KTFA: Samson: Putin calls for a review of the global financial system
13th October, 2022
Russian President Vladimir Putin called for a review of the global financial system, and also called for addressing the problems of food supply and financing
“We will contribute to strengthening economic and trade construction in Asia,” Putin said, during his speech at the sixth summit of the member states of the Conference on Interaction and Confidence-Building Measures in Asia (Astana Summit), today
He added, “We are doing everything in our power to establish a security system based on international law,” noting that “the risks of hunger are increasing, and in turn, we are doing everything in our power to secure basic materials for needy countries
We want to reconsider the global financial system and preserve the financial sovereignty of our countries,” the Russian president added
He believed that “the world has become multipolar today, and Asia plays the most important role in this new order LINK
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Samson: Can central banks succeed in the task of “reining” the dollar?
10/13/2022 21:40:35
With the US dollar heading to consolidate its gains, speculations are increasing that the major central banks will make extraordinary interventions to defend their currencies.
Although the dollar index, which measures the US currency against a basket of other currencies, including the pound and the yen, fell by 0.17% to 113.01 points, but it is not far from the highest level recorded in two decades, which it touched two weeks ago.
According to the latest MMIV Plus survey, about 45% of the 795 respondents expect countries to start working together to counter the rising dollar, which is putting increasing pressure on weaker economies and on commodity importers who have been hit by the economic effects. of the Russo-Ukrainian War.
Nearly the majority of respondents said they expect Japan to step up its exorbitant efforts to prop up the yen itself, without support from others, according to a report published by Bloomberg. And 65% of respondents expected the Bloomberg spot dollar index to rise to new records during the next month. The dollar rose to a 20-year high at the end of last September, as international investors seized high interest rates in the United States or sought refuge from market turmoil, including in the crisis-ridden United Kingdom and emerging markets. A rising dollar is amplifying the economic hardships of countries around the world by raising the prices of imported food and fuel.
This rally of the US currency puts more pressure on many central banks, which have been raising interest rates in an attempt to curb the rise in consumer prices. And the unstoppable dollar puts a drag on US corporate profits by reducing the value of money made overseas. Nearly 90% of survey respondents expect third-quarter earnings to show a greater dollar impact than the previous quarter. “The dollar’s bullish trend will continue in the near term,” Joseph Lewis, head of hedging and forex solutions at Jefferies LLC, told Bloomberg. “In the long run, the world will shift and some other currencies will rebound. But human behavior tells me that it seems like being in the US is just a better place now.”
The dollar was dragged higher by the most aggressive Federal Reserve (US central bank) tightening policy since the early 1980s, sending US bond yields higher. The Bloomberg dollar index is up 14% this year, with the currency gaining against the pound and the yen.
The pound also collapsed to a record low in late September due to concerns about the UK’s deep tax cut plans. Japan spent $19.7 billion in its first intervention since 1998 to prop up the currency, but the sudden move did not bring long-term results. Unlike the Federal Reserve, the Bank of Japan kept interest rates low.
As for the People’s Bank of China, it directed foreign branches of state-owned banks to prepare to sell dollars and buy the Chinese yuan, in an attempt to prevent further depreciation of the local currency, which fell to its lowest level against the dollar since 2008. LINK
