IMF fears emerging markets instability

18 Mar
IMF fears emerging markets instability

The head of the International Monetary Fund warned on Tuesday that emerging markets are set to face a renewed period of economic instability when US interest rates rise this year, forecasting a repeat of 2013’s damaging “taper tantrum” episode of capital flight and rapid currency depreciation.

The remarks by Christine Lagarde, given during a speech in India, come one day before Federal Reserve chairwoman Janet Yellen is expected to signal an end to the Fed’s policy of low-rates guidance on Wednesday, with global investors bracing for an initial rise in US rates as early as June.

While the blasts and flashes from the west, threatening to charge more “cost” to Russia in the form of additional sanctions that ensure that the last deflationary recession in Europe is even more acute, Russia “isolated” (ironic note) is seeking opportunities to the outside, to the east, and as part of its latest initiative to de-dollarization, the Moscow Stock Exchange announced that it has begun the Chinese renminbi trade Russian -Rouble on the forward currency market .

On March 17, the Moscow Stock Exchange started trading a futures contract on the currency pair Chinese renminbi – Russian ruble

The launch was supported by revenues in Renminbi which substantially increases in the stock market, the growing volume of settlement in the currency between Russia and China and the new demand arising from the coverage of these operations.

Andrey Chemetov, First Deputy Managing Director Moscow Stock Exchange, said:

“The launch of futures CNY / RUB is the next step made ​​by the Moscow Stock Exchange to offer a full range de’instruments and hedging tools Renminbi participants. We expect that the new contract will be liquid and there will be a demand like other currency derivatives to facilitate the turnover of trade between China and Russia ”  .

The contract is cash settled against the fixing CNY / RUB of the Moscow Stock Exchange.

The contract expiration dates are all 15 of March, June, September and December.

Metallinvestbank act as market maker for the contract.

The turnover of the Moscow Stock Exchange in Chinese renminbi has risen by 700% in 2014 to 395,000,000,000 rubles (CNY 48 billion). The record daily volume moyenest CNY 541 million, and was seen in October.

Currently, offers of the derivatives market of the Moscow Stock Exchange include nine futures on currencies: USD / RUB, EUR / RUB, EUR / USD, AUD / USD, GBP / USD, USD / JPY, USD / CHF, USD / UAH, USD / CAD and USD / TRY and three options: USD / RUB, EUR / USD and EUR / RUB.

And in other news, the US Treasury Secretary Jack Lew wondered why the ”  international credibility and influence of America is threatened “…

Other news in this sense, according to Xinhua, China and Russia will work on the economic belt of the Silk Road:

(Source: Xinhua)

 China and Russia will sign an agreement to work on the economic belt of the Silk Road, said Sunday the Chinese Foreign Minister Wang Yi on the sidelines of the annual parliamentary session.

Pragmatic cooperation between China and Russia is based on mutual needs and has a huge internal momentum and significant margin expansion, said the minister.

 “This year, our pragmatic cooperation should lead to new results,” he said. “We will work hard to increase the volume of bilateral trade to $ 100 billion.”

He said China and Russia launch a strategic cooperation in the development of the Russian Far East.

 “We will strengthen our cooperation on high-speed railways,” he added.

 China and Russia will begin to fully build the eastern section as part of a pipeline program and sign an agreement on the western section.

The two countries will accelerate the joint research and development on a long line haul aircraft widebody.

 China and Russia will continue to increase their cooperation in the financial sector, oil and gas, and nuclear energy.

While we try to our patriotic duty every day, Jack Lew’s comment that: U.S. ECONOMIC RECOVERY WELL ESTABLISHED, LEW SAYS was too much to bear… so we provide the following 3 charts for guidance in comprehending the propaganda. Why would he blatantly lie in the face of unequivocally bad data? Simple, they are desparate to spin US economic strength as the world comes to realize it no longer needs to rely on a unipolar US-based model

 Economic Growth expectations for the US in 2015 are collapsing…

 grafico 1

as Macro data crashes on a scale not see since Lehman…


grafico 2

In fact its the worst start to a year on record…


grafico 3

 “well established”? Well perhaps Lew has had a little too much Irish spirit today.

*  *  *

Why would simply lie about unequivocally bad data?

The Obama administration warned on Tuesday that rising powers were challenging U.S. leadership in global financial institutions, and urged Congress to approve a deal it says would help preserve U.S. influence.

 “New players are challenging U.S. leadership in the multilateral system,” Treasury Secretary Jack Lew said in prepared remarks.

 Lew urged lawmakers to sign off on a reform of the International Monetary Fund that would give emerging markets a bigger say in global economic policy while also preserving U.S. veto power in the institution. The U.S. and other countries agreed to a deal in 2010, but the U.S. Congress has yet to approve it.

 Lew said that “is causing other countries, including some of our allies, to question our commitment to the IMF and other multilateral institutions.”

 “Our international credibility and influence are being threatened,” he said.

 U.S. influence challenged in global financial institutions

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