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Tag: Foreign Exchange Reserves

  • Bank of Russia to sue EU over block placed on its gold and foreign exchange reserves

    Bank of Russia to sue EU over block placed on its gold and foreign exchange reserves

    The Bank of Russia is set to challenge the block placed on its gold and foreign exchange reserves, following EU ban on all transactions with the bank.

     

    This was disclosed by Governor Elvira Nabiullina on Tuesday.

     

    She said the bank is working on lawsuits.

     

    “This freezing of gold and foreign exchange reserves was unprecedented, so we are going to work on legal claims, and we are getting ready to put them forward.

     

    “This block on the gold and foreign exchange reserves of such a large country is unprecedented on a global scale,” she stated.

     

    She said the bank will fight the West’s infringement against Russia’s assets.

     

    Nabiullina noted that due to the freezing of part of the reserves, additional currency regulations had to be introduced.

     

    “But it was a forced measure. If we had these gold and foreign exchange reserves in possession, and had this part not been frozen, there would have been no need for such draconian measures on the movement of capital,” she explained.

     

    At the end of February, the EU decided to prohibit transactions related to the management of the reserves and assets of the Bank of Russia, including transactions with any legal entity, or legal entities or bodies acting on behalf of or at the direction of the Bank of Russia.

     

    Nonetheless, the EU authorities may authorize transactions, provided that they are strictly necessary to ensure the financial stability of the continent-wide bloc as a whole or a separate EU member state.

     

    Earlier, the foreign ministers of 27 EU countries approved a ban on all transactions with the Bank of Russia and froze its assets.

  • IMF lauds Nigeria for strong foreign exchange reserves, exiting recession

    The International Monetary Fund (IMF) on Wednesday welcomed Nigeria’s exit from economic recession and lauded its strong recovery in foreign exchange reserves.

    IMF said this in a report released on Wednesday in Washington DC by its Executive Board after the conclusion of Article IV Consultation with Nigeria.

    According to the report, the Executive Directors of IMF welcomed Nigeria’s exit from recession and the strong recovery in foreign exchange reserves, helped by rising oil prices and new foreign exchange measures.

    They commended the progress in implementing the Economic Recovery and Growth Plan, including the convergence in foreign exchange windows, tight monetary policy and improvements in tax administration.

    IMF, however, said that though, the Nigerian economy has exited recession, it still remained fragile and susceptible to shocks.

    “The directors noted, however, that important challenges remain as growth in the non-oil, non-agricultural sector has not picked up.

    “To address these vulnerabilities, they stressed that comprehensive and coherent policy actions remain urgent.

    “The directors emphasised the need for a growth-friendly fiscal adjustment to reduce the ratio of interest payments to revenue, to a more sustainable level and prioritise social and infrastructure spending,” the report said.

    According to IMF, in addition to ongoing efforts to improve tax administration, there is need for more ambitious tax policy measures, including reforming the value added tax, increasing excises and rationalising tax incentives.

    “The implementation of an automatic fuel price setting mechanism, sound cash and debt management and improved transparency in the oil sector is imperative.

    “There is need to also increase monitoring of the fiscal position of state and local governments and substantially scaled-up social safety nets,” he said.

    The IMF commended the Central Bank’s tightening Monetary Policy in 2017, which they advised should continue until inflation is within the single digit target range.

    According to the report, a number of the IMF Directors called for a higher monetary policy rate, a symmetric application of reserve requirements and no direct Central Bank financing of the economy.

    “A few of the IMF Directors also advised the Federal Government to fast-track the confirmation of the appointments of the central bank’s board of directors and members of the monetary policy committee.

    “The directors emphasised that structural reform implementation should continue to lay the foundation for a diversified private sector led economy.

    “They noted that, building on recent improvements in the business environment, implementing the power sector recovery plan and investing in infrastructure will accelerate growth in the country.

    “They also advised that the government should strengthen anti-corruption and transparency initiative, while implementing the financial inclusion and gender strategies,” the report said.

    The IMF commended Nigeria on the continued improvement in the quality and availability of economic statistics and encouraged further efforts to address remaining gaps.