December 23rd, 2009 - Modest rate cut Hungary’s central bank
The Hungarian National Bank reduced its base rate by 25 basis points, which was less than the expected 50 basis points. Hungary’s central bank, Magyar Nemzeti Bank, cut its key interest rate from 6.50% to 6.25% in order to stabilize the economy as the circumstances are rather unstable and to control inflation , which is at the moment higher than the central bank’s target, matching the rate of June 2006. So far in 2009, the Hungarian National Bank has reduced the key interest rate by 375 basis points, including the recent reduction.
Hungarian National Bank
The Hungarian Forint climbed to the highest rate of 190.59 in 5 days versus the Greenback by 8.05 a.m. ET, which is a 1.3% rise in comparison to Friday’s closing rate of 193.05.
The lower than expected rate reduction implicates that the Hungarian National Bank could end its monetary easing sooner than experts had predicted. However, it’s likely that additional monetary measures will be taken in the next few months, according to Capital Economics. “We still believe that the conditions for interest rates priced into the market are too high,” Capital Economics declared. The market outlook for the base rate to climb to 6.5% in the third and fourth quarter of next year is not likely considering the volatility in the real economy.
Hungary’s economy
Hungarian inflation leaped from 4.7% in October to 5.2% in November, while the central bank medium term target is at 3%. In the meantime, core inflation declined slightly from 4.9% in October to 4.8% in November. The Magyar Nemzeti Bank estimates an inflation rate of 3.9% in 2010 and 4.2% in 2009. From July through September, the Hungarian economy shrank by 1.8%, as it contracted by 1.9% in the second quarter. Hungary’s economy will shrink by 6.7% in 2009, while it will contract by 0.6% in 2010, according to the Hungarian National Bank.
Improvement
Recently, several components of Hungary’s economy seemed to have become more stable, due to stimulus measures, such as a number of consecutive interest rate reductions. In December, economic conditions in Hungary improved due to a recovery in business and consumer confidence, according to GKI Economic Research. Trade recovered and the pessimistic situation of industrial output improved in October.
25 December 2009
Russia's Central Bank Cuts Refinancing Rate To 8.75% From 9%
December 25th, 2009 - MOSCOW (Dow Jones)--Russia's central bank cut key interest rates Friday for the tenth time this year in an attempt to stimulate lending and turn back the tide of speculative capital that has flooded the ruble in recent months.
The reduction in the refinancing rate, the benchmark to which commercial banks tie their deposit rates, to a record low 8.75% from 9% is effective Monday. Other key rates, such as the one-day repurchase rate on central bank loans, were cut as well.
The reduction in the refinancing rate, the benchmark to which commercial banks tie their deposit rates, to a record low 8.75% from 9% is effective Monday. Other key rates, such as the one-day repurchase rate on central bank loans, were cut as well.
24 December 2009
Deposits vs Commodities 1999 - 2009
The last ten years have been the decade to invest in commodities. Here is the 10 year price increase in commodities since 1999:
The ganjlik 10-year deposit will provide 250% increase, which is the top 5 commodities, without the volatility.
The ganjlik 10-year deposit will provide 250% increase, which is the top 5 commodities, without the volatility.
19 December 2009
Armenia - up to 10% on USD deposits, 9.5% on EUR
Armenia Development Bank offers up to 10% p.a. on USD deposits and 9.5% for EUR.
The AKA-Credit Agricole bank offers up to 9.5% on USD deposits.
Armenia is rated BB- and has a 10% withholding tax on interest.
The AKA-Credit Agricole bank offers up to 9.5% on USD deposits.
Armenia is rated BB- and has a 10% withholding tax on interest.
18 December 2009
Traders bet on Brazil interest rates to rise
Dec 18, 2009 - Brazil Interest Rate Future Yield Rises to Highest in 10 Months.
Traders are increasing bets the central bank will start lifting the benchmark Selic rate from a record low in March as economic growth accelerates.
14 December 2009
My comment on investing with International Bank of Azerbaijan.
The most common question asked to me, is how safe do I REALLY think placing a substantial amount of one's wealth with International Bank of Azerbaijan is. What are the risks that are not enumerated anywhere...
For example:
1. How good is IBA, how risky is it, what could possibly go wrong? How could I lose my money, is the only way to lose money is the bank closing down in full, or is there other ways, default but reopening, just not paying at all, anything?. Moody's, Fitch, S&P, all their comments are medium in simple terms right? Would you personally deposit large sums of money into Azerbaijan banks?
My honest reply is:-
There are two risks with a bank like IBA:
o Individual credit risk - default due to bankruptcy.
Unless the economy totally collapses this is most unlikely. As the Azerbaijan economy is almost exclusively based on oil and gas this is inconceivable. The bank is very well managed, with loans issued on a financial basis, not “to those well connected”. Its loan portfolio well diversified to various industries i.e. construction, manufacturing, trade, consumer consumption, utility development, infrastructure, etc. It’s the National Development bank of the country, which means its main aim is to provide loans which will develop the country’s economy according to the Governments strategy.
Even if the bank makes some bad decisions regarding loans which impair its capital requirements, the international credit rating companies all acknowledge that the State would assist. The State obviously has the financial muscle to assist as it has $25 billion foreign reserves and banks total liabilities are a fraction of that. Throughout history everywhere in the world, the State always assists a National Development bank it controls because if that bank had to collapse, then the entire banking system would collapse. The bank currently has capital tier ratio approximately double the international normal banking requirements, meaning it is financially very strong.
High interest deposit rates in IBA’s case is not due to its frantic requirement for assets. It’s just in Azerbaijan since the Soviet days, high loan rates have remained, and therefore the bank can afford to offer high savings rates.
