Nigeria forex restrictions are unsustainable

2021 ◽  
Keyword(s):  
Exchange Rate ◽  
Commercial Banks ◽  
Foreign Currency ◽  
Domestic Demand ◽  
Short Term ◽  
Content Type ◽  
Goods And Services ◽  
Special Drawing ◽  
Special Drawing Rights ◽  
The Cost

Significance Instead it ordered that all foreign exchange purchases should occur through commercial banks. This move aims to stabilise the value of the naira by reducing effective domestic demand for foreign currency. Impacts The CBN may allow commercial banks to provide forex to retail dealers as an alternative policy. The cost of imported goods and services will increase. A USD3.35bn IMF special drawing rights (SDR) allocation will bolster Nigeria’s short-term reserve position. Full exchange rate unification will not occur under President Muhammadu Buhari’s administration.

Banking on foreign currency accounts: evidence from Malaysia

2018 ◽  
Vol 36 (7) ◽  
pp. 1235-1247
Author(s):  
Hway Boon Ong
Keyword(s):  
Exchange Rate ◽  
Least Squares ◽  
Foreign Exchange ◽  
Portfolio Choice ◽  
Commercial Banks ◽  
Foreign Currency ◽  
Exchange Rate Volatility ◽  
Ordinary Least Squares ◽  
Expected Return ◽  
Content Type

Purpose The purpose of this paper is to study how the foreign currency account (FCA) is affected by the domestic fixed deposit (FD) rate, the FCA rate, the expected exchange rate and exchange rate risk. Design/methodology/approach This paper analyses the causal relationship between the domestic FD rate, the FCA rate, the expected exchange rate on a set of foreign currency deposits and exchange rate volatility, based on the theory of portfolio choice. Based on the theory, the panel vector autoregressive regression of fully modified ordinary least squares and dynamic ordinary least squares are modelled. Findings There is no cointegrating relationship for the three-month FCA deposits, the domestic FD rate, the FCA rate and the expected exchange rate. Only the six-month FCA business deposits are affected by the domestic FD rate, the FCA rate and the expected exchange rate. The FCA depositors are not affected by exchange rate volatility. Research limitations/implications This study is conducted based on the FCA rate quoted by the leading commercial banks in Malaysia, Maybank. Thus, the FCA rate is used as a proxy for the FCA rate of commercial banks in Malaysia. Originality/value Individual depositors have to save in more than the three-month FCA to realise their expected return. For individuals, the FCA deposit is not an alternative choice to domestic FD. Exporters may use the FCA deposit to finance their foreign purchases to save the cost of foreign exchange conversion but it is still not an appropriate hedging tool against foreign exchange fluctuations as compared to the existing forward foreign exchange facility.

Nigeria Eurobonds will ease short-term budget pressure

2021 ◽  
Keyword(s):  
Exchange Rates ◽  
Foreign Exchange ◽  
Foreign Exchange Reserves ◽  
Foreign Reserves ◽  
Short Term ◽  
Content Type ◽  
National Assembly ◽  
Special Drawing ◽  
Special Drawing Rights ◽  
External Borrowing

Significance This comes a month after the National Assembly approved an external borrowing plan of USD6.2bn in August. Also, the IMF has approved the allocation of USD3.35bn in Special Drawing Rights (SDRs) to boost Nigeria’s foreign reserves. Combined, these have provided a modest boost to Nigeria’s faltering foreign-exchange reserves. Impacts The proceeds from the Eurobonds sale will form a significant part of funding the 2022 budget. The Eurobonds and SDR allocation, by boosting reserves, could help narrow the gap between formal and informal exchange rates. There will likely be another Eurobond sale in 2022 as well as more multilateral and bilateral loans. Nigeria’s weak tax collection infrastructure will not generate substantially improved revenues from expected growth.

Nigerian central bank faces short-term debt hazards

2019 ◽  
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Interest Rates ◽  
Foreign Currency ◽  
Capital Controls ◽  
Financial Inclusion ◽  
Medium Term ◽  
Short Term ◽  
Content Type ◽  
Double Digit

Significance Emefiele has vowed that the CBN will significantly increase financial inclusion, recapitalise banks and help the economy achieve double-digit growth over his second term. However, the significant amount of CBN bills in circulation, a key but costly component of the Bank’s recent exchange rate strategy, poses serious medium-term risks. Impacts The CBN's continued focus on exchange rate stability leaves limited space for reducing interest rates over the short term. Effective foreign currency yields of over 10% are appealing for portfolio investors, but a sudden naira slide would prompt major losses. Significant divestment by foreign portfolio investors may make the CBN resort to temporary capital controls to limit damage to the naira.

