Aurelia Butler

LONDON/NEW YORK (Reuters) – The board of the International Monetary Fund approved on Friday a new program with Argentina for about $44 billion, the IMF said, acknowledging that the plan comes with “exceptionally high” risks. The agreement, reached by consensus according to two sources, marks the 22nd IMF program for Argentina and comes after more than a year of negotiations. It replaces a failed $57 billion program from 2018, for which Argentina still owes over $40 billion.About $9.66 billion will be disbursed immediately, the Fund said.The approval comes after Argentina’s Congress signed off on March 17 on the financing aspect of a staff-level agreement, but not on the policies expected to keep the economy on track and the debt sustainable.”Risks to the program are exceptionally high and spillovers from the war in Ukraine are already materializing,” Kristalina Georgieva, the IMF’s Managing Director, said in a statement.”In this context, early program recalibration, including the identification and adoption of appropriate measures, as needed, will be critical to achieve the program’s objectives.”Russia’s invasion of Ukraine late in February and sanctions that followed have pushed the price of many commodities, including energy and food, sharply higher and is expected to push inflation even higher than has been expected.JPMorgan (NYSE:JPM) this week revised its primary fiscal deficit forecast for this year in Argentina to 2.8% of GDP, above the program’s target of 2.5%.NO ‘CONFIDENCE SHOCK’The deal aims to strengthen public finances, start reducing inflation and build up the local currency debt market, among other goals.Political cracks inside Argentina’s ruling center-left coalition have widened over the deal and there are fears the economic strings attached will further strain people in the South American country fighting with inflation above 50%.”It will very unlikely trigger the positive confidence shock, increase in private investment, and access to international capital markets that the country badly needs,” said Alejo Czerwonko, emerging markets Americas CIO for UBS Global Wealth Management ahead of Friday’s meeting.Details of the agreement were made public after a staff-level agreement reached earlier this month.Argentina’s 2018 agreement was the largest in the IMF’s history and the Fund risks reputational damage if the program doesn’t succeed.Some private holders of Argentina’s debt, restructured in September 2020, criticized early on the negotiations as tainted by politics, allowing the government to carry on “erratic” economic policies.”There’s been a lot of criticism of this deal, that it’s going to fall apart, that it’s an IMF-light deal, it’s a Band-Aid… But it’s an important Band-Aid,” said Robert Koenigsberger, chief investment officer at Gramercy, in an interview before Friday’s meeting.”The only thing that would make this stuff worth less than 32 (cents), which is where it trades today, is if the wheels fall off the bus. What this IMF deal does is it tightens the lug nuts on the wheels, so to speak.”The restructured U.S. dollar bonds have been trading in the low 30-cents on the dollar area for most of last year and ended down on the day, with the 2030 down 2.6 cents to 29.50.The restructured bonds in euros ended the day flat to slightly higher.^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Argentina: IMF payouts https://tmsnrt.rs/3pCpy90Argentina’s U.S. dollar bond prices (Interactive graphic) https://tmsnrt.rs/3FzHvdHArgentina: IMF payouts (Interactive graphic) https://tmsnrt.rs/3MqNshG^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ > More

NEW YORK (Reuters) – New York’s public pension fund, one of the largest pension funds in the United States, will divest its holdings in Russian companies following Russia’s invasion of Ukraine, state comptroller Thomas DiNapoli said on Friday.The divestment by the $279.7 billion New York State Common Retirement Fund, which DiNapoli oversees, followed the comptroller’s March 1 decision to end new investments in Russian companies.DiNapoli estimated at the time that the fund had $110.8 million of public equity investments in Russian companies.He said the investments would be sold in a “prudent manner and timeframe,” consistent with his fiduciary duty.In a statement, DiNapoli said Russia’s “unconscionable and immoral invasion” of Ukraine has made Russia an “unacceptable investment risk,” and that Russia’s already weak economy is plunging toward an “economic crisis.”The California Public Employees’ Retirement System (CalPERS), the largest U.S. pension fund, on March 3 halted all transactions in Russian publicly traded equity and stopped the flow of new investments into the country.It owned about $765 million of Russian public stocks and illiquid real estate assets at the time, out of approximately $469 billion of total assets.New York’s Common Retirement Fund invests on behalf of more than 1 million state and local government employees, retirees and their beneficiaries.Russia calls its actions in Ukraine a “special operation.” More

