Uncertainty reigned in Venezuela Saturday after President Nicolas Maduro unveiled a major economic reform plan aimed at halting the spiraling hyperinflation that has thrown the oil-rich, cash-poor South American country into chaos.

Ahead of a major currency overhaul Monday, when Caracas will start issuing new banknotes after slashing five zeroes off the crippled bolivar, Maduro detailed other measures he hopes will pull Venezuela out of crisis.

Those measures include a massive minimum wage hike, the fifth so far this year.

But analysts say the radical overhaul could only serve to make matters worse.

“There will be a lot of confusion in the next few days, for consumers and the private sector,” said the director of the Ecoanalitica consultancy, Asdrubal Oliveros. “It’s a chaotic scenario.”

​‘Pure lie’

The embattled Maduro, a former bus driver and union leader, said the country needed to show “fiscal discipline” and stop the excessive money printing that has been regular practice in recent years.

The new currency, the sovereign bolivar — to distinguish from the current, and ironically named, strong bolivar — will be anchored to the country’s widely discredited cryptocurrency, the petro.

Each petro will be worth about $60, based on the price of a barrel of Venezuela’s oil. In the new currency, that will be 3,600 sovereign bolivars, signaling a massive devaluation.

In turn, the minimum wage will be fixed at half a petro (1,800 sovereign bolivars), starting Monday. That is about $28, more than 34 times the previous level of less than a dollar at the prevailing black market rate.

Maduro also said the country would have one fluctuating official exchange rate, also anchored to the petro, without saying what the starting level would be.

As it stands, the monthly minimum wage, devastated by inflation and the aggressive devaluation of the bolivar, is still not enough to buy a kilo of meat.

In the capital Caracas, residents were skeptical about the new measures.

“Everything will stay the same, prices will continue to rise,” 39-year-old Bruno Choy, who runs a street food stand, told AFP.

Angel Arias, a 67-year-old retiree, dubbed the new currency a “pure lie!”

1 million percent inflation

The International Monetary Fund predicts inflation will hit a staggering 1 million percent this year in Venezuela, now in a fourth year of recession, hamstrung by shortages of basic goods and crippled by paralyzed public services.

Maduro blames the country’s financial woes on opposition plots and American sanctions, but admits that the government will “learn as we go along” when it comes to the currency redenomination.

His government pushed back Saturday against criticism of the economic reform plan.

“Don’t pay attention to naysayers,” Information Minister Jorge Rodriguez said. “With oil income, with taxes and income from gasoline price hikes … we’ll be able to fund our program.”

Electronic transactions are set to be suspended from Sunday to facilitate the introduction of the new notes.

Economy in turmoil

Oil production accounts for 96 percent of Venezuela’s revenue, but that has slumped to a 30-year low of 1.4 million barrels a day, compared to its record high of 3.2 million 10 years ago.

The fiscal deficit is almost 20 percent of GDP while Venezuela struggles with an external debt of $150 billion.

Venezuela launched the petro in a bid for liquidity to try to circumvent US sanctions that have all but stamped out international financing.

But there’s a good reason the redenomination hasn’t generated renewed hope or investor confidence: Venezuela has done this before.

Maduro’s predecessor Hugo Chavez stripped three zeroes off the bolivar in 2008, but that failed to prevent hyperinflation.

Also, Cryptocurrency rating site ICOindex.com has branded the petro a scam, and the U.S. has banned its nationals from trading in it.
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A budding trade war between the U.S. and Turkey over a detained American pastor is having global consequences. A sharp drop in Turkey’s lira, inflation and the threat of loan defaults, could drag down other economies, particularly in emerging markets. Turkey’s troubles are causing ripple effects in countries as far away as Argentina and Indonesia, while weighing on Asian currency rates and triggering currency fluctuations. VOA’s Diplomatic Correspondent Cindy Saine reports from Washington.
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Turkey’s currency this month has suffered heavy falls triggered by U.S.-Turkish tensions over the ongoing detention of an American pastor. Washington’s threat to impose new economic sanctions sparked another steep currency drop Friday. Dorian Jones reports on the economic fall out for people in Istanbul.
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Tesla shares dropped nearly 9 percent in value Friday, amid reports of CEO and co-founder Elon Musk meeting with the U.S. Securities and Exchange Commission (SEC).

