IMF says expects new debt limits for poor countries in 2015

 

The International Monetary Fund said on Friday it hopes to launch a new debt limits policy next year that would give poorer countries more flexibility to spend money on development priorities without undermining debt sustainability.

The IMF sets rules for how much money poorer countries can borrow to avoid burdening them with unsustainable debt, and it revises its rules every few years.

IMF Managing Director Christine Lagarde said reforms to the Fund’s debt limits policy is one of several issues that have been delayed as “building a consensus among the membership proved more challenging than anticipated.”

Liberia’s Finance Minister Amara Konneh said on Wednesday that he was talking with the IMF about relaxing lending restrictions that have capped the amount Liberia can borrow.

Sayeh said countries like Liberia that face external shocks, like the recent outbreak of Ebola, should first focus on getting grant financing from donors, as those would not affect their debt sustainability.

The IMF only provides loans to countries, though its lending currently has a zero interest rate through the end of this year.

Bearish Trend persists as NSE ASI sheds -1.60%

The Nigerian Stock Exchnage equities market closed on a negative note on Friday, as the All Share Index depreciated by -0.32% to close at 40,444.39 basis points, compared with the -1.03% depreciation recorded previously. Its Year-to-Date (YTD) returns currently stands at -2.14%.

See Index Performance Trend on Proshare.

Market breadth closed negative with IKEJAHOTEL leading the pack of 15 gainers against 30 losers topped by AGLEVENT at the end of the session.

Market turnover closes negative as volume trended downwards by -65.23% against +70.91% uptick recorded in the previous session. IKEJAHOTEL, STERLNBANK and TRANSCORP were the most active to boost market turnover. ZENITHBANK and OANDO top market value list.

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Nigeria Faces Oil Challenge as Naira Slumps Seventh Week

Slumping oil prices may curb Nigeria’s ability to keep supporting the naira, which fell for a seventh week in the longest stretch in three years, according to Standard Chartered Plc.

The currency of Africa’s biggest oil producer weakened as much as 0.5 percent today and traded less than 0.1 percent lower at 164.62 per dollar by 3:06 p.m. in Lagos, taking the decline since Oct. 3 to 0.2 percent. Prices for Brent crude and West Texas Intermediate slid.

Since mid-September, the Central Bank of Nigeria has been selling dollars outside of its twice-weekly auctions as the country heads toward an election in February, said Samir Gadio, Standard Chartered’s chief African strategist.

Nigeria’s reserves retreated 9.5 percent this year to $39.5 billion by Oct. 2 as the central bank sold dollars to shore up the naira, which weakened 2.7 percent against the U.S. currency in 2014. President Goodluck Jonathan hasn’t said whether he would seek a second term in office in an election set for February.

Capital Market: Q3 Ends Negative On Nigerian Stock Exchange

Contrary to the bright outlook projected by analysts for 2014, the market ended the Q3 of 2014 on negative note, on the back of reduced foreign participation and weakened demand by domestic investors due to developments in the financial, political and global environments negative to growth of the market.

The impact of the hike in the cash reserve ratio (CRR) on public sector funds and the increase in capital requirement of Bureau de Change (BDC) operators from N10m to N35m and the increase in their mandatory caution fee from USD10,000 to N35m, The Street Journal gathered, impacted liquidity squeeze on the economy and affected the performance of the market negatively.

The market also suffered from the increase in political risk as indicated by the various security challenges facing the country. The insecurity in Nigeria, especially the boko haram insurgency in the northern part of the country is impacting on the market negatively as both Foreign Portfolio Investment (FPI) and Foreign Direct Investment (FDI) into the country dwindles.

Nigeria’s fiscal situation has equally not inspired confidence in investors, which is highlighted by Standard & Poor’s revision of the country’s credit outlook to ‘negative’ from ‘stable’.


However, Sell Pressure intensified today as market closed with 0.32% loss.
Trading activities on the Nigerian stock exchange decreased by 65.23% as investors bought 242.96 million shares worth N2.68 billion, in 5,169.00 deals, compared to 698.84 million shares worth N6.07 billion, in 4,833.00 deals exchanged on Thursday. Ikeja Hotel Plc, Sterling Bank Plc and Transcorp Plc were the most actively traded stocks on the exchange today in terms of volume, while Zenith Bank Plc and Oando Plc, topped in terms of value. More on The Wall Street Journal

Rwanda inflation falls to 0.2 pct in year to September

 

Rwanda's urban inflation rate was 0.2 percent in the year to September compared with 0.9 percent in the year to August, the statistics office said on Friday.



Prices rose 0.5 percent over the previous month, the National Institute of Statistics of Rwanda reported.

Rwanda focuses on the urban inflation rate for monetary policy purposes.

World Bank Calls for Emergency Fund for Disease Outbreaks

 

The World Bank Group has faulted the pace of the global response to the Ebola outbreak and called for an international fund to distribute money quickly to affected countries.

World Bank President Jim Yong Kim said Friday at a Washington gathering of global finance officials, that the institutional toolbox is empty when it comes to health emergencies.

World Bank officials are looking at several ways of structuring an emergency facility, including setting up a system that would prepackage contingent funding agreements that could be activated when a global health emergency is declared.

Mr. Kim’s remarks follow those of President Barack Obama, who in September at a United Nations gathering criticized institutions like the U.N. for not moving fast enough. The U.N.’s health agency, the World Health Organization, has seen sharp budget cuts and has faced criticism from health groups about its Ebola response.

Gazprom considers shelving Vladivostok LNG project

Gazprom says it could shelve its Vladivostok liquefied natural gas project as the Russian state-controlled energy giant focuses on supplying more gas to China by pipeline.

The project, which had been scheduled to start production in 2018 with capacity of 10m tonnes a year of LNG, would be the first major Russian energy project to be publicly scrapped since the US and Europe targeted the country’s energy industry with sanctions.

Bloomberg reports that analysts predict the plant may appear less attractive given expectations of a glut of LNG as projects in Australia and Indonesia start production and US exports of shale gas ramp up.

Western sanctions have so far not touched the Russian gas industry, with politicians fearing that Moscow could retaliate by cutting off European countries’ gas supplies.

However, Gazprom’s oil subsidiary, Gazprom Neft, is subject to US sanctions on the supply of equipment and technology for certain types of oil production as well as European financial sanctions. Like other Russian companies, Gazprom has been affected by the reluctance of western investors and banks to lend them money.

The Vladivostok LNG project is one of several LNG plants planned over the next five to 10 years that had been intended to make Russia a major player in the global LNG markets.