IBA’s speculative grade rating is due to the ceiling of its Sovereign rating. It’s just defined that no company can be higher than its Sovereign country rating.
o Sovereign risk - prevention of foreign debt repayment by State
It costs Azerbaijan $15 per barrel to extract oil. Anything above that will grow the economy. Even this year when oil collapsed to $30, its economy grew by 4%. Normal growth in past 5 years has been 30% per annum and I expect it to grow by double digits again in the near future. Even if war had to break out with Armenia the conflict would be limited to the outlying territory of conflict, just as in 1992. Political tension is the sole reason for its credit rating grade being one notch below investment grade. With $25 billion foreign reserves and virtually no outstanding bonds, the country can withstand turbulence.
See this report.
RISK REWARD PROFILE
The interest rate of 13% -16% p.a. is a unique arbitrage opportunity which may not be around for long. Russia banks used to offer 11%- 12% for USD deposits in 2001, now they offer rates at 3% - 5%. IBA support of the bank just adds value. Its economy is based on a better commodity than minerals (or property like Dubai!) I am very comfortable to recommend substantial portion of ones assets in Azerbaijan due to its risk-reward profile.
For example:
1. How good is IBA, how risky is it, what could possibly go wrong? How could I lose my money, is the only way to lose money is the bank closing down in full, or is there other ways, default but reopening, just not paying at all, anything?. Moody's, Fitch, S&P, all their comments are medium in simple terms right? Would you personally deposit large sums of money into Azerbaijan banks?
My honest reply is:-
There are two risks with a bank like IBA:
o Individual credit risk - default due to bankruptcy.
Unless the economy totally collapses this is most unlikely. As the Azerbaijan economy is almost exclusively based on oil and gas this is inconceivable. The bank is very well managed, with loans issued on a financial basis, not “to those well connected”. Its loan portfolio well diversified to various industries i.e. construction, manufacturing, trade, consumer consumption, utility development, infrastructure, etc. It’s the National Development bank of the country, which means its main aim is to provide loans which will develop the country’s economy according to the Governments strategy.
Even if the bank makes some bad decisions regarding loans which impair its capital requirements, the international credit rating companies all acknowledge that the State would assist. The State obviously has the financial muscle to assist as it has $25 billion foreign reserves and banks total liabilities are a fraction of that. Throughout history everywhere in the world, the State always assists a National Development bank it controls because if that bank had to collapse, then the entire banking system would collapse. The bank currently has capital tier ratio approximately double the international normal banking requirements, meaning it is financially very strong.
High interest deposit rates in IBA’s case is not due to its frantic requirement for assets. It’s just in Azerbaijan since the Soviet days, high loan rates have remained, and therefore the bank can afford to offer high savings rates.
IBA’s speculative grade rating is due to the ceiling of its Sovereign rating. It’s just defined that no company can be higher than its Sovereign country rating.
o Sovereign risk - prevention of foreign debt repayment by State
It costs Azerbaijan $15 per barrel to extract oil. Anything above that will grow the economy. Even this year when oil collapsed to $30, its economy grew by 4%. Normal growth in past 5 years has been 30% per annum and I expect it to grow by double digits again in the near future. Even if war had to break out with Armenia the conflict would be limited to the outlying territory of conflict, just as in 1992. Political tension is the sole reason for its credit rating grade being one notch below investment grade. With $25 billion foreign reserves and virtually no outstanding bonds, the country can withstand turbulence.
See this report.
RISK REWARD PROFILE
The interest rate of 13% -16% p.a. is a unique arbitrage opportunity which may not be around for long. Russia banks used to offer 11%- 12% for USD deposits in 2001, now they offer rates at 3% - 5%. IBA support of the bank just adds value. Its economy is based on a better commodity than minerals (or property like Dubai!) I am very comfortable to recommend substantial portion of ones assets in Azerbaijan due to its risk-reward profile.
12 December 2009
Australia heading for fourth interest rate rise in Feb 2010
Australia's central bank is likely to raise interest rates again when it next meets in February, say analysts who are all in awe of how strong a comeback the economy is making right now.
11 December 2009
05 December 2009
The simple carry trade - all in one currency
Borrow USD at say 6% with an equity mortgage on your property. Place proceeds on deposit with International Bank of Azerbaijan paying 16.3% p.a. Net 10% per year.
Venezual bonds - 14.5%
December 2009 - Bonds in Venezuela are now yielding 14.5% after Chavez threatened to nationalize some banks. Compare the return on this risk compared to the 16.3% interest from the oil rich State controlled International Bank of Azerbaijan.
03 December 2009
Unicredit Bank in Serbia - 12% AER p.a for EUR
02 December 2009
Deposits vs.Bonds
Investors looking for high yields invariably look at high yield bonds, nicknamed junk bonds. [Reverse convertibles are also an alternative but carry equity risk.]
However high yield bonds are notoriously volatile easily moving by 20% a day in value depending on market or political events. The surprising fact is that in the long-term, say 10 years, these junk bonds only marginally outperform investment grade bonds. When one looks at all the high yield benchmark indices that bonds funds compare themselves to, one sees that these indices yield about 5% - 7.5%.
A Nov 2009 article in the Wall Street Journal Are You Too Late for the Junk-Bond Party? discusses the non outperformance of junk bonds in the longer term...
This reaffirms my opinion that in the long-term a 10-year deposit paying 13.35% compounded annually is a significantly superior investment to high yield bonds.
However high yield bonds are notoriously volatile easily moving by 20% a day in value depending on market or political events. The surprising fact is that in the long-term, say 10 years, these junk bonds only marginally outperform investment grade bonds. When one looks at all the high yield benchmark indices that bonds funds compare themselves to, one sees that these indices yield about 5% - 7.5%.
A Nov 2009 article in the Wall Street Journal Are You Too Late for the Junk-Bond Party? discusses the non outperformance of junk bonds in the longer term...