Musk wrote on Twitter last week of his plans to take the company private for a price of $420 per share, writing that he had “funding secured.” On Monday, in a blog post, Musk admitted that was not true, as he was still waiting on a finalized deal with his investors, a Saudi Arabian foreign investment fund.

“I continue to have discussions with the Saudi fund, and I also am having discussions with a number of other investors, which is something that I always planned to do since I would like for Tesla to continue to have a broad investor base,” Musk wrote.

Since Musk’s original tweet, the company’s shares have dropped 12 percent overall, and reports of subpoenas being issued by the SEC have sent the company into turmoil.

In a New York Times interview Thursday, Musk said, “This past year has been the most difficult and painful year of my career.” The Times also reported that members of Tesla’s board are concerned with Musk’s drug use, notably his use of the sleep aid Ambien, which some believe have contributed to Musk’s controversial Twitter statements.

Last month, Musk came under fire for calling one of the cave divers who rescued 12 Thai soccer players and their coach a pedophile, citing no evidence. He later apologized for that remark.
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Stocks rose late in the day Friday as investors welcomed signs of progress in resolving the trade dispute between the U.S. and China. The Wall Street Journal reported that the countries hope to have a resolution by November.

Industrial, health care and basic materials companies made some of the biggest gains. The report came a day after China said it will send an envoy to Washington for the first talks between the countries since early June.

Marina Severinovsky, an investment strategist at Schroders, said stocks could jump if the U.S. and China make real progress toward a trade agreement. But stocks in emerging markets might make even bigger gains.

“The rally that could come, if there is a better outcome, would be in emerging markets,” she said. “China has suffered pretty greatly … the U.S. has held up pretty well.”

The late gains came in spite of weak results for several chipmakers. Electric car maker Tesla took its biggest drop in two years on reports of a wider government investigation into the company and concerns about CEO Elon Musk’s health.

The S&P 500 index rose 9.44 points, or 0.3 percent, at 2,850.13. The Dow Jones Industrial Average added 110.59 points, or 0.4 percent, to 25,669.32. The Nasdaq composite edged up 9.81 points, or 0.1 percent, to 7,816.33. The Russell 2000 index of smaller-company stocks gained 7.19 points, or 0.4 percent, to 1,692.95.

The Wall Street Journal cited officials in both the U.S. and China as it said negotiators want to end the trade war before U.S. President Donald Trump and Chinese President Xi Jinping meet at multilateral events in November.

Industrial companies made some of the biggest gains after agricultural equipment maker Deere posted stronger than expected sales. Its stock rose 2.4 percent to $140.59.

Construction equipment maker Caterpillar rose 2.3 percent to $139.34 and engine maker Paccar added 2.3 percent to $67.16.

Chipmakers fell after two companies gave weaker forecasts for the third quarter. Nvidia said it no longer expects much revenue from products used in mining digital currencies, and its stock fell 4.9 percent to $244.82. Applied Materials slumped 7.7 percent to $43.77.

While big names like Netflix, Facebook and Amazon slipped, Apple led technology companies slightly higher overall. Apple stock rose 2 percent to $217.58.

Nordstrom jumped 13.2 percent to $59.18 after raising its annual profit and sales forecasts and posting better earnings and sales than analysts expected. It’s been a mostly difficult week for department stores as Macy’s and J.C. Penney both plunged after issuing their quarterly reports.

The S&P 500 finished this week with a solid gain of 0.6 percent, but it took a difficult path to get there. Stocks fell early this week due to worries about Turkey’s currency crisis, and later investors fretted about China’s economic growth.

The recovery started Thursday as investors hoped the upcoming talks between the U.S. and China will help end the impasse that has resulted in higher tariffs from both countries.

The Hang Seng index in Hong Kong has fallen 13 percent since early June as the dispute has dragged on, and other emerging market indexes have also taken a hit. The S&P 500 has risen over that time.

Tesla was hit with a series of reports that concerned shareholders. The Wall Street Journal reported that the Securities and Exchange Commission started investigating the electric car maker last year to determine if it made false statements about production of its Model 3 sedan.

