Aurelia Butler

OTTAWA (Reuters) -The Bank of Canada said on Friday that Deputy Governor Lawrence Schembri will retire effective June 17, 2022 and, at that time, the Governing Council will return to its usual six-person complement.Schembri, who joined the central bank in 1997 and then Governing Council in 2013, is the second-longest serving deputy governor.”Larry has worked with dedication to this institution, and to Canadians, for more than 25 years,” Governor Tiff Macklem said in a statement. “His contributions to central banking, here in Canada and internationally, have been innumerable.”Since 2016, Schembri has been tasked with the oversight of the Bank’s analysis of domestic economic developments. Deputy Governor Sharon Kozicki will take over that file after April’s quarterly forecasts, the central bank said.Senior Deputy Governor Carolyn Rogers (NYSE:ROG) will take on shared oversight of the central bank’s financial system activities with Deputy Governor Toni Gravelle.The council was temporarily expanded to seven after both Kozicki and Rogers joined last year.Bank of Canada officials will meet on March 2, when they are widely expected to hike interest rates for the first time in more than three years. Money markets are betting on a 25-basis-point increase to 0.50% from current record low 0.25%. [BOCWATCH]The Canadian dollar was trading 0.4% lower at 1.2750 to the greenback, or 78.43 U.S. cents. More

WASHINGTON(Reuters) – U.S. home sales unexpectedly increased in January, but investors paying in cash are squeezing out first-time buyers from the housing market amid record low inventory and higher prices.The surge in sales of previously owned homes last month reported by the National Association of Realtors on Friday also reflected buyers rushing in to close contracts in anticipation of mortgage rates rising further. Investors made up the largest share of transactions in six years last month. Mortgage rates have climbed to levels not seen since 2019 as the Federal Reserve is expected to start increasing interest rates next month to tame soaring inflation. Economists are anticipating as many as seven rate hikes this year.”This is the rush to get in before borrowing costs move higher,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto. “Unfortunately, first-timers are being priced out of the increasingly expensive purchase.”Existing home sales jumped 6.7% to a seasonally adjusted annual rate of 6.50 million units last month. Sales rose in all four regions, with strong gains in the Midwest, the most affordable region. Sales soared 9.3% in the densely populated South, which is experiencing an influx of residents from other regions as companies embrace remote work.Economists polled by Reuters had forecast sales decreasing 1.0% to a rate of 6.10 million units. Home resales, which account for the bulk of U.S. home sales, fell 2.3% on a year-on-year basis. Strong demand for housing against the backdrop of a strengthening labor market and massive savings is outstripping supply, curbing sales. Builders have been unable to significantly ramp up construction because of shortages and higher prices for inputs like softwood lumber for framing as well as cabinets, garage doors, countertops and appliances.According to a report this week from the National Association of homebuilders, delivery of these products was taking “months,” raising construction costs and delaying projects. The Commerce Department reported on Thursday that the backlog of homes approved for construction but yet to be started raced to a record in January.Stocks on Wall Street were trading lower amid building tensions in Ukraine. The dollar rose against a basket of currencies. U.S. Treasury prices were higher.HOUSING SHORTAGETight supply is keeping house prices elevated. The median existing house price increased 15.4% from a year earlier to $350,300 in January. Sales remained concentrated in the higher price brackets, where houses are less scarce. Sales of homes $250,000 and below, the much sought after price category, continued to decline. First-time buyers accounted for 27% of sales last month, compared to 33% a year ago. Rising mortgage rates could make home buying even less affordable for this group.Individual investors or second-home buyers, who make up many cash sales, bought 22% of homes. That was the largest share since October 2015 and was up from 15% a year ago. Investors are renovating, and either reselling or renting the homes to take advantage of the hot housing market. All-cash sales made up 27% of transactions compared to 19% last January.There were a record-low 860,000 previously owned homes on the market last month, down 16.5% from a year ago. At January’s sales pace, it would take an all-time low 1.6 months to exhaust the current inventory, down from 1.9 months a year ago.A six-to-seven-month supply is viewed as a healthy balance between supply and demand. In January, houses typically remained on the market for 19 days, down from 21 days a year ago.Seventy-nine percent of homes sold last month were on the market for less than a month. The 30-year fixed-rate mortgage averaged 3.92% in the week ending Feb 17, the highest since May 2019, according to data from mortgage finance agency Freddie Mac (OTC:FMCC). That was up from 3.69% in the prior week. Economists expect rising mortgage rates will contribute to slowing sales this year. “Resilient demand and strong income gains will underpin the housing market, but limited supply and declining affordability from both higher prices and sharply higher mortgage rates will constrain the pace of sales,” said Nancy Vanden Houten, lead U.S. economist at Oxford Economics in New York. More

WASHINGTON (Reuters) -The World Bank’s management has approved a plan to use some $1 billion in a frozen Afghanistan trust fund for education, agriculture, health and family programs, according to a bank paper and two sources, in what would be a major boost to efforts to ease the country’s worsening humanitarian and economic crises. The plan, outlined in the paper seen by Reuters on Friday, is to bypass sanctioned Taliban authorities by disbursing the money in the World Bank-administered Afghanistan Reconstruction Trust Fund (ARTF) through U.N. agencies. It is set to be discussed by the World Bank board on March 1, the sources familiar with the plan told Reuters, speaking on condition of anonymity. Donors to the fund would then need to give approval for the release of any money. The move would follow a successful disbursement of $280 million from the same trust fund to the World Food Program (WFP) and U.N. children’s agency UNICEF to support nutrition and health in Afghanistan over the past few months. The World Bank paper says the plan is to “make available just over US$1 billion in ARTF resources in calendar year 2022.” Recognizing that the situation remains fluid, the plan aims for flexibility by making four disbursals of a total $600 million and the remainder “on a priority basis” for the rest of the year.The aim “is to protect the vulnerable, help preserve human capital and key economic and social institutions and reduce the need for future humanitarian assistance,” according to the World Bank paper. It called for the fund to be used for food security, health and education programs.U.N. Secretary-General Antonio Guterres last month called for the release of the remaining $1.2 billion in the fund to help Afghanistan’s people survive the winter, stressing: “Time is of the essence.”‘ACCESS AND EQUITY’The United Nations is warning that nearly 23 million people – about 55 percent of the impoverished country’s population – are facing extreme levels of hunger, with nearly 9 million at risk of starvation.Billions of dollars in Afghan central bank reserves, the World Bank-administered trust fund and foreign financial aid were frozen to keep it out of Taliban hands. The Islamist group seized power in August as foreign troops left after Afghanistan’s most recent war, which lasted 20 years. Graeme Smith, senior consultant for the International Crisis Group think tank, said the World Bank plan would provide urgently needed money while circumventing the Taliban, whose leaders are under U.S. and U.N. sanctions.”This helps to unstick a big chunk of money. It will get us rolling forward,” he said, adding that further efforts were needed to unfreeze the central bank assets.The World Bank’s plan sets “minimum conditions for access and equity” aimed at ensuring girls are allowed in schools, female teachers can work, women are included in community councils, women-headed households receive food aid and female health workers are allowed to work.It calls for some $150 million to be distributed through UNICEF for stipends to over 200,000 teachers who have not been paid for more than six months. Another $100 million would be earmarked to improve community resilience, $150 million to $200 million for food security, and $150 million for health programs.The United States last week announced plans to free up half of the $7 billion in frozen Afghan central bank assets at the Federal Reserve Bank of New York to help the Afghan people. The rest was held to potentially satisfy terrorism-related lawsuits against the Taliban. More