The International Monetary Fund announced Friday it had reached an agreement with Ukraine on economic policies that would unlock a new loan deal that will provide nearly $4 billion.
The new 14-month standby loan deal replaces an existing four-year financial aid package agreed in March 2015 and due to expire in five months, the IMF said in a statement.
The agreement must be approved by the IMF board, which will come later in the year after authorities in Kyiv approve a 2019 budget “consistent with IMF staff recommendations and an increase in household gas and heating tariffs,” a step the government had agreed on but never implemented.
But the deal also stresses the need for “continuing to protect low-income households.”
Ukraine Prime Minister Volodymyr Groysman had been seeking the additional financing from the Washington-based lender to help his crisis-hit nation.
Groysman on Friday announced a gas price increase of 23.5 percent to take effect November 1.
He said the “incredible efforts” of Ukrainian negotiators managed to reach a compromise with the IMF and reduce the initial demand to raise prices by 60 percent.
“If we are not able to continue cooperation with our international partners … this could lead to the country being put into default,” he said.
Ukraine has not received any money from the IMF since April 2017, when the fund released $1 billion for the cash-strapped country to repay loans. It had received less than $9 billion of the original $17.5 billion package.
Talks on economic reform measures that would satisfy IMF requirements and allow the release of further aid had been hung up for months, as the fund awaited the government’s approval of a budget, pension reform and an anti-corruption court.
A gas price hike is a sensitive issue for the cash-strapped country as its pro-Western leadership faces presidential and parliamentary elections in 2019.
The IMF said the new loan “will provide an anchor for the authorities’ economic policies during 2019.”
Building on progress under the previous financing package, the loan will “focus in particular on continuing with fiscal consolidation and reducing inflation, as well as reforms to strengthen tax administration, the financial sector and the energy sector,” the IMF said.
An IMF lifeline helped the country to recover from crises sparked by a Russian-backed war in the separatist industrial east that began in April 2014 and has claimed more than 10,000 lives.
The loss of industries in the war zone and flight of foreign investors saw the former Soviet republic’s economy shrink by 17 percent in 2014-2015.
The IMF now forecasts the economy will grow by 3.5 percent this year and 2.7 percent in 2019.
Following the announcement, debt rating agency Standard and Poor’s affirmed the country’s credit score at “B-” with a stable outlook.
“We expect the new arrangement will aid Ukraine’s efforts to cover sizable external debt obligations maturing next year, and also help to anchor macroeconomic policies through the 2019 presidential and parliamentary elections,” S&P said in a statement.
The IMF loan is also likely to unlock credit from other international donors, the ratings agency said.
«Ми переконані, що угода stand-by буде достатньою опорою для України, поки ми продовжуємо наші структурні реформи»
A global financial body says governments worldwide must establish rules for virtual currencies like bitcoin to stop criminals from using them to launder money or finance terrorism.
The Financial Action Task Force said Friday that from next year it will start assessing whether countries are doing enough to fight criminal use of virtual currencies.
Countries that don’t could risk being effectively put on a “gray list” by the FATF, which can scare away investors.
Marshall Billingslea, an assistant U.S. Treasury secretary who holds the FATF’s rotating leadership, said, “We’ve made clear today that every jurisdiction must establish” virtual currency rules. “It’s no longer optional.”
The FATF described how the Islamic State group and al-Qaida have used virtual currencies.
Financial regulators worldwide have struggled to deal with the rise of electronic alternatives to traditional money.
В Україні з 1 листопада 2018 року ціни на газ для населення зростуть на 23,5%, повідомив прем’єр-міністр України Володимир Гройсман. Він вказав, що ціна зросте «лише» на 23,5, а «не на 60%».
«Це те, чого нам вдалося неймовірними зусиллями досягти в результаті переговорів (з Міжнародним валютним фондом – ред.)», – сказав Гройсман на засіданні уряду ввечері 19 жовтня і додав, що субсидіями буде забезпечено всіх, хто їх потребує.
