, and we also see miners outperforming gold with a factor of two."
On Friday, China's President Xi Jinping pushed for the settlement of energy trades in the yuan. At a summit with Arab leaders, Xi said China would continue importing large amounts of oil. Settling more trade in the yuan could weaken the US dollar's global dominance in the long run. Most of the world's trade is now denominated in the US dollar. "The Saudis have a lot to buy from China and China has a lot to buy from Saudi Arabia.
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailDe-dollarization is already happening between China and Saudi Arabia, says think tankGal Luft of the Institute for the Analysis of Global Security says "there's no reason why two countries that already have vast exposure to the U.S. dollar should maintain their trade in a third party currency."
China is willing to import more oil from Saudi Arabia, President Xi Jinping said Friday. That could spur "de-dollarization", if Saudi Arabia agrees to accept yuan payments. He also agreed to step up coordination with Saudi Arabia on energy policy in his meeting with Crown Prince Mohammed bin Salman. "The Saudis have a lot to buy from China and China has a lot to buy from Saudi Arabia," Luft said. The western sanctions against Russia have led to a cooldown in the relationship between the US and both China and Saudi Arabia.
LONDON, Dec 5 (Reuters) - Banks in countries such as Ukraine and Turkey face a "very high" risk from restrictions on capital flows, weak international reserves and a high level of foreign currency debt, Moody's Investors Service said in a report on Monday. "The banks become vulnerable to an increase in defaults on foreign currency loans granted to unhedged borrowers which hurts the banks' profitability, while their liquidity and capital can also come under pressure." MSCI's index of emerging market currencies (.MIEM00000CUS) is on course for its sharpest drop since 2015. "Altogether 20 banking systems face high or very high foreign-currency risk," the report added. Foreign exchange risk is at the lowest in emerging markets such as Chile, Ivory Coast and Indonesia.
CARACAS, Dec 1 (Reuters) - After years of struggle, veteran bakeries in Venezuela's capital Caracas are cooking up a variety of delectables, in the latest sign that the country's slight economic boost is reviving some family-owned small businesses. Dollarization meant freedom from the troughs and peaks of Venezuela's local currency, extra dough for spending in some sectors, and greater ease for importing certain ingredients, like wheat flour. Processing and distribution of wheat flour was under state control for years and supplies were intermittent, leading to lower production, while Venezuelans saw bread rationed. Venezuela imports wheat flour for processing. Despite the county's economic improvement, low salaries remain a hurdle for bakeries looking to grow.
Venezuela's monthly inflation slows to 6.2% in October
  + stars: | 2022-11-04 | by ( ) www.reuters.com   time to read: +1 min
CARACAS, Nov 4 (Reuters) - Venezuela's monthly inflation in October hit 6.2%, a sharp slowdown from September when prices rose 28.7%, according to data released on Friday by the country's central bank. President Nicolas Maduro's government has tapped the brakes on inflation with orthodox economic policies aimed at exchange-rate stabilization, reduced public spending and tax hikes. Year-on-year inflation stood at 155.79%, according to Reuters calculations based on central bank figures, the highest in the Latin American region. High prices coupled with a de facto dollarization in some sectors have severely widened wage gaps between public and private sector workers. The minimum wage is equivalent to about $15 per month and has not been revised since last March.
The change opens Venezuela to more imports from its neighbor as domestic manufacturers are still struggling, though some got a boost from a de facto dollarization. Tini's company Full Time, one of Venezuela's largest shoe manufacturers, is set to increase production to 20,000 pairs this year from 12,000 in 2021, but imports worry him. Local industries "cannot compete on equal terms with Colombian products," said Luigi Pisella, president of Conindustria, one of the top business associations representing Venezuela's manufacturers. Between January and August this year, the Colombian government's DANE statistics agency valued the country's exports to Venezuela at some $400 million while Venezuelan imports to Colombia were just $56 million. Business people said there are few incentives for manufacturers, high taxes and not enough efforts to combat inflation.
WHAT HAPPENS NOW TO VENEZUELANS IN TRANSIT TO THE UNITED STATES? Those in transit may attempt to reach the United States despite the near certainty that they will be sent back to Mexico. It is unclear where Venezuelans waiting in Mexico will stay, as Mexico's migrant shelter system is often overwhelmed. Then in 2014, Venezuela's economy buckled as global oil prices tumbled, and living conditions further deteriorated as stringent price controls created widespread shortages. Remittances to Venezuelans from relatives in the United States or elsewhere help but are insufficient for most.
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