The SEC is also reportedly looking into CEO Elon Musk’s comment on Twitter about possibly taking the company private.

Tesla stock rose from about $345 a share to about $380 following Musk’s tweet last week, which said Tesla could go private for $420 a share. On Friday it dropped 8.9 percent to $305.50.

Musk also gave an emotional interview to the New York Times, published Friday, about the stress he’s experienced as the company tries to ramp up production. He said this year has been “excruciating” and described working up 120 hours a week, raising concerns about his health.

Bond prices rose. The yield on the 10-year Treasury note fell to 2.86 percent from 2.87 percent.

U.S. crude picked up 0.7 percent to $65.91 a barrel in New York. Brent crude, the standard for international oil prices, added 0.6 percent to $71.83 per barrel in London.

Wholesale gasoline dipped 0.3 percent to $1.98 a gallon. Heating oil inched up 0.1 percent to $2.10 a gallon. Natural gas rose 1.3 percent to $2.95 per 1,000 cubic feet.

Gold was little changed at $1,184.20 an ounce. Silver fell 0.6 percent to $14.63 an ounce. Copper added 0.5 percent to $2.63 a pound.

The dollar dipped to 110.60 yen from 110.88 yen. The euro rose to $1.1443 from $1.1365.

The German DAX lost 0.2 percent and France’s CAC 40 fell 0.1 percent. The FTSE 100 in Britain was little changed.

Japan’s Nikkei 225 index added 0.4 percent and Hong Kong’s Hang Seng gained 0.4 percent. In South Korea, the Kospi gained 0.3 percent.
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Для підтримки курсу гривні Національний банк України продав цього тижня на міжбанківському валютному ринку 215 мільйонів доларів, про це йдеться в коментарі НБУ на офіційному сайті.

Збільшення попиту на іноземну валюту в Нацбанку пояснюють сезонними, ситуативними та психологічними чинниками на заявляють про відсутність фундаментальних причин для знецінення гривні.

«Пропозиція іноземної валюти з боку головних експортних галузей (гірничо-металургійний комплекс, АПК) залишається на достатньо високому рівні, що свідчить про відсутність фундаментальних причин для знецінення гривні. Натомість спостерігається збільшення попиту на іноземну валюту на міжбанківському валютному ринку через сезонні, ситуативні та психологічні чинники», – йдеться в повідомленні.

Серед сезонних чинників в Нацбанку назвали збільшення попиту з боку імпортерів енергоресурсів, які потребують валюти для розрахунків за газ та за нафтопродукти (для раннього початку збирання врожаю) та з боку імпортерів товарів та послуг споживчого спрямування (електроніка, харчові продукти, туризм тощо), що, на думку регулятора, «є наслідком зростання доходів населення».

Крім того, під впливом негативних очікувань вже традиційно напередодні осені зменшується пропозиція валюти з боку населення на готівковому ринку, зазначили в НБУ.

Для згладжування надмірних коливань обмінного курсу гривні цього тижня НБУ щодня виходив на міжбанківський ринок з продажем іноземної валюти. Загалом за цей тиждень Національний банк під час валютних інтервенцій продав 215 мільйонів доларів.

Читайте також: Нацбанк про приїзд місії МВФ: це матиме позитивний вплив на стан валютного ринку

«Зокрема, сьогодні (17 серпня) було проведено аукціон з продажу $50 млн, у ході якого було отримано заявок на купівлю на суму $32,7 млн. За результатами аукціону регулятор продав $24,8 млн за середньозваженим курсом 27,93 грн/дол. Завдяки проведенню аукціону попит на валюту було задоволено, і довідковий курс гривні на 12:00 становив 27,93 грн/дол.», – повідомили в НБУ.

Там запевняють про готовність і надалі здійснювати валютні інтервенції, аби не допустити різкого послаблення курсу гривні.

Водночас Національний банк України суттєво понизив офіційний курс гривні. Згідно зі встановленим на 20 серпня курсом, падіння складає 22 копійки.

Якщо сьогодні за американський долар була встановлена ціна 27 гривень 67 копійок, то на понеділок – 27,89.
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Unions at Air France-KLM voiced concern after the company appointed Benjamin Smith as the new CEO with the support of the French state.