Considering its risk, junk's average returns over recent years have been a mixed bag. Steven Huber, manager of T. Rowe Price Strategic Income fund, points out that when you include their 26% loss in 2008, junk bonds have returned an annual average of just under 6% since the beginning of last year -- the same as top-quality corporate bonds and only a whisker more than Treasurys. Extend the comparison back a full decade and the results are the same: The returns on high-yield bonds have been no higher than those of safer bonds. Of course, the same could be said for stocks. "With hindsight, it's hard to justify having taken any risk over the past 10 years, since it didn't pay off," says Martin Fridson of Fridson Investment Advisors. "Over the long term, you do get paid to take risk. It's a question of how long the long term is for you."
This reaffirms my opinion that in the long-term a 10-year deposit paying 13.35% compounded annually is a significantly superior investment to high yield bonds.
Azerbaijan - USD Certificate of Deposit 25% p.a.
November 2009 - The International bank of Azerbaijan (IBA) Ganjlik 10-year deposit is 25% flat annual, ie. 13.35% compounded for USD and 19% flat annual i.e. 11.24% compounded for EUR / GBP.
The average house price in the USA was US$8,500 in 1950. As an indication how high this deposit rate is, if house prices rose the same rate since 1950, the average house would cost US$15.7 million today.
If the DOW JONES index rose by that rate from today, it would surpass 800,000,000 in the year 2100. (no mathematical error there!)
Ford paid his assembly line workers US$5 a day in 1914. If wages increased at the same rate of the IBA deposit rate, those workers would be receiving wages of US$740,000 per day.
In May 1626, the Dutch bough New York from the Indians for goods worth 60 Guilders, generally converted to US$24. Had those dollars been invested at the IBA ganjlik deposit rate, it would mature today for 1.7 billion trillion. Consider the global GDP is less than $70 trillion.
Even recent examples reflect how high the IBA deposit rate is. In November 1972, the Dow Jones reached 1,000 for the first time. Had it increased by the same rate as the IBA deposit rates, today it would exceed 103,000.
A main advantage of this deposit compared to other fixed income investments such as bonds is there is zero volatility, an unheard of measurement in other fixed income investments. Also absolute returns are ensured whereas absolute return funds often produce negative periods. The returns on this deposit outperform the 5-year performance of any bond index, even high yield benchmarks.
It's unlikely that many investments will outperform the IBA long term deposits unless hyper-inflation returns in the next 10 years.
The average house price in the USA was US$8,500 in 1950. As an indication how high this deposit rate is, if house prices rose the same rate since 1950, the average house would cost US$15.7 million today.
If the DOW JONES index rose by that rate from today, it would surpass 800,000,000 in the year 2100. (no mathematical error there!)
Ford paid his assembly line workers US$5 a day in 1914. If wages increased at the same rate of the IBA deposit rate, those workers would be receiving wages of US$740,000 per day.
In May 1626, the Dutch bough New York from the Indians for goods worth 60 Guilders, generally converted to US$24. Had those dollars been invested at the IBA ganjlik deposit rate, it would mature today for 1.7 billion trillion. Consider the global GDP is less than $70 trillion.
Even recent examples reflect how high the IBA deposit rate is. In November 1972, the Dow Jones reached 1,000 for the first time. Had it increased by the same rate as the IBA deposit rates, today it would exceed 103,000.
A main advantage of this deposit compared to other fixed income investments such as bonds is there is zero volatility, an unheard of measurement in other fixed income investments. Also absolute returns are ensured whereas absolute return funds often produce negative periods. The returns on this deposit outperform the 5-year performance of any bond index, even high yield benchmarks.
It's unlikely that many investments will outperform the IBA long term deposits unless hyper-inflation returns in the next 10 years.
27 November 2009
26 November 2009
Dubai default on bonds - shows why deposits are better
24 November 2009
Belarus c.bank to cut rates by 0.5%
On Dec 1, 2009 The Belarus Central bank will cut the refinancing rate by 50 basis points to 13.5 percent.
An agreement has been reached with the IMF that we can start the process of cutting interest rates.
An agreement has been reached with the IMF that we can start the process of cutting interest rates.
Iceland interest rates cut to 11%
Iceland's central bank has cut interest rates to 11% from 12%, as hopes build that the country is starting to stabilise after the financial crisis.
The krona has now stabilised, which means the central bank can lower rates.
The krona has now stabilised, which means the central bank can lower rates.
22 November 2009
Vietnam Interest rate rises to nearly 10%
November 20, 2009 - VietBank raises deposit rates for both dong and US dollar.
...the deposit rate for one-month term was raised to 9 percent per year; three months of 9.5 percent per year; 12 months of 9.71 percent per year and 36 months of 9.8 percent per year. As for deposits in US dollar, the interest rate for three-month term of 2.58 percent per year, six months of 2.8 percent per year, nine months of 3 percent per year, 12 months of 3.1 percent per year and 24 months of 3.4 percent per year.
Especially, VietBank has applied the bonus interest rates for deposits in dong with total amount of over 50 million dong. The depositors may receive additional interest rates of 0.03-0.15 percent per year, depending on the deposit value.
...the deposit rate for one-month term was raised to 9 percent per year; three months of 9.5 percent per year; 12 months of 9.71 percent per year and 36 months of 9.8 percent per year. As for deposits in US dollar, the interest rate for three-month term of 2.58 percent per year, six months of 2.8 percent per year, nine months of 3 percent per year, 12 months of 3.1 percent per year and 24 months of 3.4 percent per year.
Especially, VietBank has applied the bonus interest rates for deposits in dong with total amount of over 50 million dong. The depositors may receive additional interest rates of 0.03-0.15 percent per year, depending on the deposit value.
Nigeria deposit rates up to 15%
The Central Bank of Nigeria Pegs Interest Rates to a max 15%.
Banks will negotiate higher deposit rates for larger sums.
Banks will negotiate higher deposit rates for larger sums.
Rwanda depoist rates increase to 16%
Information from some local commercial banks indicates that interest rates on fixed deposit accounts has increased to 16 percent up from six percent in April last year.
ECO-Bank a pan-African banking group with a presence in more African countries than any other bank, is said to be paying deposit rates of 13%.
