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Thurs. PM KTFA News Articles 12-16-21

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Samson » December 16th, 2021

IMF: International debt has risen to the highest level since World War II

12/16/2021 00:38:06

The International Monetary Fund announced that global debt rose to 226 trillion dollars last year, recording the largest jump in one year since World War II, warning of the risks of high interest rates.

The coronavirus pandemic has caused debt to reach 256 percent of global GDP in 2020, an increase of 28 percentage points, Vitor Jasper, director of public finances at the IMF, and other officials said in a blog.

They added that government borrowing accounted for just over half of the $28 trillion increase, but private sector debt among non-financial businesses and households also hit new highs.

They added that developed economies and China accounted for 90 percent of the increase in debt due to low interest rates, while debt rose at a slower pace in developing countries, mostly hampered by high borrowing costs and limited access to financing.

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They noted that higher interest rates would reduce the impact of the increase in public spending and would exacerbate concerns about debt sustainability.

They stressed that “the risks will increase if interest rates rise faster than expected and growth falters.”

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The World Bank announces $93 billion to fund the poorest countries

16th December, 2021

The World Bank announced that the International Development Association, its arm for the poorest countries, has secured a record $93 billion in funding to help these countries deal with the consequences of the COVID-19 pandemic and boost economic growth.

The bank said in a statement that this is the largest “replenishment” ever of the resources of the International Development Association, which provides financial support to 74 countries, the majority of which are in Africa.

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The International Development Association is part of the “World Bank Group” concerned with helping the world’s poorest countries by providing loans and grants for programs that promote economic growth, reduce inequality and improve living conditions in these countries. This institution is financed primarily by contributions from the member countries of the Bank. Donors meet every three years to replenish their resources. 

The Foundation’s 19th round of funding began in July 2020, a year earlier than it was supposed to, given the current crisis. “The generous commitment of our partners today is a critical step to support poor countries in their efforts to recover from the COVID-19 crisis,” the statement quoted World Bank President David Malpass as sayingLINK

The lira collapses after the Turkish Central Bank’s decision to cut interest rates

12/16/2021 15:20:34

 The Turkish Central Bank decided today, Thursday, to cut the interest rate by 100 basis points, in light of this, the Turkish lira plunged to historical levels.

According to Bloomberg data, the Turkish currency was trading at 15.4668 lira to the dollar, and the currency fell to its lowest level ever.

The decline in the lira came after the Turkish Central Bank decided to cut the interest rate by 100 basis points on repurchases, “repo” for a week, to 14 percent.

The central bank follows a policy of reducing the interest rate despite the high rates of inflation in the country.   LINK

Iraq foreign reserves rise on currency devaluation, oil prices – cbank governor

15th December, 2021

Iraq’s foreign currency reserves have risen to $64 billion from $48 billion since Iraq devalued its currency almost a year ago, Iraqi Central Bank Governor Mustafa Ghalib said on Tuesday.

Ghalib said the devaluation had helped bring the reserves up, and that Iraq’s economy was much healthier than during the middle of the coronavirus pandemic, when oil prices plummeted and Baghdad was in preliminary talks with the International Monetary Fund for a possible loan.

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“We were meeting sometimes twice a day with the IMF and the World Bank, but the Iraqi government’s financial situation is much better now,” Ghalib told Reuters in an interview at his office in Baghdad.

“Reserves might have decreased in the 30s of billions of dollars without the devaluation … the rise in oil prices has also helped,” he added.

Ghalib said he expected Iraq’s 2022 budget to be based on an oil price of roughly $45 per barrel. Iraq, OPEC’s second-largest producer, draws around 95 percent of its state revenue from oil sales.

Iraq currently owes its neighbour Iran around $5 billion for energy imports that are crucial for keeping the lights on, but Baghdad is abiding by U.S. sanctions that prohibit it from paying any cash to Iran, Ghalib said.

