Month: March 2011
CUMBERLAND The Western Potomac Chapter American Red Cross has released the following information regarding assistance to victims of the recent earthquake and tsunami in Japan.
Following Fridays magnitude 9.0 earthquake and resulting tsunami that left towns and villages in Japan devastated, the Japanese Red Cross has indicated that it will accept financial support from the American Red Cross for its role in providing first aid, emotional support and relief items to those displaced. Anyone wishing to donate to the relief efforts can do so in several ways.
Send a check made out to American Red Cross and mail to 400 Cumberland St., Cumberland, MD 21502. Checks should be noted that the donation is for JAPAN EARTHQUAKE. All funds will be forwarded to the organizations national headquarters and become part of the monetary commitment to helping the victims.
Donors wishing to contribute online can go to www.redcross.org or text REDCROSS to 90999 to make a $10 donation.
The Red Cross has not received any requests for blood from the Japanese Red Cross, the Japanese government or the US State Department.
As of Tuesday, there has been no request for in-kind support from the Japanese Red Cross. Many donations, though well-intentioned, have hidden costs and pose many complications. Collected items need to be examined, sorted, cleaned, packaged, shipped and then distributed at the site, which requires time, money and personnel to process, all precious resources in disaster relief.
(RTTNews) – The Greek economy may bottom out in the second half of this year, supported by robust recovery among trading partners, the International Monetary Fund said Wednesday.
The prospects for external demand has improved due to faster recovery in Greece’s trading partners along with improving competitiveness and a rebound in tourism from the low 2010 base, an IMF mission to the country said after completing the third review of the economic program.
According to latest estimates, the economy shrank 4.2 percent last year and the Fund projects a milder 3 percent contraction this year. The gradual recovery will start during the latter half of the year and the economy is projected to grow 1.1 percent next year.
However, domestic demand remains weak, reflecting the deteriorating labor market and tight credit conditions.
According to the IMF mission, net additional measures amounting to 3.5 percent of GDP is required to meet the 7.5 percent deficit target set under the EUR 110 billion bailout-deal.
To support the successful implementation of the deficit reduction plan, the government must in parallel continue to make progress with combating tax evasion and tightening its control over spending, the IMF staff suggested.
On present trends, the IMF expects the budget to fall short of the program target by some 0.75 percent of GDP.
Earlier this week, the Fund approved the immediate disbursement of EUR 4.1 billion, taking the total disbursements to about EUR 14.6 billion.
by RTT Staff Writer
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The government of Kenya, East
Africa’s largest economy, will appoint a new Monetary Policy
Committee to succeed its inaugural body whose term expires on
April 30, two sitting members of the team said.
The Central Bank of Kenya’s nine-member MPC, as the
committee is known, has led a series of eight interest-rate cuts
since December 2008 to a record low of 5.75 percent in a bid to
coax commercial lenders to lower the cost of loans and boost
The reductions underpinned a growth rate that swelled to
5.4 percent last year from 2.6 percent in 2009 and 1.7 percent a
year earlier, even as commercial banks failed to supply cheaper
credit. Kenyan banks’ average lending rates dipped to 14.03
percent in January from 14.22 percent in 2009.
“I think new blood, as it works around the world, would
bring in new ideas,” Sheila M’Mbijjewe, an MPC member, said in
an interview yesterday in Nairobi, the capital.
In addition to setting the central bank’s benchmark rate,
the MPC also decides on the cash-reserve ratio — the percentage
of deposits that commercial banks must keep at the central bank
— and advises on the sale of government securities. The
committee uses measures including inflation, the level of
foreign-exchange reserves, money supply and economic growth to
determine its policy stance. It holds formal meetings every two
months to analyze the data collected over the period and take
Members are permitted to serve two three-year terms, Terry
Ryan, who is also an MPC member, said in an interview. Some of
the current panelists may have their contracts renewed as there
is “importance for continuity,” M’Mbijjewe said.
The MPC’s four “external” members include M’Mbijjewe, a
former director for finance and retail at Standard Chartered
Bank Kenya Ltd. (SCBL); Ryan, a former economic secretary at Kenya’s
Finance Ministry; and Wycliffe Mukulu, the former head of
Treasury at the Kenyan unit of ABN Amro Bank NV, which was since
sold. Rose Ngugi left the MPC about six months ago to take a job
with the International Monetary Fund. Kenyan law allocates two
of the seats on the MPC to women, M’Mbijjewe said.
