| Uganda shilling firms against US dollar
THE shilling firmed against the dollar during the week in the trading that was characterised by fluctuations, dealers said on Thursday.
The local unit closed trading on Thursday at 1,730/1,735 to the dollar compared to 1,735/1,740 rate quoted the previous week.
Markets were closed on Friday and Monday to observe the Easter holiday.
Traders said the shilling had oscillated against the greenback during the week initially softening to 1,740 levels on Tuesday but strengthening to 1,730 levels on Wednesday.
This was on the account of substantial inflows from offshore players investing in the local Treasury bill market.
Catherine Kijjaggulwi, the money market dealer at the Barclays Bank, said the local unit stabilised on Thursday in quiet trade in which supply and demand were evenly matched.
China markets react calmly to bank reserve hike
SHANGHAI: Chinas short-term money rates and the yuan edged higher while equities inched lower on Friday, with Chinese markets reacting calmly as analysts and dealers had expected to the latest hike in bank reserve requirements.
Thursdays late announcement of a 0.5 percentage point reserve ratio increase, to take effect on April 16, came several weeks earlier than many in the markets had anticipated but was by no means a big surprise.
Its earlier than expected, but its still a continuation of the central banks stated monetary policy, said senior analyst Fang Ming at Bank of China in a research report on Friday.
The central banks impatience implies that Chinas March trade surplus, credit, investment and consumer price data might all remain at high levels, Fang said, adding that inflation could be near 3 percent, up from 2.4 percent in the first two months of the year.
Experts say inflation is causing fiat currency disappearance from ...
According to Algeria bank estimations, money circulating in the Algerian market exceeds 960 billion dinars 10% of which are small size currency.
Contrary to the rest of the world namely the EU and the USA small size currency deals in Algeria are not common, and hardly exist.
Stockholm stock exchange analyst Mr. Nourredine Legheliel told El Khabar that the phenomenon of small size currency disappearance has appeared in countries like Italy when shifting from the Italian Lira to Euro and it is generally seen as inflation sign.
Despite small size currency represents 2% of money circulating in the world; it remains put in circulation in the greatest economies but not in Algeria.
The disappearance of fiat currency and cents absence in the market is owed according to experts to inflation rates rise which is detrimental on prices and purchasing power as well.
The theory of the Balance of Payments
The Balance of Payments (BOP) is a method countries use to measure the flow of money into and out of their economies over a specific period of time, usually quarterly and yearly. The BOP summarizes the total international trade activities of the private and public sectors by monitoring the payments and liabilities to foreigners (debits) and receipts and obligations from foreigners (credits). If a country's debits are greater than its credits over the given period, then it can be said to be running a deficit, that is, money is tending to flow out of the economy. Conversely, if the country's credits are greater than its debits, then the country can be said to be running a surplus, where money is tending to enter the economy. In the simplest of senses, the balance of payments is divided into two accounts - the current account and the capital account.
Rupee’s upward run could end soon
Going forward, RBI is likely to step in to keep rupees appreciation in check. With the kind of relative appreciation witnessed by the rupee and with inflation running at two-year high, the overvaluation of the Indian unit in real terms is running above 7%. At the same time the rupee-dollar pair has seen heightened volatility in recent weeks. These two conditions are likely to keep the RBI vigilant. The central bank could, however, time its intervention to coincide with a period in which the banking system is likely to witness acute tightness in liquidity again and/ or when large capital inflows are expected. For instance, liquidity could tighten in the period after the first phase of the cash reserve ratio hike by 25 bps comes into effect from April 14. This week, RBI could still remain on the sidelines.
China's Trade Surplus Probably Doubled in March to $20 Billion
April 9 (Bloomberg) -- China's trade surplus probably almost doubled in March, adding to friction that may prompt the U.S. to file a World Trade Organization complaint as early as this week. The gap swelled to $20 billion from $11.2 billion a year earlier, according to the median estimate of 18 economists surveyed by Bloomberg News. The figures may be released as early as today. U.S. lawmakers charge that China keeps its currency undervalued, protects piracy and subsidizes products sold overseas. The Commerce Department last month levied duties on coated paper imports from China and the government may file a WTO complaint over what it calls piracy of copyrighted movies and books, according to four people briefed by the Bush administration. This ``raises the specter of a future escalation of protectionist sentiment and action,'' said Paul Sheard, global chief economist at Lehman Brothers Holdings Inc.
'Market on self adjustment mode'
"Global markets including India are on a self adjustment mode and this period is likely to end in different stages across the world. Thus, volatility will be trademark of the markets in the medium term. Liquidity in India will increase post June 2007. The fourth quarter earnings (to be released from this week) will be in-line with market expectations. The impact of factors like hike in interest rates, inflation, rupee appreciation will reflect subsequently in the first quarter performance. Volume growth is high. So, even though margins will be impacted, the net profits will remain high. However, the situation will differ from company to company depending the fundamental strength in each case. Several triggers will affect the bourses in the near term. On the international front, Yen carry trade and US Federal Reserve's rate announcement will be closely watched.
Kiwi could hit US80c, warns Key
National Party leader John Key has warned that the exchange rate crisis for exporters will get worse before it gets better. Speaking to investment traders and private investors at a breakfast hosted by Wellington broking firm OMF, Mr Key said the Kiwi dollar was likely to go as high as US80c in the near future. Even the present level of about US72c has created major difficulties for exporters. "It doesn't show any sign that it wants to go down," said Mr Key, a former head of foreign exchange trading for international broking giant Merrill Lynch. Predictions of a drop in the exchange rate had lulled exporters into a false sense of security and many had not planned ahead. "Exporters are now scrambling to cover themselves." But something had to give, because the economy could not operate for long above a US70c exchange rate, he said.
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