ECO-Bank a pan-African banking group with a presence in more African countries than any other bank, is said to be paying deposit rates of 13%.
16 November 2009
Turkey to reduce rates two more times this year
November 16, 2009 - Turkey May Cut Benchmark Rate This Month and Next, Survey Shows.
...The bank in Ankara will lower its overnight borrowing rate by a quarter point to 6.5 percent on Nov. 19, all economists predict. Most economists said the bank will also reduce rates next month.
A further half-point reduction would bring cuts in the past 14 months to 10.5 percentage points, more than any of the other 50 central banks tracked by Bloomberg except Moldova...
...The bank in Ankara will lower its overnight borrowing rate by a quarter point to 6.5 percent on Nov. 19, all economists predict. Most economists said the bank will also reduce rates next month.
A further half-point reduction would bring cuts in the past 14 months to 10.5 percentage points, more than any of the other 50 central banks tracked by Bloomberg except Moldova...
14 November 2009
EGYPT - keeps rate at 8.5%
November 5, 2009 - Egypt Keeps Benchmark Interest Rate at 3-Year Low.
The Monetary Policy Committee left the overnight deposit rate at 8.25 percent and the overnight lending rate at 9.75 percent, the Cairo-based bank said in a statement on its Web site today.
The Monetary Policy Committee left the overnight deposit rate at 8.25 percent and the overnight lending rate at 9.75 percent, the Cairo-based bank said in a statement on its Web site today.
13 November 2009
NZ Dollar Climbs Against Greenback, Euro And Yen
November 13, 2009 - NZ Dollar Climbs Against Greenback, Euro And Yen.
On October 28, the central bank left interest rates to a record low 2.5 percent, and has pledged to keep them there until the second half of 2010 to help the economy recover.
However, we can assist you to open a NZD deposit for at least 9.45% p.a. Higher rates are negotiable through us.
On October 28, the central bank left interest rates to a record low 2.5 percent, and has pledged to keep them there until the second half of 2010 to help the economy recover.
However, we can assist you to open a NZD deposit for at least 9.45% p.a. Higher rates are negotiable through us.
12 November 2009
Long term USD deposits 13.4% p.a.
November 2009 - The International bank of Azerbaijan (IBA)Ganjlik 10-year deposit is 13.35% p.a. compounded for USD and 11.24% for EUR / GBP.
The average house price in the USA was US$8,500 in 1950. As an indication how high this deposit rate is, if house prices rose the same rate since 1950, the average house would cost US$15.7 million today.
If the DOW JONES index rose by that rate from today, it would surpass 800,000,000 in the year 2100. (no mathematical error there!)
Ford paid his assembly line workers US$5 a day in 1914. If wages increased at the same rate of the IBA deposit rate, those workers would be receiving wages of US$740,000 per day.
In May 1626, the Dutch bough New York from the Indians for goods worth 60 Guilders, generally converted to US$24. Had those dollars been invested at the IBA ganjlik deposit rate, it would mature today for 1.7 billion trillion. Consider the global GDP is less than $70 trillion.
Even recent examples reflect how high the IBA deposit rate is. In November 1972, the Dow Jones reached 1,000 for the first time. Had it increased by the same rate as the IBA deposit rates, today it would exceed 103,000.
A main advantage of this deposit compared to other fixed income investments such as bonds is there is zero volatility, an unheard of measurement in other fixed income investments. Also absolute returns are ensured whereas absolute return funds often produce negative periods. The returns on this deposit outperform the 5-year performance of any bond index, even high yield benchmarks.
It's unlikely that many investments will outperform the IBA long term deposits unless hyper-inflation returns in the next 10 years.
The average house price in the USA was US$8,500 in 1950. As an indication how high this deposit rate is, if house prices rose the same rate since 1950, the average house would cost US$15.7 million today.
If the DOW JONES index rose by that rate from today, it would surpass 800,000,000 in the year 2100. (no mathematical error there!)
Ford paid his assembly line workers US$5 a day in 1914. If wages increased at the same rate of the IBA deposit rate, those workers would be receiving wages of US$740,000 per day.
In May 1626, the Dutch bough New York from the Indians for goods worth 60 Guilders, generally converted to US$24. Had those dollars been invested at the IBA ganjlik deposit rate, it would mature today for 1.7 billion trillion. Consider the global GDP is less than $70 trillion.
Even recent examples reflect how high the IBA deposit rate is. In November 1972, the Dow Jones reached 1,000 for the first time. Had it increased by the same rate as the IBA deposit rates, today it would exceed 103,000.
A main advantage of this deposit compared to other fixed income investments such as bonds is there is zero volatility, an unheard of measurement in other fixed income investments. Also absolute returns are ensured whereas absolute return funds often produce negative periods. The returns on this deposit outperform the 5-year performance of any bond index, even high yield benchmarks.
It's unlikely that many investments will outperform the IBA long term deposits unless hyper-inflation returns in the next 10 years.
11 November 2009
Ukraine in financial turmoil
November 11, 2009 - Some clients have queried our Ukraine high interest deposits.
However Russia Warns of Gas Crisis as Ukraine Faces Financial Turmoil.
However Russia Warns of Gas Crisis as Ukraine Faces Financial Turmoil.
Romania - benchmark interest rate 8 %
November 10, 2009 - In terms of real interest rates 8 % is very high when the next in the EU is 7 % in Hungary or Turkey deputy central bank Governor Cristian Popa said.
'But the real interest rate must also be corrected with the difference between the risk premium investors perceive now for exposure to Romania compared with the risk premium for the euro zone. The interest rate is not exaggerated at the moment.
Many banks in Romania offer deposit rates of 10% or more.
'But the real interest rate must also be corrected with the difference between the risk premium investors perceive now for exposure to Romania compared with the risk premium for the euro zone. The interest rate is not exaggerated at the moment.
Many banks in Romania offer deposit rates of 10% or more.