Україна у рамках співпраці з Міжнародним валютним фондом зобов’язалася перейти до ринкових цін, проте влітку та восени 2017 року відмовилася від виконання цих зобов’язань.
Питання цін на газ для населення є ключовим для відновлення фінансування з боку МВФ.
The Syrian government says the ancient city of Palmyra, gravely damaged by IS militants, could reopen to the public next spring. But, while restoration continues on the ground, one French startup is showing people how Palmyra and other cities affected by war once looked, how they look now, and how they might look after restoration. Kevin Enochs explains.
A women-to-women investment fund is coming to Britain next month to boost financing for female-owned businesses, its founder said Thursday, as efforts grow to close the gender investing gap.
SheEO has lent more than $2 million to 32 female social entrepreneurs in the United States, Canada and New Zealand to grow their businesses since 2015 in an attempt to address a global gender investment gap.
“Most of the people writing checks and investing are men,” founder Vicki Saunders told the Thomson Reuters Foundation. “SheEO wants to fund female innovators with great ideas to create stronger communities and a better world.”
Support for female entrepreneurs
It is the latest venture to support female entrepreneurs around the world, who often face more obstacles than men, including a lack of access to finance, business networks, international markets and role models.
Three out of 10 U.S. businesses are owned by women but they only receive $1 in investment for every $23 that goes to male-led businesses, the Senate Small Business and Entrepreneurship Committee found in 2014.
A Goldman Sachs-World Bank Group partnership to provide capital to women entrepreneurs in emerging markets reached $1 billion in investments in May.
How it works
SheEO brings together 500 women each year who contribute $1,100 each, which they pool and lend, interest-free, to five women-led businesses of their choice.
The loans are paid back over five years and then loaned out again, creating a perpetual fund that SheEO hopes will grow to $1 billion, with 1 million investors supporting 10,000 women-led ventures.
More than 300 women in Britain wrote to SheEO asking it to launch there, Saunders said ahead of a visit to London where she hopes that 500 female investors will come on board.
Workplace gender equality is in the spotlight in Britain, where just 6 percent of the biggest publicly listed companies are headed by women and pay disparities were revealed at major institutions last year.
Twenty One Toys founder Ilana Ben-Ari, one of the first to get SheEO funding in 2015, said it changed her business, enabling her to push ahead with production and hire staff to help with a stressful workload. Her revenue has now doubled.
“It was easy to get my foot in the door and have a meeting but it was near impossible to have a serious conversation about my business,” she said, describing her efforts to get financing from venture capitalists. “Halfway through that meeting you find out — this isn’t a meeting, this is a date.”
Computer giant IBM Corp., financial services company Western Union
Co. and European police launched a project Thursday to share financial data that they said may one day be able to predict human trafficking before it occurs.
The shared data hub will collect information on money moving around the world and compare it with known ways that traffickers move their illicit gains, highlighting red flags signaling potential trafficking, organizers said.
“We will build and aggregate that material, using IBM tools, into an understanding of hot spots and routes and trends,” said Neil Giles, a director at global anti-slavery group Stop the Traffik, which is participating in the project.
Data collection, digital tools and modern technology are the latest weapons in the fight against human trafficking, estimated to be a $150 billion-a-year global business, according to the International Labor Organization.
The U.N. has set a goal of 2030 for ending forced labor and modern slavery worldwide, with more than 40 million people estimated to be enslaved around the world.
Certain patterns and suspicious activity might trigger a block of a transaction or an investigation into possible forced labor or sex slavery, organizers said.
The project will utilize IBM’s internet cloud services as well as artificial intelligence and machine learning to compare data and to spot specific trafficking terms, said Sophia Tu, director of IBM Corporate Citizenship.
With a large volume of high-quality data, the hub one day may predict trafficking before it happens, she told the Thomson Reuters Foundation.
“You can’t do it today because we’re in the process of building out that amount of data and those capabilities, but it’s in the road map for what we want to do,” she said.
