Argentina has devalued the peso by more than 50%, along with cuts in spending in tough measures aimed at tackling a deep economic crisis. Argentina on Tuesday announced a significant devaluation of its currency as part of a series of drastic economic measures to address the country's ongoing economic challenges. The peso will be weakened by over 50% to 800 per dollar, new Economy Minister Luis Caputo said.   "For a few months, we're going to be worse than before," Caputo said in a televised message, two days after libertarian Javier Milei took charge as the president of South America's second largest economy. Argentina's annual inflation rate is at 143%, the currency has plummeted, and 40% of Argentines are living in poverty. At his swearing-in ceremony, Milei promised a new era for the country but warned of painful austerity measures.   "The bottom line is that there is no alternative to austerity, and there is no alternative to shock treatment," Milei warned over the weekend.  On Tuesday the economy minister also said that there would be cuts in the state's generous subsidies of fuel and transport. Caputo said politicians had long supported the subsidies to "deceive people into believing that they are putting money in their pockets. But as all Argentines will have already realized, these subsidies are not free but are paid with inflation."   He said Argentina needed to handle a deep fiscal deficit, which he put at 5.5% of GDP, adding that the country had a fiscal deficit for 113 of the last 123 years, the cause of its economic crisis. "We're here to solve this problem at the root," he said. "For this we need to solve our addiction to a fiscal deficit." Curbs on state spending  Aside from the spending cuts, Caputo also said that all state advertising would be suspended for a year, adding that it had cost 34 billion pesos ($92 million, €86 millon) in 2023. In addition "The state will not tender any more new public works, and will cancel approved tenders whose development has not yet begun."   "The reality is that there is no money to pay for more public works that, as all Argentines know, often end up in the pockets of politicians or businessmen on duty," he said. Another step would be canceling the renewal of public jobs contracts that were less than a year old. President Milei has already cut nine government ministries, which Caputo said would slash 34% of all political jobs.   Meanwhile, the International Monetary Fund (IMF) deemed the measures "bold" and said in a statement it would "help stabilize the economy and set the basis for more sustainable and private-sector led growth" following "serious policy setbacks" in the past months. "I welcome the decisive measures," IMF chief Kristalina Georgieva said, calling it "an important step toward restoring stability and rebuilding the country's economic potential."

Prime Minister Sheikh Hasina on Wednesday (November 01, 2023) launched local currency card Taka Pay to reduce dependency on international card schemes like Visa and Mastercard and save much-needed US dollars. Bangladesh Bank introduced the card, first of its kind in the country. Reports UNB PM Hasina inaugurated the card from her official residence Ganabhaban. She was connected virtually with the headquarters of state-owned Sonali Bank, private City Bank and Brac Bank. The three banks have been given responsibility to issue the Taka Pay card in collaboration with the central bank. 'Taka Pay' will provide the same service nationally through the use of 'The National Payment Switch of Bangladesh', an electronic payment platform operated by the BB. Initially, the card can be used within the country. Later the central bank will introduce Taka-Rupee card which can be used for shopping in neighbouring India.

The Russian Government has approved a list of more than 30 friendly and neutral countries, banks and brokers which will be allowed to trade on the Russian currency market as well as on the derivatives market.    Bangladesh is included in this list, Russian embassy disclosed it on its official facebook page.    The list of other countries included Armenia, Azerbaijan, Belarus, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, Algeria, Bahrain, Brazil, Venezuela, Vietnam, Egypt, India, Indonesia, Iran, Qatar, China, Cuba, Malaysia, Morocco, Mongolia, Oman, Pakistan, Saudi Arabia, Serbia, Thailand, Turkey, South Africa and the United Arab Emirates.

The leaders of the BRICS countries have agreed on a roadmap for how to allow new states to join their group of up-and-coming economies, South African Foreign Minister Naledi Pandor told Ubuntu Radio — a station run by her own ministry. "We have agreed on the matter of expansion," she said. "We have a document that we've adopted which sets out guidelines and principles, processes for considering countries that wish to become members of BRICS...That's very positive," Pandor said. She added that further details would be provided by the BRICS leaders by the end of the summit, currently taking place in Johannesburg. Expansion of the bloc was one of the main topics on the agenda. More than 40 countries are interested in joining, with at least 22 — including Iran, Venezuela and Algeria — having already made formal requests to become members. Brazil backs BRICS common currency Brazilian President Luiz Inacio Lula da Silva spoke in favor of setting up a new common currency to be used between the BRICS members instead of the US dollar. "The decarbonization of our economies needs to be accompanied by dignified jobs, industrialization and green infrastructure and services for all," he wrote on X, formerly known as Twitter. He added that the BRICS New Development Bank in Shanghai, headed by former Brazilian president and ally of Lula, Dilma Rousseff, would be able to take on the challenge. "The creation of a currency for transactions between the BRICS countries reduces our vulnerabilities," Lula said. The Brazilian president didn't go into further detail on his proposal.

