Angolan government will push for oil sector boost

2019 ◽  
Keyword(s):  
Foreign Exchange ◽  
Deep Water ◽  
Oil Fields ◽  
New Wave ◽  
Foreign Exchange Reserves ◽  
Medium Term ◽  
Institutional Reforms ◽  
Content Type ◽  
Oil Sector

Significance This is the first major test of recent legislative and institutional reforms as President Joao Lourenco’s government looks to bring in new players and revitalise the sector. New exploration is badly needed to restore dwindling production, alongside measures to monetise gas reserves and smaller oil fields, in addition to the large deep-water fields that have traditionally attracted oil majors. Impacts New oil discoveries are the best short-to-medium term hope for shoring up Angola’s foreign exchange reserves. If successful, the licensing round could bring a new wave of offshore exploration and deliver a boost to ports and services industries. The ANPG hopes to put new discoveries on production from 2026 to replace output as existing fields decline. Activity in southern Angola will also affect sentiment in neighbouring Namibia, where oil majors have recently taken new acreage.

Angolan oil sector reform will require innovation

2018 ◽  
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Oil Price ◽  
Structural Reforms ◽  
Medium Term ◽  
Short Term ◽  
Sector Reform ◽  
Content Type ◽  
Oil Sector ◽  
Oil Company

Subject Sonangol priorities. Significance Early structural reforms by new President Joao Lourenco and more positive economic projections for 2018 suggest a potential uptick in Angola’s fiscal fortunes. Since assuming power in September, Lourenco has overhauled the leadership of state-owned oil company Sonangol and dismissed several prominent officials associated with his predecessor Jose Eduardo dos Santos. Separately, Lourenco has moved to tackle the overvalued kwanza. While this will raise debt-servicing costs, this will be partly ameliorated by the recent oil price of over 60 dollars per barrel. Impacts Scrapping the dollar currency peg will help ease the foreign exchange crisis and end payment constraints in the aviation and oil sectors. A more realistic exchange rate will fuel inflation in the short term but will likely improve medium-term economic prospects. Urban support for the People's Movement for the Liberation of Angola (MPLA) could decline further if reforms remain elite-focused.

Libyan unity government could curb public spending

2015 ◽  
Keyword(s):  
Foreign Exchange ◽  
Oil And Gas ◽  
Public Spending ◽  
Foreign Exchange Reserves ◽  
Foreign Reserves ◽  
Medium Term ◽  
Fiscal Health ◽  
Content Type ◽  
Annual Budget ◽  
Spending Cuts

Significance The two largest oil ports, Ras Lanuf and Es Sider -- with a combined capacity of 600,000 barrels per day (b/d) -- are still closed due to fighting between rival factions, even though the UN-sponsored dialogue for a unity government is progressing. Libya is heavily dependent on oil and gas exports; 95% of its annual budget is generated from hydrocarbons. The decline in world oil prices since mid-2014, and the likelihood that oil will remain below 70 dollars per barrel in 2015, mean that Libya will further drain its foreign exchange reserves -- or make large spending cuts. The former is the easier choice. Impacts Financing from foreign reserves has been a policy since June 2014, but it is unclear how much of it has been spent. The use of foreign exchange reserves will prevent a budget crisis in 2015. Over the medium term, fiscal health will deteriorate.

Policy shocks, current account and the macroeconomy in a developing country

2019 ◽  
Vol 46 (3) ◽  
pp. 710-726
Author(s):  
Moumita Basu ◽  
Ranjanendra Narayan Nag
Keyword(s):  
Exchange Rate ◽  
Developing Country ◽  
Foreign Exchange ◽  
Current Account ◽  
Current Account Balance ◽  
Foreign Exchange Reserves ◽  
Effective Demand ◽  
Content Type ◽  
Traded Goods ◽  
The Current Account

Purpose This is a theoretical paper in the field of international macroeconomics. The purpose of this paper is to focus on a dynamic interaction between current account imbalance and unemployment in response to some policy-induced shocks for a small open economy under a flexible exchange rate. Design/methodology/approach The paper uses a two-sector framework: one sector is traded and another is the non-traded sector that is subject to an effective demand constraint. The current account imbalance arises due to the discrepancy between production of traded goods, household consumption of traded goods and government purchases of importables. The authors keep the asset structure simple by considering only domestic currency and foreign bonds that are imperfect substitutes. The paper considers a standard methodology of dynamic adjustment process involving change in foreign exchange reserves and exchange rate under perfect foresight. The saddle path properties of the equilibrium are also examined. Findings The results of comparative static exercises depend on a set of structural features of a developing country, which include asset substitutability, wage price rigidity and sectoral asymmetries. The paper shows that expansionary monetary policy, balanced budget fiscal expansion and financial liberalization have an ambiguous effect on the current account balance, foreign exchange reserves, non-traded sector and the level of employment. Originality/value The existence of Keynesian unemployment with fixed prices is the key ingredient of this paper. The paper introduces the problem of effective demand to analyze the dynamics of current account balance and exchange rate, which, in turn, determine the sectoral composition of output and level of employment.