While law enforcement is teaming up with banks and data specialists to chase trafficking, experts have cautioned that it can be a cat-and-mouse game in which traffickers quickly move on to new tactics to elude capture.
Also, less than 1 percent of the estimated $1.5 trillion-plus laundered by criminals worldwide each year through the financial system is frozen or confiscated, according to the U.N. Office on Drugs and Crime.
Along with IBM and Western Union, participants include Europol, Europe’s law enforcement agency; telecommunications giant Liberty Global; and British banks Barclays and Lloyds, organizers said.
U.S. stocks fell more than 1 percent on Thursday as the European Commission issued a warning regarding Italy’s budget and concerns mounted about the possibility of strained relations between the United States and
S&P 500 technology stocks fell more than 2 percent, as did the tech-heavy Nasdaq.
Wall Street’s major indexes pared early losses in morning trading but reversed course to fall further as European markets closed. Italian bond yields jumped after the European Commission deemed the country’s 2019 budget draft to be in breach of EU rules.
U.S. stocks declined further after U.S. Treasury Secretary Steven Mnuchin pulled out of an investor conference in Saudi Arabia as the White House awaited the outcome of investigations into the disappearance of Saudi journalist Jamal Khashoggi.
“It’s a function of a lot of things coalescing into a concern,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Pittsburgh. “The market continues to struggle in the aftermath of the bigger drawdown a week ago.”
Mnuchin’s decision sparked worries of potential strain in U.S.-Saudi relations, especially if Saudi leaders were found to have been involved in Khashoggi’s disappearance. Investors raised concern that if Saudi Arabia were sanctioned, it could restrict oil supply, prompting a rise in energy prices.
Shares of military contractors such as Lockheed Martin Corp. and Raytheon Co. also fell on concerns that U.S. lawmakers may block arms deals with Saudi Arabia.
U.S. stocks had opened lower as weak earnings reports from companies such as Cessna business jet maker Textron Inc. and equipment rental company United Rentals Inc. raised concerns about the impact of tariffs, climbing borrowing costs and rising wages on corporate profits.
Textron shares fell 10.8 percent and United Rentals shares sank 14.7 percent, while Sealed Air Corp. shares slid 8.7 percent after the packaging company cut its full-year profit outlook because of higher raw material and freight costs.
Worries about rising interest rates following Wednesday’s release of the Federal Open Market Committee’s minutes from its September meeting also pressured U.S. stocks.
“The market is coming to grips with the reality that the Fed may make financial conditions a little tighter than they originally thought,” said Paul Zemsky, chief investment officer of multi-asset strategies and solutions at Voya Investment Management in New York.
The Dow Jones industrial average fell 417.17 points, or 1.62 percent, to 25,289.51; the S&P 500 lost 47.59 points, or 1.69 percent, to 2,761.62; and the Nasdaq composite dropped 168.31 points, or 2.2 percent, to 7,474.39.
Among the few bright spots was Philip Morris International Inc., which rose 3.4 percent after the Marlboro cigarette maker topped analysts’ estimates for quarterly profit and sales.
Declining issues outnumbered advancing ones on the NYSE by a
3.72-to-1 ratio; on Nasdaq, a 3.43-to-1 ratio favored decliners.
Several major Russian companies are exploring ways to do deals abroad without using dollars, spurred on by a U.S. threat to broaden sanctions that have impeded access of some Russian firms to the international banking system.
The Kremlin has been pushing companies to conduct more deals using other currencies to reduce reliance on the dollar.
Russian Alrosa, the world’s biggest producer of rough diamonds in carat terms, said it had completed a pilot deal with a Chinese client using yuan in the summer and another non-dollar transaction with an Indian client.
Other companies working on similar transactions include energy firm Surgutneftegaz, agricultural company Rusagro and miner Norilsk Nickel.
Russia’s central bank said this week the amount of non-dollar dealings was growing, with the share of rouble settlements in the Russia-China and Russia-India goods trade now between 10 and 20 percent.