A new index to measure cost of living for expatriates in cities

2018 ◽  
Vol 28 (3) ◽  
pp. 295-317
Author(s):  
Khee Giap Tan ◽  
Nguyen Trieu Duong Luu ◽  
Le Phuong Anh Nguyen
Keyword(s):  
New York ◽  
Hong Kong ◽  
Quality Data ◽  
Cost Of Living ◽  
Content Type ◽  
Goods And Services ◽  
Commercial Research ◽  
The Cost ◽  
Cost Of Living Index ◽  
The City

Purpose Cost of living is an important consideration for the decision-making of expatriates and investment decisions of businesses. As competition between cities for talent and capital becomes global instead of national, the need for timely and internationally comparable information on global cities’ cost of living increases. While commercial research houses frequently publish cost of living surveys, these reports can be lacking in terms of scientific rigour. In this context, this paper aims to contribute to the literature by formulating a comprehensive and rigorous methodology to compare the cost of living for expatriates in 103 world’s major cities. Design/methodology/approach A cost of living index for expatriates composed of the ten consumption categories is constructed. The results from the study covers a study period from 2005 to 2014 in 103 cities. More than 280 individual prices of 165 goods and services have been compiled for each city in the calculation of the cost of living index for expatriates. New York has been chosen as the base city for the study, with other cities being benchmarked against it. A larger cost of living index for expatriates implies that the city is more expensive for expatriates to live in and vice versa. Findings While the authors generate the cost of living rankings for expatriates for 103 cities worldwide, in this paper, the authors focus on five key cities, namely, London, Hong Kong, Singapore, Tokyo and Zurich, as they are global financial centres. In 2013, the latest year for which data are available, Zurich was the most expensive for expatriates among the five cities, followed by Singapore, Tokyo, London and Hong Kong. These results pertain to the cost of living for expatriates, and cities compare very differently in terms of cost of living for ordinary residents, as ordinary residents follow different consumption patterns from expatriates. Originality/value Cost of living in the destination city is a major consideration for professionals who look to relocate, and organisations factor such calculations in their decisions to post employees overseas and design commensurate compensation packages. This paper develops a comprehensive and rigorous methodology for measuring and comparing cost of living for expatriates around the world. The value-addition lies in the fact that the authors are able to differentiate between expatriates and ordinary residents, which has not been done in the existing literature. They use higher quality data and generate an index that is not sensitive to the choice of base city.

Cost, revenue and profit efficiency analysis of Indian scheduled commercial banks

2017 ◽  
Vol 59 (3) ◽  
pp. 442-462 ◽  
Author(s):  
Megha Mahendru ◽  
Aparna Bhatia
Keyword(s):  
Public Sector ◽  
Commercial Banks ◽  
Empirical Work ◽  
Specific Reference ◽  
Profit Efficiency ◽  
Content Type ◽  
Output Synchronization ◽  
Efficiency Performance ◽  
Private And Public ◽  
The Cost

Purpose This paper aims to analyze the cost, revenue and profit efficiency performance of Indian scheduled commercial banks. The study also determines differences if any related to efficiency among banks on the basis of ownership pattern. Design/methodology/approach Cost, revenue and profit efficiency of banks is calculated by using the non-parametric approach, namely, data envelopment analysis. Further, the differences in the efficiency scores are examined by applying analysis of variance. Findings Indian scheduled commercial banks have not been able to maintain their input-output synchronization in terms of cost, revenue and profits in the year 2012-2013. Foreign sector banks have higher cost and profit efficiency as compared to their counterparts in private and public sector, whereas public sector banks are found to have been more revenue efficient. Originality/value With specific reference to India, less empirical work has been carried out with respect to cost, revenue and profit efficiency. None of the studies have evaluated the sector-wise performance of banks in terms of all three efficiency parameters.

