A surprising decision by the Central Bank to close the system for selling foreign exchange for personal purposes amid the continuing rise in the exchange rate in the parallel market and repeated citizens’ complaints about the mechanism for obtaining their foreign currency allocations, which opens the door to questions about the reasons and repercussions of this decision on the economy and the citizen.
System shutdown
The Central Bank announced through the registration window for the system of selling foreign exchange for personal purposes,
The system will be closed until March 31, indicating that the quota allocated to all commercial banks for the month of March has been reserved.
Humiliation of citizens
Member of the Finance Committee of the Supreme Council of State, Ali Al-Suwaih, said in a statement to Al-Raed that closing the system is a humiliation for citizens, adding that the problem lies in who controls the foreign exchange reservation system.
Tampering and manipulation
As for the banking and economic expert, Ibrahim Al-Haddad, he considered the closure of the system absurd and a manipulation of citizens’ feelings, indicating in a statement to Al-Raed that it would exacerbate the severity of the economic and monetary crisis in the country, increase the price of the dollar, and generate fears among merchants and citizens.
good decision
Meanwhile, Mukhtar Al-Jadid, professor of economics at the University of Misrata, believes that the decision to close the reservation system at the Central Bank until the end of March is good, in two respects.
He explained, according to his Facebook page, that the first aspect is that there is an improvement in the system’s performance to the point that the allocations for the month of March were exhausted in three days, while the second is that what was reserved exceeds half a billion dollars, and this value will enter the parallel market in the coming days in succession and have a positive impact. On the exchange rate.
Increase spending
The unexpected closure of the system comes amid apparent fears of depleting foreign exchange reserves without achieving its purpose of calming the exchange rate.
On February 27, the Governor of the Central Bank of Libya, Al-Siddiq Al-Kabir, said that the government’s continued increase in the level of public spending significantly, reaching the level of 165 billion dinars in 2023, and the existence of parallel spending from unknown sources; It contributed to the increase in the volume of demand for foreign exchange despite the Central Bank increasing the volume of supply by $5 billion compared to 2022.
Counterfeit currency
On the other hand, the Central Bank attributed the continued fluctuation of the dinar exchange rate to the counterfeiting of the 50-dinar currency through illegal networks working to withdraw the supply of foreign exchange and strike the Libyan dinar.
The Central Bank announced, in a letter addressed to the members of the Finance Committee of the House of Representatives, on February 25, its intention to withdraw the 50 dinar note in its various issues from circulation for fear of the high and continuing rates of counterfeiting, the widening of the scope of its circulation, and the inability of employees to distinguish it.
The Central Bank revealed the existence of three issues of 50 dinars in circulation in the markets, a denomination issued by the Central Bank in Tripoli, a second by the Benghazi centers, and a third of unknown origin.
urban roof
In a decision considered the first of its kind, the Central Bank adopted pre-determined allocations not to exceed each month of foreign exchange sales for personal purposes, which reflects its continued fear of depletion of hard currency.
Study the size of the demand
The Central Bank had referred to this procedure, in a previous message on the 20th of last February, when it announced the formation of a committee to study the volume of demand for foreign exchange and approve the banks’ requests for credits and personal items, including requests from public bodies, which necessarily means subjecting the bodies’ requests to… The government’s general foreign exchange requirement requires achieving a balance between the volume of demand and the volume of available revenues.
The Central Bank indicated at the time that the formation of the committee was based on a memorandum presented by Deputy Governor Marai Al-Barasi, headed by the Director of Banking Supervision and five members, including the accounts directors in Benghazi and Tripoli.
On February 2, the Central Bank launched a reservation platform for purchasing foreign exchange for personal purposes with a maximum value of $4,000 or its equivalent in other currencies, giving banks the authority to decide on requests to sell foreign exchange for personal purposes using the national number of every Libyan citizen of age. 18 years and above after meeting the requirements stated on the foreign currency reservation platform for personal purposes.
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2024-04-25 17:29:45
Market Turmoil: Caterpillar’s Second-Quarter Sales Forecast Sends Shares Tumbling
Caterpillar Inc. Reports Decline in Machinery Sales
Caterpillar Inc. recently released its first-quarter results, indicating a decrease in machinery sales compared to the previous year. The company also issued a warning that this downward trend is expected to persist into the second quarter.
