Aurelia Butler

ACCRA/LONDON (Reuters) – Ghana has sent a debt restructuring proposal to its official creditors, two sources with direct knowledge of the matter said, as the West African country battles to escape its worst economic crisis in a generation.The “working proposal” is a crucial first step for the cocoa, gold and oil producer to engage the official creditor committee after its formation in May and is not legally binding, one of the sources said.It marks the opening of a more detailed negotiating process that will likely see a number of proposals being exchanged. Ghana intends to finish restructuring its domestic debt before turning to negotiations with its official, bilateral creditors and international bondholders, a government official said.The sources did not confirm the details of the proposal or the date on which it was sent. A spokesperson for Ghana’s finance ministry did not immediately comment. Ghana aims to cut $10.5 billion in interest payments on its external debt over the next three years to successfully implement a $3 billion loan deal from the International Monetary Fund (IMF).Its debts to countries including China and members of the Paris Club of creditor nations were $5.4 billion of the $20 billion external debt due for restructuring, as of the end of a 2022, according to a government presentation to investors. The total external debt stock was about $30 billion.Ghana completed a domestic debt exchange with 65% of holders of local bonds in February and is also seeking relief on the bulk of the remainder of its domestic debt, including deals with pension funds, labour unions and independent power producers.It is restructuring its debt under the Common Framework process, set up by the G20 in 2020 to bring China and other newer creditor nations into joint sovereign debt restructuring negotiations, for its external debt rework.(This story has been refiled to add a dropped word in the lead) More

This comes a day after Apple (NASDAQ:AAPL) unveiled a costly augmented-reality headset called the Vision Pro, one of its riskiest bets since the introduction of the iPhone more than a decade ago, barging into a market dominated by Meta Platforms.Apple’s headset will test a market crowded with devices that have yet to gain traction with consumers and put it in direct competition with Facebook-owner Meta after years of clashes between the companies over issues like user privacy and control of developer platforms.Mira’s military contracts include a small agreement with the U.S, Air Force and a $702,351 agreement with the Navy, according to government records and press releases, the Verge report said.The Verge added that Apple had confirmed the acquisition saying that it buys smaller technology companies from time to time, and generally does not discuss its purpose or plans.Apple has brought on at least 11 of Mira’s employees as part of the acquisition, according to the report.Apple, Mira and its CEO Ben Taft did not immediately respond to Reuters’ requests for comment. More

The future is Asian, argues the respected analyst, Parag Khanna. But this piece of conventional wisdom needs unwrapping. Geographically, Asia is no more a continent than is Europe. “Asia” itself is not even an Asian idea: Europeans invented it. Asians did not conceive of themselves as being part of a single continental entity. The region is too vast and diverse for that to have been possible.It still is. What is happening is rather a global rebalancing, as the historically brief, but world-changing, domination over humanity of Europe and its colonial progeny dwindles away. A multipolar and messy world will replace it. Will “Asia” make up a huge part of this? Certainly. China and India will be actors. But Asia is rather an arena than an actor.Look at a globe: Europe and Asia are one continent. For historical and cultural reasons, it also makes sense to include north Africa in Asia, rather than Africa. This then is Eurasia, the continent of the long-lasting human civilisations. Historically, this supercontinent was home to Confucian civilisation to the east, Hindu civilisation to the south, Islamic civilisation in the near west and Christendom in the far west. To the north were the steppe nomads. The interactions among these neighbours were profound. But Eurasia was too vast to be, or to be conceived of as, a unity.The Greeks appear to have invented the idea of dividing this single continent into two. The name is first attested in Herodotus, in about 440BC. At that time, nobody knew quite how vast what he called Asia was.The British historian John Hale argues that the name “Europe” also replaced “Christendom” during the Renaissance. With Europe imagined as a separate continent, Asia was the name for the vast and diverse areas to the east. But only in the past few centuries did economic, technological and military change give Europe and its offshoots domination. The distinction between Europe and Asia became real in terms of military conquests and extraordinary gaps in wealth.The late Angus Maddison argued that, in 1820, the real gross domestic product per head of western Europe was a little over double that of east Asia. By 1950, the ratio had soared to 6.5 times. But, by 2018 it had fallen back to just 2.4 times, almost where it was two centuries ago. In 1820, Asia generated 61 per cent of world output, while western Europe generated only 25 per cent. By 1950, the Asian share had collapsed to a mere 20 per cent, while western Europe’s had reached 26 per cent. By 2018, however, western Europe’s share was down to 15 per cent, while Asia’s had recovered all the way back to 48 per cent.Eurasia has rebalanced quite a bit. What about its weight in the world? Over the past two centuries, it declined, as output jumped in the Americas and populations also jumped there and in sub-Saharan Africa. But Eurasia remains the heartland of humanity. The share of the population of Eurasia in the world total was still 72 per cent in 2018, albeit down from 91 in 1820. Similarly, its share in global output was 70 per cent, down from 92 per cent in 1820 (with much of the rest, inevitably, in North America).The big story then is of the recovery of what we call Asia, led by east Asia, from its steep relative economic decline in the 19th and early 20th centuries. In the process, Eurasia has substantially rebalanced and so, quite naturally, has the world as a whole. This “great convergence” is also not due to some uniquely “Asian” culture. The very different cultures of Asia, and especially of east and south Asia, have embraced what one might consider European notions: competitive markets, free enterprise, liberal trade, education and the goal of economic growth.