Tensions to rise on Haiti-Dominican Republic border

2021 ◽  
Keyword(s):  
Dominican Republic ◽  
Black Market ◽  
Border Security ◽  
Irrigation Canal ◽  
Undocumented Migration ◽  
Short Term ◽  
Content Type ◽  
Cross Border ◽  
The Cost ◽  
Term Labour

Significance One is the Dominican Republic’s controversial plan to build a border ‘wall’, to halt undocumented migration. Another is the Haitian authorities’ recent construction of an irrigation canal just within the Haitian side of the border. Protests and border clashes are likely to intensify over the coming months. Impacts Increased border security will drive up demand for, and the cost of, cross-border smuggling, worsening insecurity. Effective border policing may foster short-term labour shortages in the Dominican Republic. Demands for vaccination evidence before crossing the border will probably prompt a surge in black-market vaccination certificates.

Sri Lanka will try to manage debt without IMF help

2021 ◽  
Keyword(s):  
Sri Lanka ◽  
Foreign Exchange ◽  
Debt Crisis ◽  
Content Type ◽  
Special Drawing ◽  
External Stakeholders ◽  
Capital Outflows ◽  
The Government ◽  
Special Drawing Rights ◽  
India And China

Significance The government nevertheless remains under pressure from domestic critics and external stakeholders because of dwindling foreign exchange (forex) reserves and a growing debt crisis. Sri Lanka approached the IMF in early 2020 for macroeconomic support under the Fund’s Rapid Financing Instrument, but negotiations were shelved. Impacts The government will face increasing domestic pushback over its efforts to curb capital outflows. Although India and China will remain Sri Lanka’s most important partners, ties with Bangladesh will grow markedly. Sri Lanka should be able to access an allocation of IMF special drawing rights later this month.

US corporate tax reform would risk highway fund

2015 ◽  
Keyword(s):  
House Of Representatives ◽  
Tax Reform ◽  
Fuel Efficiency ◽  
Corporate Tax ◽  
Short Term ◽  
Content Type ◽  
Long Duration ◽  
Corporate Tax Reform ◽  
The Cost

Significance On July 15, the House of Representatives passed a short-term funding measure, against the wishes of many in the Senate. US infrastructure is facing a fiscal crunch. Taxes on gasoline have traditionally supported highway appropriations. However, eroding purchasing power and greater fuel efficiency means that about 30% of highway funding must be found from other sources, difficult in the current Congress. The present round of appropriations expires on July 31. Impacts A corporate tax might provide a long-term resolution, but the pursuit of it would come at the cost of seeking more modest solutions. These would provide stability for a year or two, necessary for projects of long duration. If corporate tax reform is not completed before the end of 2015, it will probably not get done in a presidential election year. If Congress were to rely on the prospect of these taxes for the HTF, it might find itself in a similar position in a few months.

Russian regions will benefit unevenly from recovery

2017 ◽  
Keyword(s):  
Exchange Rate ◽  
Presidential Election ◽  
Government Spending ◽  
Foreign Currency ◽  
Living Standards ◽  
Capital Inflows ◽  
Social Spending ◽  
Russian Regions ◽  
Official Statistics ◽  
Content Type

Subject Modest outlook for consumption in Russia Significance Data from the official statistics agency Rosstat suggest that the recession that began in late 2014 is coming to an end, but no one is predicting a spurt in growth. Consumers have been harder hit than during the 2008-09 recession, and falling real incomes have depressed retail sales. While the economy is improving overall, the picture varies widely by geography. Impacts Government spending plans indicate that welfare will be shielded from cuts affecting other areas. Social spending is important to stability ahead of the 2018 presidential election. A relaxation of Western sanctions may boost living standards if it leads to increased capital inflows. However, finance ministry plans to buy foreign currency to preserve exchange rate competitiveness may limit these gains.

Russian banks will need tight control and pruning

2016 ◽  
Keyword(s):  
Banking Sector ◽  
Foreign Currency ◽  
Banking System ◽  
Tight Control ◽  
Content Type ◽  
Perceptions Of Risk ◽  
Banking Sector Development ◽  
Foreign Loans ◽  
The Cost ◽  
Systemically Important Banks

Subject Measures to keep Russia's banking system sustainable. Significance In 2015, the majority of Russian banks recorded operating losses, with the exception of Sberbank. Banks had to repay foreign currency-denominated loans whose cost rose as the ruble fell in value. Access to further foreign loans was severely constrained by Western sanctions, the cost of domestic borrowing was high and consumers' real incomes declined. The Central Bank of Russia (CBR) continues to support the sector by offering refinancing facilities and capital support for systemically important banks while shutting down banks engaged in high-risk activity. Impacts Western sanctions continuing into 2017 will worsen investor perceptions of risk. CBR intervention will avoid a collapse in depositor confidence. Geopolitical isolation will limit banking sector development.

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