The share was higher in the service industry, it added.
But there are limits to how much business can be shifted.
Major companies still rely heavily on dollar deals and most of Russia’s foreign earnings come from oil sales priced in dollars.
In addition, foreign banks with major U.S. activities may still be wary of business with any entity under U.S. sanctions even if transactions are not in dollars, bankers say.
The United States and its allies imposed sanctions on Russia in 2014 over Moscow’s annexation of Crimea. Washington said in August more measures could follow, after accusing Moscow of using a nerve agent against a former Russian agent and his daughter in Britain.
The new steps, which could be announced in November, may target dollar dealings, U.S. lawmakers have said.
One challenge facing companies dealing in the rouble is the Russian currency’s volatility. Between April 6 and 11, after Washington imposed sanctions on Russian billionaire Oleg Deripaska and some of his companies, the rouble lost almost 13 percent of its value against the dollar.
Alrosa said it avoided the fluctuation risk by completing the Chinese deal in a day. U.S. dollar deals tend to take longer due to associated compliance checks required.
“An increase in the speed of operations is an advantage in such an operation,” the company said in an emailed statement.
Alrosa did not give a value for its China and India deals but said the Chinese buyer had bought a lot at its auction of diamonds of 10.8 carats or larger in Hong Kong. Alrosa data indicates that its lots are on average worth about $100,000.
Alrosa said the banker for its Chinese deal was Shanghai office of VTB, Russia’s second-largest bank. An industry source, asking not to be named, said Russia’s biggest bank lender Sberbank worked on the Indian deal.
VTB and Sberbank declined to comment.
The Chinese client settled its purchase in yuan, which VTB converted into roubles and transferred to Alrosa.
“We carried out the transaction itself in one day, in several hours,” Alrosa said, adding that on this occasion the currency move was in the client’s favor.
No currency hedging was required because of the speed of the deal, the company said, but the client had to open an account in VTB’s branch in Shanghai to complete the transaction.
Alrosa said it was also considering settlement for future deals in Hong Kong dollars, adding that other Chinese clients had shown interest in non-dollar transactions.
But there are limits on how much of Alrosa’s business can switch to other currencies. China accounts for just 4 percent of its sales, while India accounts for 17 percent.
Among initiatives by other Russian firms, Surgutneftegaz has been pushing buyers to agree to pay for oil in euros instead of dollars, Reuters reported in September.
Russian farming conglomerate Rusagro told Reuters that some of its trading operations were in yuan and said this would increase with the expansion of business with China.
Russian nickel and palladium producer Norilsk Nickel said it was discussing the option of rouble payments with foreign customers which have rouble revenue, although it said it had not secured deals under those terms.
Even in the country that invented the internet, access has remained painfully slow for many rural residents in places like the central state of Arkansas, far from the big cities of the East and West coasts. That may be about to change.
The Federal Communications Commission — a government agency — recently auctioned off almost $1.5 billion in subsidies to get broadband providers to serve an additional 700,000 American homes over the next 10 years. Additional such auctions are planned.
For rural residents in Arkansas — ranked as one of the worst connected states in the country — it cannot come too soon.
“Remember dial-up?” That’s how Ashley Vaughan responds when she’s asked to describe her internet speed at home. She’s a resident of Pangburn, Arkansas, a town of about 600 people. After leaving the area for a few years, she returned in 2015.
”[Internet speed is] still as crappy as it ever was,” Vaughan said. “I was trying to watch Hulu [a streaming network], and my husband was trying to load a webpage at the same time, and neither of them worked.”
The issue of poor broadband access — defined by the FCC as fewer than 25 megabits per second (Mbps) — is not uncommon. Almost 20 percent of the American population, or 60 million people, live in rural areas, which generally experience the least connectivity in the country.
Of those, around 15 million Americans have access to less than 10 Mbps.
