China’s foreign reserves shrank last year for the first time since 1992, ending a 22-year ascent that began under former top leader Deng Xiaoping and accelerated with presidents Jiang Zemin and Hu Jintao.
The currency hoard plunged by $513 billion in 2015 to $3.33 trillion as of Dec. 31, the People’s Bank of China said Thursday. It was dragged down down by factors including central bank intervention to prop up the yuan after an August devaluation roiled global markets and capital flight from the world’s second-largest economy, analysts said.
Reserves were swelled for more than two decades by foreign capital pouring in to an economy expanding at an average 10 percent clip a year and a trade surplus fueled by exporters seizing market share overseas. Now policy makers are fighting to hold up the currency amid slower growth and plunging stocks, burning through assets to reduce yuan volatility.
“The switch from reserve accumulation to decline is a major turning point in the history of Chinese development,” said Freya Beamish, a London-based economist at Lombard Street Research Ltd. “It signifies a reversal of China’s role in the U.S. Treasuries market from buyer to seller. China is still a large excess saver, but it’s now reducing those savings and the foreign-exchange reserve decline is a result of that.”
The yuan sank to a five-year low on Thursday, weakening as much as 0.6 percent to 6.5956 per dollar, as the PBOC set the reference rate at an unexpectedly weak level, a signal that it’s more tolerant of depreciation as the expansion slows.
With the slowest economic growth in a quarter century, a long-held expectation that the yuan is a one-way appreciation bet has given way to a median forecast that the currency will depreciate to 6.64 per dollar this year.
Nigeria Receives £4.2 Million Looted By James Ibori
The government of the United Kingdom has repatriated the sum of £4.2million that was looted by associates and family members of the convicted former governor of Delta State, James Ibori.
The Attorney-General of the Federation and Minister of Justice, Mr. Abubakar Malami, SAN, on Tuesday confirmed the receipt of the looted fund in a statement he made available to newsmen in Abuja.
In the statement signed by Malami Special Assistant on Media and Public Relations, Dr. Umar Gwandu, the Minister of Justice disclosed that the naira equivalent of the amount was credited into the designated Federal Government account on May 10, 2021.
The AGF had earlier signed a Memorandum of Understanding for the repatriation of the loot fund on behalf of the Federal Government of Nigeria.
According to him, “the development was a demonstration of the recognition of reputation Nigeria earns through records of management of recovered stolen Nigerian stolen in the execution of public oriented projects”.
AfDB, European Bank To Bridge $2.5tn Africa’s Financing Gap
The African Development Bank Group and the European Bank for Reconstruction and Development signed a Memorandum of Understanding on Monday to promote sustainable private sector development in Africa.
In a statement issued by its Communication and External Relations Department, the AfDB said, “The MoU will help catalyse new sources of financing to help bridge the $2.5tn annual financing gap for development in Africa.
“This gap requires that development finance institutions work in partnership.”
The bank stated that under this partnership, the AfDB and the EBRD would capitalise on their respective
expertise and experience, with a particular focus on climate change, green and resilient infrastructure and capital markets development.
“They will also work on improving business environments, bolstering the real economy and mobilising private sector investment,” the AfDB stated.
It observed that COVID-19 was threatening progress made towards the United Nations Sustainable Development Goals and was exacerbating the debt vulnerability of many African countries.
The bank stated that sustainable private sector development would be key to recovery and prosperity across the continent.
AfDB’s President, Akinwumi Adesina, after signing the memorandum with his counterpart, EBRD President,
Odile Renaud-Basso, was quoted as saying, “The new partnership agreement between our two institutions will pave the way for us to do more together, especially in supporting the growth of Africa’s private sector.
“The impact of COVID-19 on government resources is huge and we need to mobilise more private resources to help African countries build back stronger.”
On his part, Renaud-Basso, said, “The COVID-19 crisis has made the need for better and ever closer collective action even more urgent.
“Collaboration between the EBRD and the African Development Bank has grown from strength to strength over the years in the region.”
Despite Rising Debt Profile, President Buhari Seeks New N2.342T External Loan
President Muhammadu Buhari, on Tuesday, urged the Senate to approve a new external loan of N2,343,387,942,848.00, about $6.183billion, for the Federal Government to finance the 2021 budget deficit.
Senate President Ahmad Lawan read Buhari’s letter of request on the floor of the Senate at plenary.
Last Month, Investorsking recalled that there was a controversy when Edo State Governor, Godwin Obaseki had raised concerns over the financial trouble Nigeria might find herself due to the continuous rising debt profile.
In a recent report carried out by PWC, it was reported that:
“Actual debt servicing cost in 2020 stood at N3.27 trillion and represented about 10 percent over the budgeted amount of N2.95 trillion. This puts the debt-to-revenue ratio at approximately 83 percent, nearly double the 46 percent that was budgeted.
“This implies that about N83 out of every N100 the FG earned was used to settle interest payments for outstanding domestic and foreign debts within the reference period. In 2021, the FG plans to spend N3.32 trillion to service its outstanding debt. This is slightly higher than the N2.95 trillion budgeted in 2020”.
According to DMO Nigeria’s total public debt as at December 31, 2020, was N32.915 Trillion.
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