Iraq has paid some of those power debts in commodities and supplies, for example buying some $250 million worth of Russian-made Sputnik COVID-19 vaccines for Iran, as well as making wheat purchases for Tehran, he said.

Ghalib confirmed reports that Iraq has opened an account with the China-backed Asian Infrastructure Investment Bank, saying it has deposited around $100 million in the account for possible future payment for infrastructure projects.  LINK

Al-Saadawi: The Money Laundering Process Continues, And The Smuggling Of Dollars From Iraq Takes Place On A Daily Basis

16th December, 2021

A former member of the Finance Committee, Abdul-Hadi Al-Saadawi, confirmed on Thursday that the dollar’s exit from Iraq has not stopped until today.

Al-Saadawi said, in a statement to the “Information” agency, that “the money laundering process has become greater than before, and there is no fear of the law because there are some parties involved in this crime that humiliate them by all procedures.”

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He pointed out that “the government, the leaders of the outlets and the economic men have so far not submitted any proposal to automate the outlets, and this is evidence of two things, the first is the problem of the law and the second is the state’s knowledge of this problem and not addressing it.”

He pointed out that “the federal government, until this moment, has not controlled its external borders and does not have sufficient power to control the money laundering and dollar smuggling process.”

According to an unofficial statistic circulated by economists on the communication sites, the volume of Iraqi funds in the world’s banks amounted to 60 billion dollars, restricted to fictitious names and projects on paper only.   LINK

Vietnam : Digitalisation key to economic recovery

16th December, 2021

Digitalisation is key to Việt Nam’s economic recovery and crucial to Vietnamese firms’ ability to compete and create value, said policymakers and business experts at a conference yesterday discussing how the country’s economic policies can help foster creativity and innovation among the business sector. 

Deputy head of the department for enterprise development under the Ministry of Planning and Investment Bùi Thu Thủy said digitalisation was no longer an option for businesses, especially as the world is still trying to recover from the pandemic. The digitalisation of business data, management, automation, reporting and collaboration within enterprises should be given the highest priority. 

While Việt Nam enjoyed a relatively high broadband penetration rate compared against other countries in the region, digitalised transactions still remained at just over 22 per cent, lower than Indonesia (34 per cent) and Thailand (62 per cent). Online business transactions were also on the low side at just 10 per cent against Indonesia (49 per cent) and Malaysia (52 per cent). 

The most common issues experienced by Vietnamese businesses with digitalisation include a lack of financial resources, poor IT infrastructure and cyber security and a shortage of skilled workers. 

The pandemic and a number of recently implemented policies by the government have given digitalisation a speed boost. Coupled with a change in consumer behaviour to contactless transactions the country’s digital economy has reported a 10 per cent growth rate since last year and US$135 billion in sales volume. She said the ministry is willing to provide support to all businesses to make the transition to digital. A number of tools have been made available at http://digital.business.gov.vn to help businesses self-evaluate and build a digitalisation strategy.

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The ministry has also been building a consultant network specialised in digital transformation. So far, the network has connected with over 100,000 clients and held numerous training programmes for businesses. 

Director-general of V-startup, a support network for Vietnamese start-ups, Nguyễn Thy Nga said enterprises are at the core of the country’s creativity and innovation push. Nga said creative and innovative solutions in organisation and management help businesses cut down transactional and operational costs while improving productivity and efficiency. She said creativity and innovation must come from an emphasis on business culture, one in which managers and workers must continue to adapt and change. 

Nguyễn Tuấn Lương from UNDP in Vietnam’s department for creativity and innovation said the push for digitalisation offers the country an opportunity to move in the direction of greener development and to build an economic ecosystem for sustainable development. 

Dr Chử Đức Hoàng from the National Technology Innovation Fund said Vietnamese enterprises, especially SMEs, were in dire need of financial resources for research and development activities as well as of comprehensive legal and policy frameworks to encourage the implementation of science and technology in the business sector.  VIDEO

Source: Dinar Recaps

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