In Vaughan’s case, she says her internet speed is only 0.05 Mbps. She’s called her internet provider to complain, but was told her service was the best available where she lives.
To get around the problem, many communities have sidestepped big companies and created municipal networks. Individually, some people spend extra on portable broadband access for their phones.
That slow speed doesn’t just mean fewer shows watched or video games played. It also impacts Vaughan’s son’s schoolwork, which increasingly requires use of a computer. Vaughan describes an instance in which her son took hours to download a single textbook, preventing anyone else in the house from using the internet during that time.
Many households in the U.S. have been wired for DSL, or digital subscriber lines, permitting the transmission of high-speed internet data over telephone lines. Meanwhile, most suburban and urban areas have seen the installation of fiber and copper cables, providing faster service. But many rural areas have been left behind.
“Fiber lines are expensive to install, and older copper lines are expensive to maintain,” said Jameson Zimmer, a broadband analyst with BroadbandNow, a data aggregation company based in Los Angeles.
On average, Zimmer says, it can cost tens of thousands of dollars to run fiber lines, depending on the complexity of the terrain and the length of the line. This means there are fewer internet providers willing to take on that financial burden — giving consumers fewer options.
“What to do about this is overwhelming,” Zimmer said.
It’s a problem that both Republican and Democratic party leaders are working to solve.
U.S. Senator John Boozman of Arkansas has been one of the leaders in the push for legislation broadening access to high-speed internet.
In an email to Voice of America, Boozman wrote that investing in affordable, high-speed internet would strengthen the American economy. He applauded President Donald Trump for signing an executive order earlier this year to expand broadband access into rural areas but said the issue needs attention from “all levels of government.”
“There is a sense of urgency in the need to close the rural broadband gap. Today, reliable connectivity is just as essential as traditional infrastructure like roads and bridges,” Boozman wrote. “I’ve seen students sitting in the back of pickup trucks outside of schools in order to access the internet to complete their homework.”
Alisha Summerville feels that urgency. She’s a co-owner of the online store ASK Apparel, which launched last year and is based in Pangburn. Even though she relies on her smartphone to do most of her work, the store earns $10,000 to $15,000 a month from online purchases and sells to customers in 18 states.
The store earns an additional $5,000 to $10,000 through a brick-and-mortar store in the neighboring town of Heber Springs, but Summerville says the company was set up to serve online shoppers and it encourages foot traffic to become online traffic.
“That’s where business is going,” Summerville said of internet sales.
Summerville says she takes her internet connection into consideration every single time she makes a decision — from marketing and design to the equipment she uses. Having better broadband access at home would mean she could accomplish a lot more.
“When your internet is down, so is your business,” Summerville said. “When I’m thinking about internet, and I’m thinking about sales, I’m thinking about how much further we could reach.”
In the late 1960s, while fledgling new retailers Walmart, Kohl’s, Kmart and Target were hard at work establishing a foothold in the hearts, minds and wallets of the American consumer, the nation’s dominant retailer was busy building the world’s tallest building.
In pouring its funds and focus into Chicago’s Sears Tower, America’s original super-store may have unwittingly become the architect of its own long, slow and painful demise.
“Walmart, the strongest of all those four, wasn’t anywhere near where Sears was for a couple of decades,” says James Schrager, professor of entrepreneurship and strategy at the University of Chicago’s Booth School of Business. “So, if Sears was on top of things, even in the early 80s, they could have been Target or a better version of Kmart, they could have been any of that. But they sat on their hands and built their tower in 1969 instead.”
It’s been a precipitous fall for the one-time retail powerhouse, which this week filed for bankruptcy after years of losses.
Established 123 years ago, Sears was literally the place where America shopped, as its tagline boasted.
Sears had everything from clothing and toys, to tools and appliances. It even sold housing kits. Thousands of Sears homes still stand across America today. For decades, American families eagerly awaited the delivery of the retailer’s several-inches thick mail order catalogues.
The secret to Sears’ success was being able to stay ahead of the market, according to Schrager.