WASHINGTON (Reuters) – The United States is done “sitting on its hands” and will more actively pressure China, the world’s second largest economy, to change trade practices that Washington believes distort the market, top U.S. trade negotiator Katherine Tai said.Tai, a trade lawyer and former congressional staffer appointed by President Joe Biden, inherited difficult talks with Beijing over a “Phase 1″ trade deal negotiated by former President Donald Trump.In an interview with Reuters this week, Tai said the United States was preparing a new approach to China trade policy.Without offering specifics, she said Washington needed new, more effective tools to defend its economic interests and better compete with China. New U.S. trade investigations, which could result in tariffs or even embargoes against China, may be next, sources familiar with the matter said.”We’re not going to stop pushing China and challenging China to reform and change. But we can’t afford to keep sitting on our hands and waiting for China to make its decision,” said Tai, the first Asian American in the job and a fluent Mandarin speaker.”We are going to need to turn the page on the playbook,” Tai said.A March report https://ustr.gov/sites/default/files/2022%20Trade%20Policy%20Agenda%20and%202021%20Annual%20Report.pdf from her office said China had “doubled down on its harmful trade and economic abuses.” Beijing has failed to buy a promised $200 billion in additional U.S. goods and services agreed in the deal. China now faces warnings from the United States, the world’s largest economy, not to aid Russia’s invasion of Ukraine. In the year since Tai became trade czar, some U.S. business executives say they have been frustrated by the slow progress in punishing China. Meanwhile, the U.S. goods trade deficit with China hit $355.3 billion in 2021, the largest recorded since 2018.Tai acknowledged frustrations, but pointed to longstanding disputes that Washington has resolved with other countries in the past year, precisely, she said, to focus on the bigger threats China poses.Washington settled a 17-year dispute over aircraft subsidies with the EU and Britain, and a four-year battle over U.S. steel and aluminum tariffs with the EU, Britain and Japan, she said.ALLIES, TARIFFS, CONGRESS Tai in November revived a trilateral dialogue with the EU and Japan https://ustr.gov/about-us/policy-offices/press-office/press-releases/2021/november/joint-statement-trade-ministers-united-states-japan-and-european-union-after-trilateral-meeting begun by the Trump administration, seeking a joint approach to China’s industrial subsidies and other “non-market policies and practices,” aimed at getting World Trade Organization support, a U.S. official said.Washington is considering a new Section 301 investigation into Chinese industrial subsidies that could lead to a fresh round of tariffs or embargos, officials say. The Biden administration may also target China’s violations of intellectual property protections under Section 337 of the Tariff Act of 1930, said William Reinsch at the Center for Strategic and International Studies.The U.S. Congress is also considering bipartisan legislation that would bolster protections against trade secret violations and expedite investigatory and exclusionary processes.Tai, citing concerns about China’s use of forced labor in its Xinjiang region, is also developing a first-ever USTR trade strategy on the topic. Jamieson Greer, a partner with King & Spalding and former senior U.S. trade official, said Beijing’s response to the war in Ukraine had heightened Europe’s growing unease with China, adding Western sanctions against Russia may provide a playbook for future actions against China.Tai said a “one size fits all” approach would not work.”These are two different countries, two different economies, two different situations. And we really conflate them at our peril,” she said. More

Although official opinion polls suggest most Russians support President Vladimir Putin’s decision to send tens of thousands of troops into Ukraine, social media, interviews and anecdotal data suggest many Russians have been distressed by the severity of the sanctions imposed on Moscow by the West to try to force it to withdraw its forces. Many foreign brands have announced they are suspending their operations or quitting Russia, the rouble’s value against the dollar has slumped dramatically, and prices for many everyday products have soared since Feb. 24 when Putin announced what he called “a special operation” in Ukraine.”I myself take L-thyroxine as I have issues with my thyroid gland so I’m taking it daily and I worry about it,” Valentina, a Moscow resident, said. “That’s why I bought a supply of it for a couple of months in advance as I’m worried if I will be able to find it in pharmacies later. People are asking for it everywhere.”Sales data gathered by analytical company DSM Group for the daily Vedomosti newspaper showed on Thursday that Russians had bought 270.5 million medicinal items in pharmacies from Feb. 28 until March 13 for 98.6 billion roubles ($1.04 billion).That was almost comparable to the sales data for the entire month of January when Russians bought 288 million items in pharmacies for 100 billion roubles. The latest data, which did not name specific brands, showed an upsurge in demand for foreign-produced pharmaceuticals with demand for Russian-made products growing too. In particular, it showed sharply increased demand for anti-depressants, sleeping pills, insulin, cancer and heart drugs, hormones and contraceptives. “It was fear,” Sergei Shulyak, general director of DSM Group, the company that gathered the data, told Reuters. “The first fear was that everything could get more expensive and the second fear was that medicines they need won’t be available in some time. Those fears moved people. They stood in lines at pharmacies and bought everything.” Shulyak, who said what he called “hysteria” had taken hold, said there was now a temporary shortage of some medicines, but said he expected the situation to stabilise in time with Russian manufacturers still able to produce generic drugs and many foreign producers continuing to supply Russia even if their products were now being sold at a higher price. He warned however that worsening ties with the West meant some Russian drug producers were having problems sourcing ingredients they needed to make their products. Some Russians said they were unfazed by the panic.”There might be some (shortages) especially if the medicine is imported, but I think it will all come back because politics is politics, economics is economics,” said Vladimir, a Moscow resident. “They (the drug manufacturers) all need to sell, they all need to gain profit, so it’ll all be back.” ($1 = 95.0000 roubles) More