The permanent membership of the committee comprises the
central bank governor, at present Njuguna Ndung’u; his deputy;
the bank’s director of research; and an official responsible for
monetary policy operations. Ndung’u was earlier this month re-
appointed for a second, four-year term as governor. Kenya’s
Finance Ministry contributes a ninth, non-voting member.
The MPC’s next meeting, which will be its final under the
current configuration, will be on March 22, a spokeswoman for
the bank said today. The meeting was brought forward from an
earlier announced March 23, she said, without providing further
details. The appointment of the new MPC members will probably be
announced in a government notice.
The MPC, which helped shepherd the country through the
global financial crisis, is currently assessing the possible
impact of political unrest in North Africa and the Middle East
and the fall-out for the global economy from Japan’s earthquake
and tsunami last week, M’Mbijjewe said.
One of the most challenging periods faced by the committee
since its inception three years ago was when the initial public
offering of mobile-phone operator Safaricom Ltd. (SAFCOM) drained
liquidity from the system, she said. In 2008, Safaricom
attracted four times more applications than the number of shares
offered, raising 50.8 billion shillings ($591.8 million).
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Aworking group set up by the Reserve Bank of India (RBI) has recommended important changes to the way monetary policy is conducted. The key to monetary policy is that changes in the policy rate should be immediately transmitted to bank lending rates. This can best be done when liquidity is scarce. Hence, the committee’s key recommendation is that RBI should keep the money markets in a deficit liquidity situation, with a deficit of around 1% of bank deposits. This will force the banks to borrow from RBI at the repo rate, ensuring that it becomes the single policy rate.
RBI’s policy rate has fluctuated between the repo rate in times of scarce liquidity and the reverse repo rate, or the rate at which banks park their overnight surpluses with RBI, under conditions of excess liquidity. This has led to uncertainty, which has been exacerbated because the gap between the two rates has fluctuated. The committee now recommends the gap between the repo and reverse repo rates be kept constant at 100 basis points–the reverse repo rate will move automatically with changes in the repo rate. The committee also says the now moribund bank rate should be revived, as the rate under an exceptional facility at which RBI lends to banks that do not have the excess government securities over and above the statutory requirements to offer as collateral to avail of repo borrowing. This bank rate is proposed to be fixed at 50 basis points above the repo rate, which means the gap between the upper and lower bounds of the corridor will be fixed at 150 basis points. Liquidity will be managed through open market operations, or RBI’s buying and selling bonds. Another important suggestion is to auction off the government’s unutilized cash balances with RBI–this will infuse liquidity at a time when it is very scarce.
In short, the committee’s recommendations are aimed at improving transparency and reducing uncertainty. The challenge will be to implement them, in particular the key recommendation of keeping the money markets always in a deficit mode.
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TOKYO (Nikkei)–The government on Tuesday nominated Sayuri Shirai, an expert on the Chinese yuan, euro and other currencies, to replace Miyako Suda on the Bank of Japans highest decision-making body.
Specializing in international economics, the 48-year-old Shirai has worked as an economist at the International Monetary Fund. She is currently a Keio University professor. The market sees her appointment increasing discussions on imbalances in the global economy.
Shirais appointment requires the approval of both houses of parliament.
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FRANKFURT, March 8 (Reuters) – Bank of Japan Governor
Masaaki Shirakawa said on Tuesday that Japan needed loose
monetary policy combined with supportive fiscal spending to help
The main cause of Japans lower trend growth rate,…
Is the US dollar really doomed? If it were for some headlines, you would certainly think so. Because of the Made in the USA financial crisis, growing budget deficits and debt, increasing dissatisfaction with the international monetary system, and the emerging power of countries such as China, many voices are now proclaiming the eventual demise of the dollar.
Not so fast, some discerning minds warn. One of them is Barry Eichengreen, Professor of Economics and Political Science at the University of California, Berkeley, and author of the recently released book, Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System. He came to present his new book to the World Bank this week, sparking a fascinating debate not only about the future of the dollar, but about global politics.
Im not predicting its demise, but that it [the dollar] will share the stage, Eichengreen concluded.
But to get here, the professor first debunked four prevailing myths:
- Widespread international use of a currency confers on its issuer geopolitical and strategic leverage.
- Incumbency is an overwhelming advantage in the competition for reserve currency status.
- The dollar is now doomed to lose its international currency status.
- There is room for only one international currency.
