|
Emerging Markets |
|
|
Other Forums: What's New Bond Discussions Newslink |
|
|
Posted by
BradyNet
(
Friday, July 9, '04
)
| ||||||||||||||||||||||||||||
|
so we get 2.5 Argies for one DR ??
funny !!!!!!!!!!
Not so with central banks and finance officials. Occasionally, one or two won't be able to show his or her face in public if he devalues, but on the whole, they get away with it. They are largely nameless, faceless and unaccountable, often beholden to dodgy finance officials and even free spending congressmen. The blame gets very muddled at their level. The best an angry ripped off voter can do is vote the president who appointed these miscreants out of office, or get rid of the IMF that told them to devalue, but frequently that doesn't solve the problem. Whether it is by taxes or devaluation, anyone who impoverishes others needs to be held accountable by name. That is why the highly political decision to dollarize often works. It forces politicians to be honest about taxation and not try the sneaky back door of devaluation whenever they want to spend more than they earn.
But my point is: it is all too easy to talk of 'strong reforms' without specifics. Dollarization is not only a STRONG reform, it is a real one. It really would make a difference because it would end forever the government's printing press propensity and with it, its urge to hire bureaucrats. It would only be able to hire bureaucrats it could sustain with a tax base that brought in real dollars. That, in itself, limits the number of bureaucrats it can hire. Dollarization forces countries to live within their means. Corrupt governments cannot cheat on it even if they try.
Ruble Has Biggest Drop in Month on Concern About Russia's Banks
July 8 (Bloomberg) -- The ruble fell the most against the dollar in a month after Moody's Investors Service said it may reduce the credit ratings of 18 Russian lenders and the central bank cut reserve requirements to shore up the banking industry.
Demand for the ruble has waned since Tuesday when Moscow- based Guta Bank halted withdrawals. Moody's announcement of its review yesterday came within hours of the central bank halving reserve requirements. Bonds of Alfa Bank and MDM Bank fell.
``Next week, quite a big additional mass of rubles will come to the market,'' said Alexander Karpov, head of foreign exchange and money markets at Bank Zenit in Moscow. ``Nobody expected they'd cut reserve requirements that much.''
Against the dollar, the ruble fell to 29.1075 by 4:45 p.m., when trading closed on Moscow's Interbank Currency Exchange, from 29.075 yesterday, a drop of 0.1 percent. The currency, which weakened 2 percent last quarter, fell as low as 29.145 earlier, trading near the lowest since Jan. 6. The Micex stock index declined 0.4 percent.
Some investors also sold the ruble as OAO Yukos Oil Co., Russia's largest oil producer, struggles to resolve a tax dispute with the government that may bankrupt the company, said Peter Redward, head of emerging-markets currency research at Deutsche Bank AG in London.
``This is short-term weakness in the ruble related to the ongoing saga at Yukos and also concerns surrounding Guta bank and the possibility of spillover to other banks,'' said Redward. ``We remain positive on the ruble.'' Moody's today affirmed Russia's sovereign credit rating Baa3.
`People Are Nervous'
Alfa Bank, Rosbank and MDM Bank, three of the country's four largest privately owned banks are among the 18 lenders that may have their long-term foreign-currency ratings lowered by Moody's, the ratings company said in an e-mailed statement.
``People are nervous,'' said Igor Vasiliev, director of financial markets operations at Alfa. ``The population is buying dollars and ruble liquidity is rising.''
Alfa Bank raised cash reserves by ``hundreds of millions of dollars'' in the past month, Deputy Chief Executive Oleg Tumanov said in a telephone interview in Moscow yesterday. The bank isn't having financial problems, it said yesterday.
Tumanov said in an interview today that Alfa Bank ``has seen an outflow because of nervousness. People are ``scared to death'' because they haven't forgotten previous crises, he said. Central Bank Chairman Sergei Ignatiev told reporter's yesterday Russia isn't having a banking crisis.
The central bank's decision to cut reserve requirements will increase the supply of rubles, reducing the price, said Riccardo Barbieri, chief emerging-markets economist at Morgan Stanley.
``If there is a significant liquidity injection, the currency can weaken somewhat,'' said Barbieri, who is based in London. The ruble's decline can also be attributed ``to a net flow to the dollar as people get more concerned about the situation.''
Oil Prices
Russia's currency has appreciated 1.2 percent against the dollar so far this year, after surging 9 percent last year, as the price of oil, which together with gas accounts for more than half the nation's export revenue, climbed. Crude oil futures have gained 39 percent so far this year on the New York Mercantile Exchange.
