Mon. AM TNT News Articles 1-31-22

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Tishwash:
Al-Zamili: We seek to legislate a law granting a percentage of oil imports to citizens

The First Deputy Speaker of the House of Representatives, Hakim Al-Zamili, announced: “The House of Representatives is seeking to legislate a law by deducting a percentage of oil imports and giving it to citizens.”

Al-Zamili directed, during a meeting with senior advisers to the House of Representatives, “to expedite the preparation of a comprehensive strategy for the legislative and oversight policy for this parliamentary session, and to form a committee to follow up on the implementation and activation of the government’s suspended laws.”

He said, according to a statement by his media office: “The current session will focus on enacting laws that serve the citizens.”

He added, “We seek to legislate a law to deduct a percentage of oil imports and grant it to the unemployed, unemployed graduates, patients and people with special needs, as the first law to be voted on in this session, as well as other important laws related to unemployment, revitalizing industry and national agriculture, and controlling border crossings.”

He instructed: “To form a committee to combat narcotics and psychotropic substances, amend its law, find effective solutions to prevent their spread and trafficking, and establish healthy and practical mechanisms for treating addicts.”  link

The Central Bank of Kuwait allows applications to establish digital banks

The Central Bank of Kuwait announced the opening of the door to receive applications for the establishment of new banks that provide their services completely digitally through a general banking license. It also allowed existing banks to form a digital banking unit within the bank without the need for a new license .

The Central Bank has given those wishing to establish this type of bank a deadline to submit their applications, which ends on June 30, indicating that the results of the submitted applications will be announced at the end of this year 2022, according to what was stated on the bank’s website today, Monday .

The Central Bank clarified that this decision comes as part of the bank’s endeavors towards accelerating the digital transformation process at the level of the Central Bank and the banking and financial sector, and a number of steps were announced that would start a new era of digital banking and financial work .

In the context of supporting and enabling financial technology companies (Fintech) , the Central Bank is currently working on updating the regulatory framework for the work of these companies in the areas of payments, microfinance and the experimental regulatory environment .

This came during a virtual meeting entitled “Empowerment and Empowerment” held by the bank today, Monday, during which it shed light on the Central Bank of Kuwait’s digital strategy with the aim of achieving further development in analytical tools and accelerating the digital transformation process .

In a video broadcast by the Central Bank on its website, Muhammad Al-Khamis, Director of the Office Supervision Department at Bank of Kuwait, said:

The Central Bank said that the bank has completed the development of a framework for digital banking “with the aim of stimulating innovation,” noting that this framework allows the provision of digital banking services according to three models of digital banking   link

Harambe:
Zimbabwe Dollar’s Second Death Seen as Only a Matter of Time | Bloomberg

(1/30/22)

When Zimbabwean businessman Nigel Chanakira asked 100 chief executive officers at a seminar in Harare on Jan. 27 if they were willing to use the local currency, only one raised his hand.

That reluctance is a stark demonstration of the government’s failure to win confidence in the Zimbabwe dollar, the reintroduction of which Finance Minister Mthuli Ncube has staked the stagnating economy’s recovery on. For the second time in two decades, Zimbabweans are abandoning their local currency.

At restaurants, a simple request for “the rate” sees one’s bill halved if it’s met in hard currency, and supermarkets openly offer discounts for goods purchased in U.S. dollars. The government paid public workers their Christmas bonuses in dollars, and the revenue service collects a third of its income in greenbacks.

“We can’t deny the reality,” Chanakira, the founder and former CEO of now-closed bank Kingdom Financial Holdings Ltd., said in an interview. “When you get the Zimbabwe dollar you spend it quickly. No one wants to save in that currency.”

New Policy

Between 2009 and 2019, Zimbabwe’s economy was dollarized after hyperinflation led the government to print trillion-Zimbabwe dollar notes before abandoning its currency, leaving the country’s name synonymous with economic malfunction. While the subsequent dollarization tamed price growth, it hurt businesses as neighboring countries using their own depreciating currencies undercut Zimbabwean manufacturers.

“Zimbabwe had become uncompetitive by 2013 and was burdened by an expensive workforce,” John Legat, CEO of the country’s oldest brokerage, Imara Asset Management Ltd., said in a note to clients.

In February 2019, the government dropped a peg that kept a precursor of the Zimbabwe dollar at parity with the U.S. dollar. In June, it was rechristened the Zimbabwe dollar and use of foreign currency was briefly outlawed. Today the currency trades at 115 to the greenback, and more than twice that on the black market.

While inflation slowed from a 12-year high of 837% in July 2020, it was at 61% in January, still rapidly eroding the value of the local unit.

Officials including Ncube, a former Oxford University lecturer, and Reserve Bank of Zimbabwe Governor John Mangudya, said government policy is to stick with use of the Zimbabwean dollar.

“The country is not re-dollarizing,” Mangudya said in a interview on Jan. 17. “We need to find a home for our currency.”

Ncube and his ministry didn’t respond to requests for comment.

Alois Burutsa, the lone defender of the Zimbabwe dollar at Chanakira’s meeting, said in an interview that “without our own currency, our exports become uncompetitive.” He’s general manager of Buy Zimbabwe, an organization that promotes local goods.

Capitulation

Yet central bank figures show that 44% of transactions in the country are conducted in greenbacks. The American currency is used to pay for everything from fuel to food, passports, medicines and school fees. Econet Wireless Zimbabwe Ltd., the country’s largest mobile phone operator, offers additional airtime and data if purchases are made in U.S. dollars.

With the Zimbabwe dollar untradeable outside the country, companies need foreign currency to pay for imported equipment, consumer goods, and to placate an increasingly dissatisfied workforce.

And it’s not only businesses that are seeking alternatives to the local currency. The government itself is increasingly finding it has to pay in U.S. dollars if it wants to get things done. Already it’s told public workers that they’ll be paid partly in hard currency this year.

According to Imara, the brokerage, 45% of infrastructure contracts are being met in dollars and the government has undertaken to partially compensate depositors for the loss in value of their savings when it dropped the peg to the dollar.

“Dollarization is the ultimate outcome of a failed economic policy,” said Gift Mugano, executive director at Africa Economic Development Strategies, a Harare-based consultancy. The Zimbabwe dollar “will be in the graveyard” by June, he predicted. Imara says it’ll be largely obsolete by the end of the year.

Chanakira was more optimistic: he said the currency could survive for another two years.

https://www.bloomberg.com/news/articles/2022-01-30/zimbabwe-dollar-s-second-death-seen-as-only-a-matter-of-time

Source: Dinar Recaps

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