The company said Thursday that Smith, who is 46 and was previously Air Canada’s chief operating officer, will fill the role by Sept. 30.

Vincent Salles, unionist at CGT-Air France union, said on France Info radio that unions fear Smith’s mission is to implement plans that would “deteriorate working conditions and wages.”

The previous CEO, Jean-Marc Janaillac, resigned in May after Air France employees held 13 days of strike over pay and rejected the company’s wage proposal, considered too low.

Finance Minister Bruno Le Maire welcomed an “opportunity” for Air France-KLM and expressed his confidence in Smith’s ability to “re-establish social dialogue.”
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President Donald Trump says he’s asking federal regulators to look into the effectiveness of the quarterly financial reports that publicly traded companies are required to file.

In a tweet early Friday, Trump said that after speaking with “some of the world’s top business leaders,” he’s asked the U.S. Securities and Exchange Commission to determine whether shifting to a six-month reporting regimen would make more sense.

The SEC requires such companies to share profit, revenue and other figures publicly every three months.

Some believe executives are making decisions based on short-term thinking to satisfy the market at the expense of the long-term viability of their companies.

There are also tremendous expenses tied to preparing quarterly and annual reports.
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Many of Asia’s currencies are losing value against the U.S. dollar this year as China and the United States fight over trade, but analysts say policymakers are handling the dip better now than during past down cycles.

China, India, Indonesia and Myanmar, to name just a few, have seen their currencies lose value since the start of 2018. The Indian rupee hit an all-time low in June, and the Chinese yuan lost 3.2 percent over the year through June.

Economists point to a range of problems, including possible contagion from financial woes in Turkey and concerns about investing in Asia due to the Sino-U.S. trade war expected to hit China next week with tariffs on goods worth $16 billion.

“It’s just basically that everything we’ve worried about now and then sort of converged together,” said Song Seng Wun, an economist in the private banking unit of CIMB in Singapore.

But monetary authorities in Asia have learned from currency dips in 2013, 2015 and 2016, economists believe.

​Causes for decline

No single cause is pushing currency prices lower around Asia, analysts say. Rising oil prices have knocked back the rupee as Indians pay more to import it, media in the country say. Domestic media in Myanmar blame a surge in imports into the fast-growing Southeast Asian country, plus people’s hoarding of U.S. dollars.

In Vietnam, the brokerage Bao Viet Securities blames a 1.3 percent dip in the dong currency due to pressure from similar slips elsewhere in Asia, including the Chinese yuan’s devaluation and a 7 percent fall in the Indonesian rupiah as of June.

A particularly severe fall in Turkey’s lira along with inflation and loan defaults — all threatening to drag down other economies — is weighing on Asian currency rates, Song said.

Economists and media in the countries affected usually point to spillover from the Sino-U.S. import-export war as a chief cause. That dispute began unfolding in early 2018 as U.S. President Donald Trump said Beijing was trading unfairly.

In India, the trade war has dissuaded investors from taking positions in domestic assets, media reports there say. And in Vietnam, China’s devaluing of the yuan in June, possibly because of U.S. trade tension, cramps Vietnamese exports. A lower yuan helps Chinese exporters earn more on goods shipped to the United States.

“I think there’s a number of reasons why it could be going down,” said Maxfield Brown, speaking to the currency in Vietnam where he’s senior associate with the business consultancy Dezan Shira & Associates.

“I think [Vietnamese officials] are watching what’s going on between China and the United States, and it is a fact that the Chinese government has devalued its currency and that impacts the ability of Vietnam to export products. I think everyone’s watching the situation.”

​Coping strategies

Asian monetary authorities have gotten a grip on this year’s devaluations compared to what happened in 2013 as capital left Asia due to the tapering of economic stimulus in the United States, said Marie Diron, managing director with Moody’s Investors Service in Singapore.

Economic stimulus after the global financial crisis had inspired investors to buy assets in Asia where they grew relatively fast, tracking the region’s economic strength.

To shore up the rupiah, Indonesia’s monetary authority has raised interest rates four times in three months. Monetary authorities in India and the Philippines have raised rates this year, as well. Rate hikes generally raise the value of currencies compared to countries that keep rates down.