From small stores in small towns, to big stores in downtowns in the 1920s; to a thriving catalogue business for smaller outposts, the main way America shopped right through to the 1950s and 60s; and then the switch to anchor stores in shopping malls through the late 1970s, Sears was always on the move, changing with the times.
But then the retailer seemed to stop evolving.
While the Walmarts and Targets of the world recognized the value of moving away from shopping centers and opening massive spaces in strip malls where customers could park right in front of the store, Sears stayed at the mall.
The competition also developed individual identities and expertise. Target became known for its upscale, fashion-oriented approach, Walmart for superior logistics in smaller towns, and Kohl’s had fashion-only soft goods, says Schrager.
Meanwhile, Sears seemed to lose its focus.
“Sears slowly lost track of its retail business by being fascinated with other things,” Schrager says. “In 1969, they began to build the tallest building in the world, that took a lot of time away from the business. They bought a stock brokerage company, which they had no business doing. They bought a real estate company, which they had no business doing. They developed a wonderful credit card called Discover, which has nothing to do with retailing.”
And along the way, the type of people at the top, the people making the business decisions, changed.
“Merchants are the lifeline of the business and Sears allowed them to wither,” Schrager says. “How do we know that? Because, after a while, Sears wasn’t getting a merchant to run the business. They were getting a financier or a marketer or someone other than a dirty-fingernails merchant who spent their life trying to beat the merchant down the street.”
Edward Lampert, Sears’ most recent CEO and majority shareholder, is a hedge fund billionaire. He took over in 2013 and expressed hopes of turning the company around.
Although Sears just filed for bankruptcy protection this week, Schrager believes the final death blow for the retailer occurred back in the early 1990s.
That’s when previous company executives decided to sell off the profitable parts of the business, while keeping the failing stores. In 1993, Sears shed the Discover credit card, its real estate company Coldwell Banker, and its Dean Witter Reynolds stock brokerage. Allstate, its insurance company, followed in 1995.
“There’s nothing left. Retail walks by you,” Schrager says. “You can’t stand still, and Sears has been standing still since 1969. That’s a very long time. The world has evolved two of three times since then…it’s over.”
While one-time competitors like Walmart, Target and Kohl’s continue to change and thrive, Kmart, which is now operated by Sears Holdings, is also in financial trouble because, Schrager says, it too failed to change with the times.
As for the one-time king of the pack, the next time consumers get excited about buying something at Sears could be when the bankruptcy court rules that the place where America once shopped must itself now be broken apart and sold off for the best possible price.
The Trump administration has again declined to label China a currency manipulator, but says it is keeping China and five other nations on a watch list.
“Of particular concern are China’s lack of currency transparency and the recent weakness in its currency,” U.S. Treasury Secretary Steven Mnuchin said in his biannual report to Congress.
“Those pose major challenges to achieving fairer and more balanced trade and we will continue to monitor and review China’s currency practices, including thorough ongoing discussions with the People’s Bank of China,” he said.
Mnuchin said China — along with Germany, India, Japan, South Korea and Switzerland — would be placed on a list of countries whose currency practices require what the report calls “close attention.”
Governments manipulate currency by keeping the exchange rates artificially low to make its goods and services cheaper on the world market.
But that puts trading partners and others at a disadvantage. President Donald Trump promised throughout the campaign to label China a currency manipulator once he got into office, but so far he has declined to do so.
Instead, Trump has imposed tariffs on billions of dollars’ worth of Chinese imports to address what he says are unfair trade practices and the trade deficit.
The International Monetary Fund announced Friday it had reached an agreement with Ukraine on economic policies that would unlock a new loan deal that will provide nearly $4 billion. The new 14-month standby loan deal replaces an existing four-year financial aid package agreed in March 2015 and due to expire…
«Ми переконані, що угода stand-by буде достатньою опорою для України, поки ми продовжуємо наші структурні реформи» …
Про це йдеться у заяві Міжнародного валютного фонду …