Hong Kong and Denmark will keep currency pegs

2015 ◽  
Keyword(s):  
Hong Kong ◽  
Exchange Rate ◽  
Foreign Exchange ◽  
Medium Term ◽  
Content Type ◽  
The Us ◽  
Exchange Rate Arrangements ◽  
Exchange Markets ◽  
Us Dollar ◽  
Currency Pegs

Subject The longevity and outlook for currency pegs. Significance The abandonment of the Swiss franc's three-year-old peg to the euro on January 15 put into question the longevity of pegged exchange rate arrangements. It also highlights how unusual such arrangements are today. Impacts The SNB will still have to continue to intervene in foreign-exchange markets to stabilise the Swiss franc. The SNB move will not cause Danish authorities to stop pegging the Danish krone to the euro. The near- and medium-term longevity of the Hong Kong dollar peg to the US dollar will not be questioned.

Impact analysis of US quantitative easing policy on emerging markets

2018 ◽  
Vol 13 (1) ◽  
pp. 185-202 ◽  
Author(s):  
Joung-Yol Lin ◽  
Munkh-Ulzii John Batmunkh ◽  
Massoud Moslehpour ◽  
Chuang-Yuang Lin ◽  
Ka-Man Lei
Keyword(s):  
Emerging Markets ◽  
Foreign Exchange ◽  
Fixed Effects ◽  
Quantitative Easing ◽  
Foreign Exchange Reserves ◽  
Data Set ◽  
Stock Market Returns ◽  
Content Type ◽  
Foreign Capital Inflows ◽  
Watson Statistic

Purpose Since the 2008 financial crisis, the USA has three times implemented quantitative easing (QE) policy. The results of the policy, however, were far below all expectations. Furthermore, it flooded emerging markets (EMs) with low-priced dollars. The purpose of this paper is to investigate the overall and individual impacts of the policy on EMs. Design/methodology/approach This study uses panel data regression model together with the fixed effects model. Also, a unit root test is conducted to check stationary properties of the data, as well as Durbin-Watson statistic to check serial correlation issues in the models. In estimating empirical models, this paper employs macroeconomic data set of stock market returns, exchange rates, lending interest rates, consumer price index, monetary aggregates and foreign exchange reserves from seven diversified emerging economies. The EMs in this study include China, Indonesia, Singapore, Hong Kong, Taiwan, Russia and Brazil. The time period undertaken in this study is from 2008 to 2012. In order to measure impacts of the different stages of the policy, the authors use dummy variables to represent each stage of the policy. Findings The results of the study show that the QE policy has significant impacts on foreign exchange reserves, foreign exchange markets and stock markets of the sample economies. Domestic credit markets, however, appear to be least influenced field by the policy. Finally, the results show that only the first stage of the policy exhibits strong significant impacts, however, leverage of the policy decreases over time. Research limitations/implications Further studies may use different samples, also variables that measure foreign capital inflows such as changes in financial accounts, foreign direct investment and foreign portfolio investment. Originality/value The present study has the following contributions on assessing the impacts of QE policy. First, the overall and individual impacts of the policy are analyzed. Second, in order to establish more valid results, the sample of this study is designed to include several EMs from three continents and diverse regions.

Ecuadorian government seeks to boost oil activity

2015 ◽  
Keyword(s):  
Primary Source ◽  
Oil Prices ◽  
World Market ◽  
Balance Of Payments ◽  
Oil Fields ◽  
Content Type ◽  
Oil Companies ◽  
Oil Sector ◽  
The Government ◽  
Total Oil

Subject The outlook for the oil sector. Significance While Ecuador is the smallest member of OPEC, oil is its largest export and the government's primary source of revenue. The collapse of world oil prices has forced the government to introduce import controls to support the balance of payments and cut public spending to reduce the budget deficit. However, rising levels of oil production have softened the blow of falling oil prices. The government hopes to continue this trend by attracting new investment into the oil sector, despite the downturn in the world market. Impacts The perilous state of the balance of payments and public finances will increase the need to attract new foreign investment into oil. Chinese oil companies are likely to increase their presence in Ecuador, reflecting trends elsewhere in Latin America. Development of the oil fields previously integrated into Yasuni/ITT should increase total oil output significantly from 2018-19.