As Exorbitant Privilege makes clear, its a countrys position as a great power that results in the international status of its currency, not the other way around. Regarding the incumbency myth, the British pound, for instance, remained the dominant international currency until after World War II, even after the US had overtaken Britain as the leading economy. And what about the menacing euro, the emerging Chinese reminbi, and the Special Drawing Rights (SDRs) from the International Monetary Fund? Professor Eichengreen makes clear that despite their growing importance, they cannot yet compete with the currency of the US, still the largest economy in the world with the largest and deepest financial markets of any country.
But all of the above doesnt mean that the dollar will remain untouched. In fact, there is room for more than one international currency. There is no reason that only one country can have financial markets deep and broad enough to make international use of its currency attractive, writes Eichengreen. For him, the emerging world is one in which several international currencies coexist: dollar, euro, and reminbi.
We are definitely moving into a world with emerging currencies, and multipolar monetary and financial systems, he explained at the World Bank. Will this be a better international system than what we have now? Only time will tell, but for now many like Professor Eichengreen and I believe such a system will better reflect the reality of our multipolar world, and therefore, make it more stable.
This blog was originally posted on the World Bank Institute Growth and Crisis website.
The exchange rate of China’s currency will not be on the agenda when a G-20 meeting is held in Nanjing at the end of the month, a Foreign Ministry official said Tuesday.
The Group of 20 seminar on March 31 will be opened by French President Nicolas Sarkozy and will discuss ideas on revamping the global monetary system.
China has been under international pressure to allow a faster rise in its tightly controlled currency but Foreign Ministry spokeswoman Jiang Yu said the seminar will discuss only international monetary reform.
The renminbi “exchange rate issue is not on the agenda,” she said. Renminbi is the official name for the currency, which is commonly referred to as the yuan.
The meeting will be attended by cabinet ministers and central bank governors from some G-20 countries. Sarkozy has made monetary reform one of his goals during France’s G-20 presidency.
Beijing faces pressure from Washington and other trading partners to ease currency controls that they say keeps the yuan undervalued, giving China’s exporters an unfair price advantage and swelling its multibillion-dollar trade surplus.
Earlier this week, China’s premier Wen Jiabao ruled out allowing a faster rise in the yuan to cool surging inflation, saying Beijing has to consider the impact on Chinese companies and jobs.
Analysts say allowing the yuan to rise faster against the dollar could cool prices by making oil and other imports cheaper in Chinese currency terms. Beijing has restrained the yuan’s rise since the 2008 global crisis to help exporters that employ millions of workers compete abroad.
“The appreciation of the Chinese currency should be a gradual process, because we must bear in mind its impact on Chinese businesses and our employment situation,” Wen told a news conference Monday at the closing of China’s annual legislature session.
Nanjing, which is close to Shanghai, is one of China’s biggest business cities.
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Economics experts in Northern Ireland are united in doubt over whether the Bank of England will raise interest rates as the Monetary Policy Committee meet to decide their verdict this week.
The Bank is coming under mounting pressure to raise rates as a result of soaring inflation.
At the February meeting, a majority of the nine MPC members voted to keep rates steady but one member voted for more quantitative easing, one for a half-point rise in rates and two for a quarter-point rise.
If the MPC votes to keep rates on hold at 0.5% for the 24th month in a row, the benchmark bank rate will remain at its lowest level in the banks 317-year history.
The committee is meeting at the Banks citadel on Londons Threadneedle Street.
Angela McGowan, chief economist at Northern Bank, said it is highly unlikely that the Bank of England will deliver an interest rate hike when the Monetary Policy Committee announces rates tomorrow. It is most probable that the first rate hike will come in August and not May, which had been initially priced in markets until a week ago, she said.
Data will probably show that UK industrial and manufacturing production was strong in January, as indicated by the PMI survey.
But a period of sustained good economic data will be required before any hike is imposed, quite simply one swallow does not make a summer.
Michael Smyth from First Trust also said he believed that the MPC will decide to keep rates on hold.
While external inflationary pressures like oil and food prices remain strong, there is little evidence of any significant domestic inflationary pressures.
Bank of Irelands Alan Bridle agreed that a rise was not a foregone conclusion.
Richard Ramsey, cheif economist at Ulster Bank estimated that there will be a 20% chance of a rate rise, but that he did not expect the MPC to secure a rate hiking majority until May.
Hal Catherwood, head of Brewin Dolphin in Belfast agreed that many in the market have pencilled in May as the likely date.