Market Reaction
Following the announcement, shares of Caterpillar experienced a significant drop of up to 9.1% in New York, marking the largest intraday decline in four years. Despite surpassing analysts’ expectations in terms of adjusted profit, the company noted a decline in sales within its construction and resource industries divisions. Overall revenues also displayed weakness, particularly outside of North America.
Economic Bellwether
Caterpillar is widely recognized as an economic indicator due to its role in providing machinery for various industries worldwide. The company’s performance often reflects the health of sectors such as mining and construction. In the first quarter, Caterpillar reported adjusted earnings of $5.60 per share, exceeding the average estimate of $5.13 per share by analysts.
Industry Analysis
Despite better-than-expected profitability, concerns arose regarding a significant dealer inventory build as retail sales declined. This development may impact production schedules moving forward. Caterpillar, a major player in the heavy machinery sector, has consistently outperformed expectations in recent years, demonstrating resilience in challenging market conditions.
Future Outlook
CEO Jim Umpleby expressed optimism during the earnings call, highlighting expectations for sustained demand across various markets. The company reaffirmed its guidance for 2024, anticipating sales and revenues to remain consistent with the previous year’s record levels. However, challenges such as moderating demand in manufacturing and non-residential construction pose obstacles to growth.
Regional Trends
The manufacturing landscape in regions like Asia and Europe has shown signs of moderation, impacting machinery manufacturers like Caterpillar. Despite this, increased industrial activity in the US and China offers potential opportunities for growth in the near future.
Financial Performance
In the latest first quarter, Caterpillar reported sales and revenues of $15.8 billion, slightly lower than the same period in 2023. Strong performance in North America has helped offset weaknesses in other regions, with the energy and transportation segment being the only area to experience a 7% increase in sales and revenues.
Conclusion
In conclusion, Caterpillar’s recent financial results reflect a mixed performance, with challenges in certain markets offset by strengths in others. The company remains optimistic about future prospects but acknowledges the need to navigate evolving economic conditions.
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Market Turmoil: Caterpillar’s Second-Quarter Sales Forecast Sends Shares Tumbling
Gold bar bidding ‘sold’ up to 80%, experts propose solutions to ‘exit goods’
Economic expert Ngo Tri Long also said that world gold prices fluctuate and are difficult to predict. As for gold trading units, they usually buy as much as they sell, but they do not speculate in gold. Just like in 2013, the first auctions were always exploratory and cautious, the number of winning bids was not high… so this year’s auction is the same and this is not a surprise.
I believe that gold bidding is only a temporary solution, temporarily solving the immediate demand, but I would like to share with you VietNamNet, Economic expert Dinh The Hien assessed that gold auctions are a safe solution to increase supply, only those who pay a higher price will sell, ensuring the gold price is close to the market price.
However, according to Mr. Hien, buying businesses will also have certain risks, including the case of being able to buy at an auction price lower than the market price.
“At any time, the price of gold can turn down; while the real demand for buying at high prices is still a question mark if the bidding business wins. The difference between domestic and international prices is also still high… Therefore, only businesses with large resources and can count on the source of customers will boldly bid,” Mr. Hien said.
Need to change
If the State Bank still intends to continue bidding, the Vice Chairman of the Vietnam Gold Business Association suggested that the reference price should be SJC’s price the night before or at the beginning of the day, which could be equal to or lower than SJC’s buying price. company.
Along with that, the minimum bidding volume should be adjusted to half as prescribed at the auction on April 23. This will attract more units to participate.
Meanwhile, economic expert Ngo Tri Long noted that it is necessary to see forecasts of the world and domestic economic situation as well as forecasts of gold price fluctuation trends. In particular, it is necessary to know how much gold is currently in demand.
“We should still continue bidding in the coming time, but we need to find out how much demand is there? Each bidding session, the number offered for bidding needs to be calculated more reasonably to attract more participating units. At the same time, it is necessary to regulate the minimum price but also need to regulate the maximum selling price, not selling beyond the prescribed ceiling price when winning the bidding,” Mr. Long said.
However, the expert also said that using bidding methods can only solve urgent problems. Therefore, it is also necessary to consider long-term measures. Accordingly, Mr. Long proposed that the long-term solution is to quickly change Decree 24. At the same time, in addition to managing physical gold, attention should be paid to new account gold, futures gold, gold certificates… in accordance with international practices, reducing price differences and complying with market rules.
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Gold bar bidding ‘sold’ up to 80%, experts propose solutions to ‘exit goods’