Bulgaria Central Bank Interest Rate Under 1% - deposits at 8%
November 11, 2009 - The Bulgarian National Bank (BNB) has announced the lowest basic interest rate since the index was recorded for the first time in 1991.
From November 1 2009, the basic interest rate has been set at 0,61%, which is down by 0,85 percentage points compared to the previous month. This is the first time that the basic interest rate falls under 1%.
The interest rate decrease is part of a continued trend that started at the beginning of the year from levels at 5,17%.
However, deposit rates in Bulgaria average 8% for LEV
From November 1 2009, the basic interest rate has been set at 0,61%, which is down by 0,85 percentage points compared to the previous month. This is the first time that the basic interest rate falls under 1%.
The interest rate decrease is part of a continued trend that started at the beginning of the year from levels at 5,17%.
However, deposit rates in Bulgaria average 8% for LEV
Belarus - High interest but dangerous currency
Belarus economy still in deep trouble. Their banks offer up to 22% interest on deposits.
The model of freebie and promise bargaining created by the Belarusian dictator has become outdated, the Russian mass media report.
As internet newspaper Segonia.ru reminds, at the beginning of summer, Lukashenka called Aleksey Kudrin a “wacko” for the latter had forecasted the Belarusian economy would face problems in late autumn. On October 29, Lukashenka said the situation in the country was catastrophic and the economy state was “critical”. Some days later, on November 2, Lukashenka harshly criticized the European Union. He repeated again that he wasn’t going to meet halfway for tighter cooperation with European courtiers. The events – the summer rebuke to Kudrin, announcement of a catastrophic situation in the country and criticism of the EU positions – would seem to be unrelated, but they stand together.
It’s not a secret that the Belarusian economic “miracle”, often called so by Belarusian governmental propaganda, was based on “special relations” with Russia. Belarus bought energy resources at Russian domestic prices and sold products at market prices. Grey schemes of Russian oil re-export gave additional finance. The parties close eyes to the scheme because it was planned to sign union agreements and start a big-scale integration of the two states. Lukashenka gave dozens of promises every year, signed agreements, but hasn’t fulfilled any of them. Formally, Aleksandr Lukashenka hasn’t violated the arrangements, but is always finding something preventing from making the last step.
The policy of “separating flies from cutlets” was launched by Putin’s government in 2004. If Belarus sells goods in Russia at world prices, why shouldn’t they buy Russian goods at world prices too? It will be possible to go to domestic prices after a real integration. Lukashenka shouted he and his people would live in dugouts, but wouldn’t be broken by economic pressure, he announced he would go to West, to China and told other geopolitical fairytales. Having wandered for a year and having not found financial resources for the economic “miracle”, the Belarusian ministers asked Russia for loans.
It was supposed formally that loans should be taken for modernization and restructuring of outdated and uncompetitive industry. It turned out to be les poetic in reality. The loans have been spent to create the appearance of well-being. But credits and interest rate must be paid, their sums can’t be compared with profits from oil off-shore. More and more loans were needed. The EU didn’t refuse to give financial aid to Belarus, but demanded guarantees of efficient use of resources, in first turn, real liberalization, privatization and transferring to market economy. As usual, Lukashenka tried to fool a partner by giving promises and making loud statements, but then refusing to fulfil uncomfortable conditions.
The things were sorted out when the crises began. Rather moderate Belarusian goods found no buyers. Export reduced several times. The source of foreign currency dried up. The country had to apply to the International Monetary Fund to hold financial reserves on a minimal level. Every sign of the economic miracle vanished. Most big enterprises work three days a week, wages have fallen two- or threefold. The Belarusian ruble was devalued on New Year’s eve. But even these facts didn’t make Lukashenka watch the reality, the feast in time of plague goes on. Millions of dollars are still wasted for subsidising loss making state-run enterprises, tens of millions of dollars are spent on military parades on occasion of state holidays, dozens of ice-rinks are built to create the appearance of sports movement, etc.
In May, Minister of finance Kudrin refused to give a loan to Belarus, wasting credits. Attempts to receive loans only from the EU failed. The sums offered seemed derisive to Lukashenka. Moreover, Europe demanded to accept their conditions on economy liberalization to start significant financing. The liberalization must have been accepted and started in practice. The situation is aggravated with the fact that Russia has also stopped financing unless the real linearization is started. There’s no more reason to manoeuvre between East and West.
The Belarusian ruler staked his all in August. The bet was sovereignty, as usual. Moscow and Brussels were hinted the republic was choosing its way to move forward. Ti could be either the common European family, or the family Russian peoples. The prices remained the same – $5–10bn of gratuitous aid a year. The terms of integration were obscure. Russia’s reply was visit of PM Sidorski to meet Putin. Russia rejected the doubtful deal of backing the wilful union state. It was the unsuccessful meeting that provoked Lukashenka to speak about the catastrophe. A reply from the EU was received at the beginning of the week. They found the offer dubious, too. What step is Lukashenka going to make now? He is more likely to go back to the drawing board. He will ask money from Russia, then from the EU, then China, and then start a circle again.
The model of freebie and promise bargaining created by the Belarusian dictator has become outdated, the Russian mass media report.
As internet newspaper Segonia.ru reminds, at the beginning of summer, Lukashenka called Aleksey Kudrin a “wacko” for the latter had forecasted the Belarusian economy would face problems in late autumn. On October 29, Lukashenka said the situation in the country was catastrophic and the economy state was “critical”. Some days later, on November 2, Lukashenka harshly criticized the European Union. He repeated again that he wasn’t going to meet halfway for tighter cooperation with European courtiers. The events – the summer rebuke to Kudrin, announcement of a catastrophic situation in the country and criticism of the EU positions – would seem to be unrelated, but they stand together.