Renminbi-IMF influence goes both ways

2015 ◽  
Keyword(s):  
Foreign Exchange ◽  
Global Market ◽  
Transformative Change ◽  
Development Bank ◽  
Foreign Exchange Reserves ◽  
Reserve Currency ◽  
Content Type ◽  
Financial Governance ◽  
China Development ◽  
Global Financial System

Significance The deeper question is whether China's accelerating integration with the global financial system will catalyse transformative change in China's state-market relationship or whether global market actors will adapt to accommodate a resilient Chinese mode of financial governance. Impacts The renminbi's use as a reserve currency will remain limited due to scepticism about further steps on the reform path. China's foreign exchange reserves will be swollen by increased appetite for outbound trade settlement in renminbi. The China Development Bank will lead China's policy banks in assuming an even greater role in the renminbi's outward push. The IMF will have less leverage to impose structural adjustments on the capital accounts of debtor countries.

China's fiscal system will adapt as economy transforms

2018 ◽  
Keyword(s):  
Local Government ◽  
Income Tax ◽  
Government Debt ◽  
Bank Loans ◽  
Personal Income Tax ◽  
Medium Term ◽  
Institutional Reforms ◽  
Content Type ◽  
Fiscal System ◽  
Green Taxes

Subject Fiscal reform in China. Significance President Xi Jinping's administration has conducted a gradual but sweeping reform of China's fiscal system. It has rationalised centre-local fiscal dynamics, strengthened fiscal regulation, cracked down on risky local government borrowing and introduced green taxes. It has granted companies significant tax cuts and has pledged even more. Impacts Debates about fairness will delay reform of personal income tax. Despite institutional reforms, consequential rebalancing of central-local fiscal relationships is unlikely in the medium term. Local government debt will grow, but in the less risky form of bonds rather than bank loans to 'financing vehicles'.

Nigeria oil bill will disappoint

2021 ◽  
Keyword(s):  
Niger Delta ◽  
Oil Fields ◽  
International Financial Institutions ◽  
Foreign Exchange Reserves ◽  
Short Term ◽  
Content Type ◽  
Macroeconomic Conditions ◽  
Underlying Causes ◽  
The Law ◽  
Petroleum Sector

Significance Discussed since 2008, the bill’s passage comes in response to worsening macroeconomic conditions. These include falling government revenues, declining foreign exchange reserves and increasing difficulties in raising loans from international financial institutions. The bill aims to address some of the underlying causes of these difficulties through wholesale reforms to the petroleum sector. Impacts The law will reduce government revenues in the short term by cutting taxes on profits. The law will encourage the development of marginal oil fields, with production expected by early 2022. Barring substantial increases in reinvestment of oil funds into host communities, insecurity will persist in the Niger Delta.

The determinants of aggregate and dis-aggregated import demand in Ghana

2019 ◽  
Vol 10 (3) ◽  
pp. 356-367
Author(s):  
Nomfundo Portia Vacu ◽  
Nicholas Odhiambo
Keyword(s):  
Foreign Exchange ◽  
Import Price ◽  
Import Demand ◽  
Foreign Exchange Reserves ◽  
Consumer Spending ◽  
Content Type ◽  
Goods And Services ◽  
Long Run ◽  
Investment Spending ◽  
Liberalisation Policy

Purpose The purpose of this paper is to examine the determinants of aggregate and dis-aggregated import demand for Ghana for the period from 1985 to 2015. Design/methodology/approach The study employed the autoregressive distributed lag bounds testing approach. Findings The long-run finding show that aggregate import demand (AIMD) is positively determined by exports of goods and services and consumer spending, but negatively determined by foreign exchange reserves. It is found that consumer spending is the key positive determinant of the import demand of consumer goods, while foreign exchange reserves, trade liberalisation policy and relative import price are negative determinants. It is found that import demand of intermediate goods is positively determined by consumer spending, government spending and investment spending. The long-run findings further confirm that import demand of capital goods is negatively determined by relative import price. In the short run, the findings suggest that AIMD is positively affected by exports of goods and services, investment spending and consumer spending, but negatively affected by foreign exchange reserves. Import demand of consumer goods is positively influenced by consumer spending, but negatively determined by relative import price. Finally, import demand for intermediate goods is found to be positively determined by investment spending and government spending, while import demand for capital goods is positively associated with exports of goods and services and trade liberalisation policy in the previous period. Originality/value A number of studies have looked at the determinants of import demand, focussing on the aggregated import demand. This study adds the component of dis-aggregated import demand, as it assist in dealing with the issues of bias.

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