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IMF Approves Chinese Yuan As Reserve Currency

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IMF Approves Chinese Yuan As Reserve Currency

 

International Monetary Fund’s executive board, which represents 188 member nations have decided the Yuan meets the standard of being “freely usable” after years of rejection.

The Chinese Yuan will now join the Euro, Dollar, Pound and Yen as one of IMF’s Special Drawing Rights basket. The organization managing director, Christine Lagarde made this known on Monday in a statement.

The addition is expected to take effect on Oct. 1, 2016. The Yuan would weigh 10.92 percent of the basket, while the U.S dollar will represent 41.73 percent, Euro 30.93 percent, Yen and British Pounds would weigh 8.33 and 8.09 percent respectively.

The IMF reviews the composition of the basket every five years. The fund rejected the Yuan for inclusion during the last review, in 2010, saying the currency didn’t meet the necessary criteria.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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CBN Reduced Interest Rate by 100 Basis Points to 11.5%

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CBN-Led Monetary Policy Reduces Benchmark Interest Rate to 11.5%

The Central Bank of Nigeria led Monetary Policy Committee (MPC) on Tuesday lowered the official interest rate by 100 basis points from 12.5 percent to 11.5 percent to stimulate growth and ease access to funds for businesses in the real sector.

The MPC had refused to reduce the interest rate from 12.5 percent despite the COVID-19 negative impacts on businesses and the economy at large. However, the change in tone may not be unconnected to the severity of Nigeria’s economic situation following a series of negative economic data from the National Bureau of Statistics (NBS).

Nigeria’s economy contracted by 6.10 percent in the second quarter while the unemployment rate rose to 27.1 percent or 21.8 million people and inflation hovering above 13 percent. This was after the apex bank adjusted the nation’s exchange rate twice to accommodate falling foreign reserves and discourage capital flight by most foreigners looking to exit the economy as uncertainties jumped to a record-high.

Still, with fast falling consumer spending amid huge unemployment numbers, the new monetary policy rate may not be effective as businesses need demand to thrive, a situation Nigeria may not experience in the near-term given recent increases in electricity tariff, petrol pump price and Value Added Tax.

Again, while Nigerians are being taxed to death and forced to pay more even with the decline in the value of the Naira, the same people are expected to patronise and sustain businesses without jobs.

The committee retains Cash Reserve Ratio at 27.5 percent while the liquidity ratio stood at 30 percent and the asymmetric corridor from +200/-500 around the MPR.

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Healthcare Startups Raised $111.4bn in Total Funding, a 34% Jump Year-on-Year

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Startups in the Healthcare Sector Raises $111.4bn in Funding

The coronavirus pandemic put enormous pressure on the healthcare industry, forcing pharmaceutical giants and institutions to roll out clinical trials for a COVID-19 vaccine at breakneck speed. But behind the COVID-19 outbreak as the main healthcare issue in 2020, large health systems and venture capital firms continued investing millions in startups whose products could bring critical healthcare delivery innovation.

According to data presented by Buy Shares, UK, the total amount of funds healthcare startups raised over time hit $111.4bn in September, a 34% jump year-on-year.

Total Funding Amount Surged by 162% in Three Years

In 2015, healthcare startups worldwide raised $5.4bn in funding rounds, with the cumulative value of investments reaching $24.4bn that year, revealed the CrunchBase data. During the next two years, this figure surged by more than 68%, reaching $45.5bn in the fourth quarter of 2017.

Statistics show that 2018 delivered a $19.2bn of investments into healthcare startups, while the cumulative funding value rose to $64.7bn. In 2019, the total value of raised funds jumped by $24.7bn to $89.4bn, the most significant increase year-on-year.

The Crunchbase data revealed the first quarter of 2020 delivered $7.1bn worth investments into healthcare startups, a 51% increase year-on-year. Between April and June, the cumulative value of funding rose to $103.7bn and continued growing. Statistics show the total funding amount healthcare startups raised over time surged by 162% in the last three years.

Analyzed by geography, North America represents the leading region with $72.4bn of investments in healthcare startups. The US companies raised more than 97% of that amount, with California and San Francisco as the leading hubs. Asian startups hit $25.5bn in total funding, ranking as the second-leading region globally. European healthcare startups follow with $12.8bn worth funding rounds.

Three Largest Funding Rounds in 2020 Worth Over $2bn

The CrunchBase data also revealed the three largest healthcare startup funding rounds this year hit over $2bn value.

Last month, JD Health, the healthcare unit of Chinese e-commerce giant JD.com, raised more than $830 million from Hillhouse Capital in Series B funding, the largest investment in 2020. The company announced it would use this capital to further strengthen its pharmacy supply chain capabilities and explore additional healthcare services opportunities in the broader healthcare sector.

In July, Seattle-based biotech startup Sana Biotechnology raised $700 million in initial financing that will be used to advance the company’s discovery and development programs that deliver engineered cells as a treatment for different types of diseases.

Statistics show that Lyell Immunopharma`s $493 million worth Series C funding round represents the third-largest healthcare startup investment in 2020. Last year, the San Francisco-based company joined forces with GlaxoSmithKline plc to develop new technologies to improve cell therapies for cancer patients.

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FinCEN Leaks: Tone Down The Rhetoric and Focus on Improving Banking Checks

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Banks Must do More To Prevent Financial Crime

The FinCEN leaks underscore that banks must do much more to prevent financial crime, but also that a clear distinction must be made between legal and illegal financial practices.

This is the message from Nigel Green, the CEO and founder of deVere Group, one of the world’s largest independent financial advisory and fintech organisations, as more than 2,500 documents from the U.S. Financial Crimes Enforcement Network raise concerns about what banks’ clients might be doing.

Mr Green says: “These documents show how some of the world’s biggest banks have seemingly turned a blind eye to criminals moving dirty money around the world through their systems.

“For me, this highlights once again that these major financial institutions need to do much more and with vigour to help prevent high-level financial crime, which is a serious global problem.

“It brings up the issues of independent verification and conflict of interest within banks. Should a bank with a financial interest be allowed to make the decision on moving such large figures?

“A bizarre anomaly is that it appears that smaller amounts are often questioned, but larger figures often appear not to be.”

He continues: “Whilst banks must, evidently, do much more in this area, it is also important to make clear the distinctions between legal and illegal financial practices.

“A failure to do so muddies the waters and makes combatting financial crimes harder.

“For instance, some high-profile individuals have been accused of wrongdoing when their actions and decisions were legal at the time.

“The notion that they are ‘getting away’ with investments that were perfectly legal when they were made is, frankly, ludicrous and wholly unhelpful.

“Knowing this, some have accused these individuals of being ‘immoral’. However, the law is not supposed to be a moral issue.

“It might very well be the case that the laws need to be overhauled, but until that point, the witch-hunt must be called-off.”

The deVere concludes: “Let’s tone down the rhetoric and focus on the serious issues of stamping out financial crime by implementing more robust checks and balances inside the banking system.”

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