It’s not a secret that the Belarusian economic “miracle”, often called so by Belarusian governmental propaganda, was based on “special relations” with Russia. Belarus bought energy resources at Russian domestic prices and sold products at market prices. Grey schemes of Russian oil re-export gave additional finance. The parties close eyes to the scheme because it was planned to sign union agreements and start a big-scale integration of the two states. Lukashenka gave dozens of promises every year, signed agreements, but hasn’t fulfilled any of them. Formally, Aleksandr Lukashenka hasn’t violated the arrangements, but is always finding something preventing from making the last step.
The policy of “separating flies from cutlets” was launched by Putin’s government in 2004. If Belarus sells goods in Russia at world prices, why shouldn’t they buy Russian goods at world prices too? It will be possible to go to domestic prices after a real integration. Lukashenka shouted he and his people would live in dugouts, but wouldn’t be broken by economic pressure, he announced he would go to West, to China and told other geopolitical fairytales. Having wandered for a year and having not found financial resources for the economic “miracle”, the Belarusian ministers asked Russia for loans.
It was supposed formally that loans should be taken for modernization and restructuring of outdated and uncompetitive industry. It turned out to be les poetic in reality. The loans have been spent to create the appearance of well-being. But credits and interest rate must be paid, their sums can’t be compared with profits from oil off-shore. More and more loans were needed. The EU didn’t refuse to give financial aid to Belarus, but demanded guarantees of efficient use of resources, in first turn, real liberalization, privatization and transferring to market economy. As usual, Lukashenka tried to fool a partner by giving promises and making loud statements, but then refusing to fulfil uncomfortable conditions.
The things were sorted out when the crises began. Rather moderate Belarusian goods found no buyers. Export reduced several times. The source of foreign currency dried up. The country had to apply to the International Monetary Fund to hold financial reserves on a minimal level. Every sign of the economic miracle vanished. Most big enterprises work three days a week, wages have fallen two- or threefold. The Belarusian ruble was devalued on New Year’s eve. But even these facts didn’t make Lukashenka watch the reality, the feast in time of plague goes on. Millions of dollars are still wasted for subsidising loss making state-run enterprises, tens of millions of dollars are spent on military parades on occasion of state holidays, dozens of ice-rinks are built to create the appearance of sports movement, etc.
In May, Minister of finance Kudrin refused to give a loan to Belarus, wasting credits. Attempts to receive loans only from the EU failed. The sums offered seemed derisive to Lukashenka. Moreover, Europe demanded to accept their conditions on economy liberalization to start significant financing. The liberalization must have been accepted and started in practice. The situation is aggravated with the fact that Russia has also stopped financing unless the real linearization is started. There’s no more reason to manoeuvre between East and West.
The Belarusian ruler staked his all in August. The bet was sovereignty, as usual. Moscow and Brussels were hinted the republic was choosing its way to move forward. Ti could be either the common European family, or the family Russian peoples. The prices remained the same – $5–10bn of gratuitous aid a year. The terms of integration were obscure. Russia’s reply was visit of PM Sidorski to meet Putin. Russia rejected the doubtful deal of backing the wilful union state. It was the unsuccessful meeting that provoked Lukashenka to speak about the catastrophe. A reply from the EU was received at the beginning of the week. They found the offer dubious, too. What step is Lukashenka going to make now? He is more likely to go back to the drawing board. He will ask money from Russia, then from the EU, then China, and then start a circle again.
Russia - Are Rouble Deposits at 15% - 18% a sure bet?
November 10, 2009 - Russia central bank warns speculators as rouble rallies.
MORE CUTS TO COME
Pressure on the rouble is rising as a result of carry trades, the practice of borrowing in lower-yielding currencies to invest in those carrying higher interest rates. 'Therefore rate cuts would reduce pressure on the rouble,' he added.
The central bank has already reduced the refinancing rate by 350 basis points since April to an annualised 9.50 percent to help the economy out of its first recession in a decade, but that rate still remains far above rates of 1 percent or less seen in major developed economies, encouraging carry trades.
The rouble has firmed by more than 8.5 percent against the basket since its rally began in early September, recovering half of its losses incurred during gradual depreciation a year ago, when oil prices collapsed.
MORE CUTS TO COME
Pressure on the rouble is rising as a result of carry trades, the practice of borrowing in lower-yielding currencies to invest in those carrying higher interest rates. 'Therefore rate cuts would reduce pressure on the rouble,' he added.
The central bank has already reduced the refinancing rate by 350 basis points since April to an annualised 9.50 percent to help the economy out of its first recession in a decade, but that rate still remains far above rates of 1 percent or less seen in major developed economies, encouraging carry trades.
The rouble has firmed by more than 8.5 percent against the basket since its rally began in early September, recovering half of its losses incurred during gradual depreciation a year ago, when oil prices collapsed.
09 November 2009
Albania - 8% p.a. to 9.5%
India - up to 12.6% p.a.
One of the highest deposit rates in India is from Syrian Catholic Bank offering up to 12.6% p.a. for long term deposits.
Syria deposits - up to 7% p.a.
Syrian banks offer term deposit rates in Syrian Pounds for up to 7% p.a.
08 November 2009
Russia - Says Ruble Could Strengthen If Oil Price Rises
MOSCOW (Dow Jones)--The Russian currency could strengthen to 26 rubles against the dollar if the oil price rises, the country's Deputy Economic Development Minister Andrey Klepach said Wednesday.
The ruble strengthened to 29.2 against the dollar Tuesday, well above a low of RUB36 in the beginning of the year.
That marks a major turnaround from January, when the central bank completed a two-month devaluation of the Russian currency after commodity prices plunged and the country slipped into its first recession in a decade.
Asked about the effect of a stronger ruble on the recovery of Russia's commodity-driven economy, Klepach said that a rate of "RUB26 to RUB27 against the dollar could be dangerous."
Oil prices were lower early Wednesday as investors took profits after a recent rally triggered by expected demand sent prices to $80 for the first time in a year, analysts said. New York's main contract, light sweet crude for December delivery, fell 47 cents to $78.65 a barrel.