``People have decided to buy dollars because of instability,'' said Alexei Vorobyov, a currency dealer at Bank Vozrozhdeniye in Moscow. ``We would see much a bigger move if it was a different situation with oil prices.''
Crude oil futures rose more than 1 percent on concern about possible supply disruptions from Yukos. Bailiffs yesterday began work to enforce the tax bill against Yukos, whose first-quarter output was more than Libya, the eighth-largest producer in the Organization of Petroleum Exporting Countries.
`Largely Controlled'
Russia's central bank has been managing the ruble's exchange rate by buying and selling the currency since the nation's 1998 Treasury debt default and currency devaluation. The central bank bought an average of $1.6 billion per month in the second quarter, said Ralph Sueppel, a currency strategist at Merrill Lynch & Co. in London and a former European Central Bank official.
``The exchange rate is still largely controlled,'' Sueppel said. ``It is more plausible that it reflects additional liquidity rather than concern about the financial system,'' he said of today's slide in the ruble.
He said the measure would free up 120 billion rubles ($4.1 billion) in additional cash for local banks. Russia's foreign currency and gold reserves rose $400 million to $88.3 billion, a record, in a week to July 2, the central bank said.
if anybody wants mp's attention... this is the right way to do it. :-)
<07-08-04 Anonymous: Nestor Kirchner e' una persona malata, basta vedere i suoi occhi a palla fuori dalle orbite che denunciano una seria carenza ormonale. Le sue reazioni da donnetta isterica a qualunque critica, denotano tambien che la seria infermita' lo ha reso pericolosamente ottuso. Che si aspetta a sostituirlo?>
DR badly needs external help. Without it is difficult for DR to get out of the current situation, if not impossible, even with a change of governent. The fiscal reform IMF is proposing may be of very limited help. The US ambassaor in DR is very much fixated on corruption(He is not a priest but a successful businessman):
< US ambassador guarantees support July 5 04 United States Ambassador Hans Hertell, speaking at the Fourth of July celebrations at the US Embassy in Santo Domingo, said that the United States will always be there for the Dominican Republic in its struggle to obtain a working democracy. Hertell pointed out that corruption is one of the great barriers to an effective democracy. As reported in Hoy, Ambassador Hertell told his audience that when there is corruption it is much more difficult for elected leaders to demand sacrifices from the people when they are really needed >
If US help is conditioned with strong reforms, DR could be on the road to progress. But Taylor should not be coming just to pressure DR into dollarization and simply passing the IMF's fiscal reforms, which alone probably would not solve the ills of DR. My guess is that dollarization will come to DR in due course—as most of the business persons and also many economists apparently want it.
Dec 2002.
monetization is just a good intention(first reading passed) let's see how the road is paved and where it goes...
The company has eluded bankruptcy through a recent agreement with a bondholders committe represented by Fintech in the following terms:
http://www.bmv.com.mx/BMV/JSP/quote...
The bond that is being restructured had an original maturity of 2002 and was restructured in early 2002 into a 2009 bond that subsequently defaulted in December 2004.
The company has a profitable business and an unprofitable one. The unprofitable has partly been sold and the remining is being shut down.
Primo, a pity in Russia many people usually end up worse after reforms than without them :((( It is not a question whether such reform is needed but how to do it the efficient way, what I am afraid it will be done the old famous Russian way … first we demolish everything, later we sit and cry about demolished things… is not this the way?
The rulers think that cleansing a few banks is like puttin Khodor in jail.. But it is not.
Amigo - monetization of social benefits in its present draft gives person a choice to have all benefits as it is or get money instead of free fare or free prescribed medicines. Some payments or benefits, however, should become the responsibility of regional authorities or private insurance cos. Elderly people do not understand what is all about and don’t trust anybody, government PR is awful, those who are looking for the weak points in ru are capering with joy. That is it.
Please read our disclaimer.
Home Page |
BradyNet Pro |
Search |
CyberExchange
General Correspondence: bradynet@bradynet.com
Questions/Problems? support@bradynet.com
This site copyright © 1995-2000 BradyNet.com
Forfaiting |
Closing Prices |
Live Prices |
New Issues |
Ratings
BradyNet Tour |
BradyNet FORUMs |
BradyNet Email Directory |
Index (Site Map)
Analysis & Research |
BradyNet Center |
News |
Jobs