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Precise packages vary. They depend on the histories and political cultures of specific societies. China and India, for example, are extraordinarily different from each other. But many of these societies do share a desire for more prosperous lives. Yet this is not by any means uniquely Asian. It is universal. What is a little less so, alas, is the ability to organise societies in ways that make the achievement possible. There is no doubt that over the past decades, Asian societies, notably those of east Asia, have been hugely successful in this regard.It is not at all surprising that this catch up by such a vast number of people generates huge opportunities for commerce among them, as the McKinsey Global Institute has noted. The creation of the Regional Comprehensive Economic Partnership, around China (but without India) suggests this may develop faster, though it also underlines the almost inevitable centrality of China in any such process of integration.What then can we say about this rebalancing of Eurasia and so the world? The most important point is that it is natural. The extraordinary power enjoyed by Europeans and the US, their potent progeny, is dwindling. Not surprisingly, what we call Asia, close to half of the human population and home to some of the world’s historic civilisations, is leading the change. Barring catastrophes, this is also likely to continue. The world economy’s centre of gravity is simply shifting east. Asia then will be hugely economically and politically important. But it will also have highly significant internal rivalries and difficulties of its own. There will be no collective Asian “will”, other than for societies to pursue their own paths.Meanwhile, the west needs to get two contrasting thoughts into its collective head. First, it must deal with the world as it is. Second, it must defend the best of its values, notably democracy and individual freedom, regardless of what anybody else in the world thinks. Who, after all, supposed life would get [email protected] Martin Wolf with myFT and on Twitter More

LONDON (Reuters) – New trades in the enormous U.S. dollar interest rate swap market have almost entirely stopped using the London Interbank Offered Rate (LIBOR) as the deadline for its demise approaches.A record 91% of new dollar swaps executed in May used the Secured Overnight Financing Rate (SOFR), the newly accepted U.S. benchmark, as their reference rate.Just 5% of new swaps used LIBOR, down from 91% two years earlier, according to data from post-trade services provider OSTTRA, which has figures on around 85% of dollar trades.Investors and companies use interest rate swaps to hedge against risks and to bet on the direction of rates. The Bank for International Settlements estimated that turnover in the U.S. market was about $2 trillion a day in 2022.LIBOR will cease to exist in the coming months after a years-long push by regulators to move away from a rate that bank traders were caught manipulating. It was once used in pricing everything from derivatives to student loans. Dollar LIBOR quotes will end on June 30, although regulators have said a “synthetic” rate will continue for a period.SOFR is calculated by the Federal Reserve and is based on the cost of borrowing cash overnight in U.S. repurchase markets.It was used as the benchmark rate for 53% of the notional amount of U.S. dollar interest rate swaps traded in May, OSTTRA’s data showed. LIBOR had a 4% share, down from 67% two years earlier, while the Fed funds rate had a 43% share.The two main derivatives clearing houses, the CME Group (NASDAQ:CME) and LCH, have been converting U.S. dollar LIBOR swaps into cleared SOFR swaps this year, with the process due to finish in July.Many existing issues across financial markets are still linked to LIBOR, however. In February, around 80% of institutional loans and collateralised debt obligations were still tied to the tarnished rate, according to private equity firm KKR. More

(Reuters) – Brazilian inflation probably declined to an eight-month low in May versus April, opening a much anticipated window for interest rate cuts in the second-half of the year, a Reuters poll of economists predicted.On a 12-month basis, consumer price data due Wednesday are expected to show the smallest rise in more than two years, adding to evidence for the potential start of an easing cycle from a reticent central bank.The IPCA inflation index likely increased 0.33% on the month in May, its softest reading since September 2022, and 4.04% in the 12-month gauge, the lowest since October 2020, according to median estimates of 20 analysts polled from May 31 to June 5.”Recent fuel price cuts will start to affect inflation in the May print. We expect -1.5% m-o-m for gasoline, with a contribution of -7 basis points to the headline,” UBS economists wrote in a report.Brazilian state oil company Petrobras has adopted a new fuel pricing policy described by President Luiz Inacio Lula da Silva as “a victory for the people” that is sharply lowering costs for motorists.At the same time, thanks to this year’s bumper crops, additional disinflation is coming from the food industry, with unexpected moderation of price markups in supermarkets giving consumers more relief at the check out.The hoped-for confirmation of last month’s slowdown to just above 4.0% will likely be interpreted as the opening of a window for rate cuts that officials in Lula’s government have been waiting for.Banco Central do Brasil’s hawkish stance continues to attract cash to bank accounts paying steep interest on the benchmark rate of 13.75%. This has reduced funding for industrial production, which keeps underperforming.What remains unclear is how fast the central bank’s orthodox leadership will act in the days and weeks following the new inflation figures, as governor Roberto Campos Neto looks for indisputable signs of lower inflation expectations.While acknowledging a better outlook, monetary policymakers are still worried about inflation forecasts exceeding this year’s official goal of 3.25%, with a tolerance margin of 1.5 percentage points.One factor at play in persistently high projections is speculation Lula’s team may push this month for a change in inflation goal timelines to justify prompt rate cuts, something a top bank figure seemed eager to dispel at an event this week.In the central bank’s own weekly macro survey among economists, the latest consensus for 2023 inflation stood at 5.69%. Stats agency IBGE will release May’s data on Wednesday at 0900 local time (1200 GMT). (Reporting and polling by Gabriel Burin; Editing by Jonathan Cable and Mark Potter) More