The ruble strengthened to 29.2 against the dollar Tuesday, well above a low of RUB36 in the beginning of the year.
That marks a major turnaround from January, when the central bank completed a two-month devaluation of the Russian currency after commodity prices plunged and the country slipped into its first recession in a decade.
Asked about the effect of a stronger ruble on the recovery of Russia's commodity-driven economy, Klepach said that a rate of "RUB26 to RUB27 against the dollar could be dangerous."
Oil prices were lower early Wednesday as investors took profits after a recent rally triggered by expected demand sent prices to $80 for the first time in a year, analysts said. New York's main contract, light sweet crude for December delivery, fell 47 cents to $78.65 a barrel.
Russia - to sell bonds for 1st time since 1998
Nov. 5, 2009 (Bloomberg) -- A year-long rally in Russia’s international bonds is pushing yields toward record lows as the country prepares to sell debt to foreign investors for the first time since the country’s 1998 default.
After the bonds lost almost twice the average for emerging- market debt in 2008, rates on Russia’s issues have fallen 4.5 percentage points or more from the past year’s highs to within 39 basis points of their lowest ever, data compiled by Bloomberg show. The cost of protecting against a default by Russia dropped more this year than for any other country with an investment- grade rating
Investors are piling into debt sold by the world’s largest energy-exporting nation as gross domestic product starts to rebound from a record 10.9 percent second-quarter contraction and the central bank boasts foreign reserves of more than $400 billion. Demand is growing even after the government’s default on $40 billion of ruble debt in 1998 sent global financial markets tumbling and the five-day war with Georgia a decade later triggered a $300 billion cash exodus, data compiled by BNP Paribas SA show.
“A lot of debtors in 1998 said they’d never touch Russia again, but memory in the bond market is short, so they are all lining up,” said Saleh Daher, the managing director of Boston- based Turan Corp., which owns Russian debt dating back to the Soviet era. “There is a wall of cash looking for investment, in particular in the emerging-market bond world.”
London Briefing
Officials from Prime Minister Vladimir Putin’s government briefed investors today in London on plans to sell as much as $17.8 billion of debt next year after the first budget shortfall since 1999. The government may issue new bonds in exchange for its outstanding dollar debt maturing in 2028 and 2030, said Max Wolman, a London-based money manager at Aberdeen Asset Management Plc, who was at the meeting. The government wants to create new benchmark securities to help companies price bond issues, Wolman said, citing comments from officials.
Russia will borrow less than the full amount planned next year should the price of oil remain above $58 a barrel, Finance Minister Alexei Kudrin said in London after meeting with bondholders.
Russia is planning to return to international bond markets months after the economy suffered from the global financial crisis. When last year’s credit freeze prompted investors to flee emerging markets, Russia burned through a third of its reserves in six months, buying $200 billion worth of rubles to make sure the currency’s decline was gradual.
1998 Default
The economy contracted in this year’s second quarter as investment from abroad shrank and the worst global recession since World War II cut fuel demand. Russia’s GDP will fall 7.2 percent in 2009, the European Commission forecast this week. The government predicts a 6.8 percent budget deficit in 2010 after a 7.7 percent shortfall this year, its first in 10 years.
Exit from the government’s economic stimulus measures will “take a few years,” Kudrin said today. During this time, the country will run a budget deficit that will be financed from capital markets, he said. The central bank’s First Deputy Chairman Alexei Ulyukayev said in an interview in London today that there’s a “possibility” of lowering the benchmark refinancing rate further.
Windfall
Even after this year’s crisis, the economy looks better than a decade ago. The 1998 default that was followed by a more than 70 percent plunge in the ruble and the collapse of some of the nation’s largest banks ended with “one of history’s most powerful turn-around stories,” said Arnab Das, the London-based head of market research and strategy at Roubini Global Economics.
As oil prices increased more than six-fold since the end of 1998 to about $80 a barrel now, down from the July 2008 record of $145, Russia’s sovereign debt load plunged, credit ratings increased and international reserves hit an all-time high of $598 billion. The stockpile totaled $432.8 billion on Oct. 30.
“To their credit, they ran surpluses, and they wisely channeled that windfall into international reserves,” said Michael Gomez, who oversees about $30 billion as co-head of emerging markets at Pacific Investment Management Co. in Munich. “It gave them a cushion to navigate the extraordinary events of 2008 and 2009.”
Moody’s Investors Service gave Russia its first investment grade rating in 2003, followed by Fitch Ratings in 2004 and Standard & Poor’s in 2005. It’s now rated three levels above junk at Baa1 by Moody’s and one level lower at BBB by Fitch and Standard & Poor’s.
The country’s total foreign sovereign debt stood at $38.1 billion as of Oct. 1, central bank data show. Total debt is at 9 percent of GDP this year, down from 63 percent in 2000, according to S&P data.
‘Different Place’
Even after oil prices plunged to as low $34 a barrel in February, Russia recovered and “exited” its recession, Kudrin said Oct. 20. Preliminary data from the Economy Ministry show that GDP rose 0.6 percent in the third quarter from the previous three months, he said.
“From the last time they borrowed, Russia is a completely different place,” said Ian Hague, a New York-based founding partner at Firebird Management LLC, which oversees about $1.5 billion in assets, much of it in the former Soviet Union. “The kind of yields they were forced to issue at in the past are in a completely different universe; I think they will be able to price somewhere around 6.5 or 7 percent.”
‘Minimal’ Premium
In June 1998, Russia was forced to pay 753 basis points, or 7.53 percentage points, more than Treasuries to borrow $2.5 billion of dollar-denominated debt, with yields at 12.75 percent. In October, the gap on Russia’s 2030 Eurobonds fell below 200 basis points for the first time since the week Lehman Brothers Holdings Inc. collapsed in September 2008, after reaching 892 basis points a year ago, Bloomberg data show.