As Pakistan’s foreign currency continues to witness a drop-down, the crisis-hit country requires dollar inflows of USD 9 to USD 12 billion in the shape of rollovers and fresh loans from bilateral donors and commercial banks to get a breathing space. The revival of the IMF will only be possible till the end of June 2022 if everything goes well between the two sides. Pakistan and the IMF will have to strike a staff-level agreement after holding talks in mid-May and then the Fund’s Executive Board requires a 4 to 6 weeks period to get approval on the next tranche of USD 960 million under the USD 6 billion Extended Fund Facility (EFF), media reports stated. Without the support of bilateral partners and seeking more loans from commercial banks, this gap cannot be fulfilled on a short-term basis, the report stated further. Pakistan has sought a nine-month extension into an Extended Fund Facility (EFF) with an increase in the size of the program by USD 2 billion to jack up total funding of USD 8 billion. The IMF program was going to expire in September 2022 but with the request for an extension now it would be matured in June 2023. Keeping in view the conservative estimates, the current account deficit might touch USD 16 to USD 17 billion by the end of the current fiscal year. However, some independent economists suggest that it might touch $18 to $20 billion for the current fiscal year. “Pakistan will have muster up dollar inflows of USD 9 to USD 12 billion depending upon the level of current account deficit in remaining months so the government will have to ensure rollover of commercial loans and deposits from China, seeking more generous package from Saudi Arabia and securing commercial loans from a consortium of banks in the remaining period of the current fiscal year,” top official sources confirmed while talking to The News, on Monday. Seeking fresh deposits and utilization of oil facilities on deferred payments, Prime Minister Shehbaz Sharif will be visiting Saudi Arabia this week. The Ministry of Finance has worked out a proposal for seeking an extension in deposits of USD 3 billion in line with the extension into the IMF programme, reported The News. Saudi Arabia has previously deposited USD 3 billion in Pakistan’s central bank to help the cash strapped country with the foreign reserves, suggested a statement by Saudi Fund for Development. Source: ANI  

    While the $1.5 billion notes priced at 2.875% mature in ten years in 2032, the $1.75 billion notes priced at 3.625% mature in 30 years in 2052, and the $750 million notes priced at 3.750% mature in 40 years in 2062. Moody's, that issued a 'Baa2' rating with a stable outlook to the latest RIL bonds, believes that the company's earnings will continue to improve over the next 12-18 months across all its business segments, such that its credit metrics will remain strongly positioned for its ratings.   Reliance Industries (RIL) on Thursday said it has raised $4 billion in India’s largest-ever foreign currency bond issuance. The multi-tranche bonds were oversubscribed three times. The company said, proceeds from the issuance will be used to refinance high-cost borrowings.   The three tranche bonds have a maturity of 10-year, 30-year and 40-year, and were 120 basis points (bps), 160 bps and 170 bps over the respective US Treasuries benchmark, the company said in a statement. While the $1.5 billion notes priced at 2.875% mature in ten years in 2032, the $1.75 billion notes priced at 3.625% mature in 30 years in 2052, and the $750 million notes priced at 3.750% mature in 40 years in 2062. This is the first time any private company rated ‘BBB’ from Asia ex-Japan has achieved lowest coupon for 30-year and 40-year issuances. Also, it is the “first-ever 40-year tranche by a BBB private sector corporate from Asia ex-Japan,” RIL said.   The bonds received orders from over 200 accounts in Asia, Europe and the United States, RIL said. Srikanth Venkatachari, joint chief financial officer of RIL, said, “The support received from the marquee international capital market investors is reflective of the strength of our underlying businesses with established growth platforms across energy, consumer and technology as well as robustness of our balance sheet.” RIL last year announced an investment of Rs 75,000 crore to improve its clean energy footprint and become carbon neutral by 2035. To that effect the company is setting up five giga factories in the renewable energy space in Jamnagar, Gujarat and has already invested into five clean technology companies in the last six months.   As of September 30, 2021, the company had adjusted cash and cash equivalents, including quoted marketable securities, of about Rs 1.9 lakh crore ($25.6 billion). “Its existing cash, along with expected cash flows from operations, will be sufficient to cover its cash outflows for capital spending and debt maturities in the next 18 months,” Moody’s said.   RIL’s adjusted net debt/Ebitda (operating profit) was estimated at around 1.1 times as of September 30, 2021. The rating downgrade trigger happens when net debt/Ebitda reaches 3.0 times. Moody’s expects the company to generate sufficient cash flows from operations each year to fund its capital spending. Source: Financial Express