Mark Carney warned his colleagues at major central banks against getting embroiled in a currency war, saying targeting weaker exchange rates only causes problems for the world economy.
In a hard-hitting speech at the start of a two-day gathering of Group of 20 finance ministers and central bankers in Shanghai, the Bank of England governor said nations can’t simply export their problems through currency depreciation and that there is “no free lunch.”
“For monetary easing to work at a global level it cannot rely on simply moving scarce demand from one country to another,” Carney said in prepared remarks for his speech. “For the world as a whole, this export of excess saving and transfer of demand weakness elsewhere is ultimately a zero sum game.”
Weak growth and muted inflation pressures have pushed central banks around the world to cut interest rates below zero. While G-20 meetings have habitually agreed on the need to refrain from competitive devaluations, it’s become a more pressing issue with about a quarter of global output now produced in economies where rates are, as Carney put it, “literally through the floor.”
Investor concern about the ability of monetary authorities to boost demand has helped spur market turmoil this year. Carney said that while it’s a “myth” that central banks are out of monetary-policy ammunition, G-20 leaders need to urgently co-ordinate supply-side initiatives as they are falling short on previous pledges.
“Since the start of the year, risk sentiment in financial markets has deteriorated sharply, stemming in large part from a renewed appreciation of weak medium-term global growth prospects accompanied by marked downside risks,” Carney said. “The global economy risks becoming trapped in a low growth, low inflation, low interest-rate equilibrium.”
The Bank of Japan adopted negative interest rates this year and the European Central Bank has indicated it may ramp up its stimulus next month, with one option being cutting its deposit rate further below zero. In the U.K., the BOE’s benchmark has been at 0.5 percent for almost seven years, though some officials have indicated they’d bewilling to push it lower if risks warranted such a move.
The BOE governor also said that there are implications of targeting a weaker exchange rate.
“To the extent it pushes greater savings onto the global markets, global short-term equilibrium rates would fall further, pulling the global economy closer to a liquidity trap,” Carney said. “At the global zero bound, there is no free lunch.”
Boko Haram Kills Rice Farmers in Borno State, Northeast Nigeria
Rice farmers were killed on Saturday morning in the Northeast Nigeria by suspected Islamist militants, Boko Haram, according to a Reuters Report.
The report also noted that 30 of the people killed were beheaded while over a dozen others were still missing.
However, resident of the Zambarmari Village where the attacks took place said a total of 70 people were feared dead.
Another resident and Amnesty International were quoted as saying at least 10 women were among those missing.
In another statement by Edward Kallon, the United Nations’ humanitarian coordinator in Nigeria, it was armed men on motorcycles that led the brutal attack on civilians harvesting their fields.
“Armed men on motorcycles led a brutal attack on civilian men and women who were harvesting their fields,” Edward Kallon stated.
“At least 110 civilians were ruthlessly killed and many others were wounded in this attack,” he added, noting that several women are believed to have been kidnapped.
“The incident is the most violent direct attack against innocent civilians this year. I call for the perpetrators of this heinous and senseless act to be brought to justice,” Kallon said.
On Sunday, Governor Babaganan Umara Zulum of Borno State, who was at the burial told journalists that at least 70 farmers were killed on Saturday.
The Governor, therefore, called on the Federal Government to recruit more Civilian Joint Task Force members, Soldiers and civil defence fighters to protect farmers in the region.
He added that people are facing desperate choices.
“In one side, they stay at home they may be killed by hunger and starvation, on the other, they go out to their farmlands and risk getting killed by the insurgents,” he said.
In The Fight Against Corruption, No Individual is Bigger Than The State – Buhari
In response to the suspended acting EFCC Chairman, Ibrahim Magu, President Muhammed Buhari, lamented that the anti-corruption war becomes endangered “when persons entrusted with the responsibility of that magnitude become suspects themselves.”
Buhari, whose vision is to put an end to corruption in Nigeria, believed that every aspect of the nation’s life is enshrined in corruption and it’s of major concern when leaders of institutions saddled with the mandate to fight the menace are found in the waves of the corruption they claimed to be fighting.
This act is a great abomination not only because it strikes at the root but it also trivialises and undermines the anti-corruption crusade itself, the President explained.
He further said that in a bid to put an end to this great abomination, he had set up Ayo Salami Panel to unravel the mystery behind the mystique of Magu’s alleged involvement in corruption that his administration is fighting.
Buhari said that his administration is ready and willing to go all out in the fight against corruption, and no one is too big nor above the law to become a victim of anti-graft’s sledgehammer.
The president said, “However, the stark reality of widespread corruption becomes poignant when allegations of corruption touch on the leadership of an institution set up by law to coordinate and enforce all economic and financial crimes.
“It is an abomination that strikes at the root and undermines the government’s anti-corruption programme.
“It was in response to the serious allegations against the Economic and Financial Crimes Commission that I set up a panel headed by the Honourable Justice Isa Ayo Salami, retired President of the Court of Appeal, via an Instrument dated 3rd July 2020 pursuant to the Tribunals of Inquiry Act (Cap T21, LFN, 2004).
“We recognise that there are more grounds to cover in the war against corruption, and we are prepared to go out to possess those lands by cutting off any stream that nourishes the seed of corruption and supports its growth.
“Let it be known that in the fight against corruption, no one is too big to tackle, as no individual is bigger than the Nigerian State!”
In Search For The New EFCC Chairman, Justice Ayo Salami Panel Advises Buhari to Look Outside The Police Force
Justice Ayo Salami’s panel advised President Muhammadu Buhari to look outside the Nigerian Police Force for the new Chairman of the Economic and Financial Crimes Commission (EFCC).
A credible source confirmed that President Muhammadu Buhari may have decided to follow the panel recommendation to avoid a similar fate to that of Magu, the former chairman.
The source also confirmed that the panel recommendation was a result of sleaze allegations against suspended acting Chairman, Ibrahim Magu. Also, that search team would be constituted in the next few days to slim down the possibilities of finding the right candidate to bring into reality the President’s vision of a corrupt-free anti-graft agency.
The source further confirmed that “the sleaze and abuse of office allegations against Magu, a commissioner of police, were overwhelming,” and that he may be put on trial.
As advised by the panel, the new EFCC chairman should be in interim position for two years.
It was suggested that the recommendation from the Justice Ayo Salami panel might have pinned Magu, according to Femi Adesina, the presidential spokesman, he advised president Buhari to consider looking into other law enforcement or security agencies, as well as considering important and diligent staff of EFCC in his plans to appoint the next EFCC chairman, as s provided in the EFCC Establishment Act of 2004.
Following the Justice Ayo Salami panel recommendation, Salami said “Your Excellency, permit me to say that four successive chairmen of the EFCC from inception have been drawn from the police. Therefore, in appointing a new chairman of EFCC, consideration should be given to candidates from other law enforcement or security agencies and qualified core staff of EFCC as provided in the Economic and Financial Crimes Commission (Establishment Act 2004).
“It is also important to point out that at the moment, 970 policemen (114 drivers, 641 mobile policemen and 215 operations), are on secondment in the EFCC.
“Therefore, an exit plan for the disengagement of the police and other personnel within two years from now should be considered. This will address the issue of non-promotion of core staff for over nine years.
“Your Excellency, our thinking here is that whoever you are appointing other than a core EFCC staff, should be in transitional capacity of two years during which period, the arrangement would be made for the appointment of any of the core staff who has been commended by National Crime Agency, UK and other international law enforcement for their professionalism”.
Justice Ayo Salami appreciated the president for giving members of the panel an avenue to serve the country.
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