Asian countries are keeping more foreign currency in reserve and better controlling any budget deficits, as well, Diron said.

“Central banks have built up their foreign exchange reserve buffer, so they do have more ammunition, if you want, to at least smooth some of the currency volatility,” she said.

In Vietnam, mismanagement of currency in the past has taught leaders how to react, and they’re aiming for a “measured response” now, Brown said.

China is likely to nudge its currency back up along with budgetary stimulus for the economy, easing worries in other markets, the French investment bank Natixis said in a research note Friday.

Asian currency drops are unlikely to reach crisis levels, economists say. They’re not weak enough even to pose that threat yet, Song said.

In some cases, he said, trade-reliant nations such as many in Southeast Asia may fare better with weaker currencies because exporters would earn more money when converting their U.S. dollar earnings into local units.
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Національний банк України суттєво понизив офіційний курс гривні. Згідно зі встановленим на 20 серпня курсом, падіння складає 22 копійки.

Якщо сьогодні за американський долар була встановлена ціна 27 гривень 67 копійок, то на понеділок – 27,89.

Раніше сьогодні регулятор повідомляв, що продав банкам на валютному аукціоні майже 25 мільйонів доларів.

У НБУ пояснили, що зберігають активну присутність на міжбанківському валютному ринку для згладжування надмірних коливань обмінного курсу гривні, «які посилилися поточного тижня у зв’язку із подальшим перевищенням попиту на валюту над її пропозицією».

Читайте також: Нацбанк про приїзд місії МВФ: це матиме позитивний вплив на стан валютного ринку

«Дається взнаки сезонне збільшення попиту з боку імпортерів енергоресурсів, які потребують валюту для розрахунків за газ і за нафтопродукти (для раннього початку збирання врожаю) і з боку імпортерів товарів і послуг споживчого спрямування (електроніка, харчові продукти, туризм тощо), що є наслідком зростання доходів населення. Крім того, під впливом негативних очікувань вже традиційно напередодні осені зменшується пропозиція валюти з боку населення на готівковому ринку, що позначається на спрямованості операцій банків на міжбанківському валютному ринку», – заявляють у Нацбанку.

Про вихід на міжбанківський ринок із продажем валюти Національний банк України оголосив 2 серпня. У банку заявляли, що зробили це для стримування зростання курсу долара. Саме 2 серпня курс гривні до долара вперше з 27 лютого досяг позначки у 27 гривень за долар.
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A federal court in New York has charged 22 Chinese importers with smuggling nearly half-a-billion dollars in counterfeit goods into the United States from China.

The fake products include such popular luxury items as Louis Vuitton bags, Michael Kors wallets, and Chanel perfume.

Twenty-one of the defendants were arrested Thursday.

U.S. attorneys say the suspects allegedly smuggled the China-made counterfeit goods in large shipping containers disguised as legitimate products and brought them into ports in New York and New Jersey.

The defendants apparently intended to sell the fake products across the United States with a street value of nearly $500 million.

Along with smuggling and trafficking in counterfeit goods, the suspects are also charged with money laundering and immigration fraud.

“The illegal smuggling of counterfeit goods poses a real threat to honest business,” assistant attorney general Brian Benczkowski said. “The Department of Justice is committed to holding accountable those who seek to exploit our borders by smuggling counterfeit goods for sale on the black market.”
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Russia says the latest U.S. sanctions imposed on Russian, Chinese, and Singaporean companies are “destructive” and “useless.”  

The U.S. penalized the three companies Wednesday, accusing them of helping North Korea avoid international sanctions.

The Russian Foreign Ministry said Thursday the new U.S. sanctions come when “joint international efforts” are needed toward a settlement in North Korea. Moscow said the sanctions could undermine denuclearization talks.

The U.S. has accused a Chinese trading company and its affiliate in Singapore of falsifying documents aimed at easing illegal shipments of alcohol and cigarettes into North Korea. The companies are said to have earned more than $1 billion.

A Russian company was also sanctioned for providing port services to North Korean-flagged ships engaged in illegal oil shipments.

The sanctions freeze any assets the companies may have in the United States and bars Americans from doing business with them.
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