The premium investors will demand for Russia’s new bonds will be “minimal,” said Alexander Kudrin, a fixed-income analyst in Moscow at Troika Dialog, Russia’s oldest investment bank. “If they were to issue today, a placement of up to $3 billion will be around 220 to 230 basis points,” he said.
The price of credit-default swaps, contracts that pay off if Russia reneges on its debts, is almost at a 12-month low of 190 basis points, falling from 547 basis points a year ago. Of all countries tracked by Bloomberg, only swaps linked to Venezuela, Argentina and Ukraine have fallen more in the same period, Bloomberg data show. All three are rated below investment grade.
“It’s a very solvent country; that would bode well for them being able to raise capital,” Michael Hasenstab, who oversees $45 billion of fixed-income investments at Franklin Templeton Investments, said in an interview in Vienna today. “In the last couple months many countries have been able to raise a significant amount of capital and Russia in terms of its debt sustainability would be on equivalent footing if not better footing than a lot of those countries.”
After the bonds lost almost twice the average for emerging- market debt in 2008, rates on Russia’s issues have fallen 4.5 percentage points or more from the past year’s highs to within 39 basis points of their lowest ever, data compiled by Bloomberg show. The cost of protecting against a default by Russia dropped more this year than for any other country with an investment- grade rating
Investors are piling into debt sold by the world’s largest energy-exporting nation as gross domestic product starts to rebound from a record 10.9 percent second-quarter contraction and the central bank boasts foreign reserves of more than $400 billion. Demand is growing even after the government’s default on $40 billion of ruble debt in 1998 sent global financial markets tumbling and the five-day war with Georgia a decade later triggered a $300 billion cash exodus, data compiled by BNP Paribas SA show.
“A lot of debtors in 1998 said they’d never touch Russia again, but memory in the bond market is short, so they are all lining up,” said Saleh Daher, the managing director of Boston- based Turan Corp., which owns Russian debt dating back to the Soviet era. “There is a wall of cash looking for investment, in particular in the emerging-market bond world.”
London Briefing
Officials from Prime Minister Vladimir Putin’s government briefed investors today in London on plans to sell as much as $17.8 billion of debt next year after the first budget shortfall since 1999. The government may issue new bonds in exchange for its outstanding dollar debt maturing in 2028 and 2030, said Max Wolman, a London-based money manager at Aberdeen Asset Management Plc, who was at the meeting. The government wants to create new benchmark securities to help companies price bond issues, Wolman said, citing comments from officials.
Russia will borrow less than the full amount planned next year should the price of oil remain above $58 a barrel, Finance Minister Alexei Kudrin said in London after meeting with bondholders.
Russia is planning to return to international bond markets months after the economy suffered from the global financial crisis. When last year’s credit freeze prompted investors to flee emerging markets, Russia burned through a third of its reserves in six months, buying $200 billion worth of rubles to make sure the currency’s decline was gradual.
1998 Default
The economy contracted in this year’s second quarter as investment from abroad shrank and the worst global recession since World War II cut fuel demand. Russia’s GDP will fall 7.2 percent in 2009, the European Commission forecast this week. The government predicts a 6.8 percent budget deficit in 2010 after a 7.7 percent shortfall this year, its first in 10 years.
Exit from the government’s economic stimulus measures will “take a few years,” Kudrin said today. During this time, the country will run a budget deficit that will be financed from capital markets, he said. The central bank’s First Deputy Chairman Alexei Ulyukayev said in an interview in London today that there’s a “possibility” of lowering the benchmark refinancing rate further.
Windfall
Even after this year’s crisis, the economy looks better than a decade ago. The 1998 default that was followed by a more than 70 percent plunge in the ruble and the collapse of some of the nation’s largest banks ended with “one of history’s most powerful turn-around stories,” said Arnab Das, the London-based head of market research and strategy at Roubini Global Economics.
As oil prices increased more than six-fold since the end of 1998 to about $80 a barrel now, down from the July 2008 record of $145, Russia’s sovereign debt load plunged, credit ratings increased and international reserves hit an all-time high of $598 billion. The stockpile totaled $432.8 billion on Oct. 30.
“To their credit, they ran surpluses, and they wisely channeled that windfall into international reserves,” said Michael Gomez, who oversees about $30 billion as co-head of emerging markets at Pacific Investment Management Co. in Munich. “It gave them a cushion to navigate the extraordinary events of 2008 and 2009.”
Moody’s Investors Service gave Russia its first investment grade rating in 2003, followed by Fitch Ratings in 2004 and Standard & Poor’s in 2005. It’s now rated three levels above junk at Baa1 by Moody’s and one level lower at BBB by Fitch and Standard & Poor’s.
The country’s total foreign sovereign debt stood at $38.1 billion as of Oct. 1, central bank data show. Total debt is at 9 percent of GDP this year, down from 63 percent in 2000, according to S&P data.
‘Different Place’
Even after oil prices plunged to as low $34 a barrel in February, Russia recovered and “exited” its recession, Kudrin said Oct. 20. Preliminary data from the Economy Ministry show that GDP rose 0.6 percent in the third quarter from the previous three months, he said.
“From the last time they borrowed, Russia is a completely different place,” said Ian Hague, a New York-based founding partner at Firebird Management LLC, which oversees about $1.5 billion in assets, much of it in the former Soviet Union. “The kind of yields they were forced to issue at in the past are in a completely different universe; I think they will be able to price somewhere around 6.5 or 7 percent.”
‘Minimal’ Premium
In June 1998, Russia was forced to pay 753 basis points, or 7.53 percentage points, more than Treasuries to borrow $2.5 billion of dollar-denominated debt, with yields at 12.75 percent. In October, the gap on Russia’s 2030 Eurobonds fell below 200 basis points for the first time since the week Lehman Brothers Holdings Inc. collapsed in September 2008, after reaching 892 basis points a year ago, Bloomberg data show.
The premium investors will demand for Russia’s new bonds will be “minimal,” said Alexander Kudrin, a fixed-income analyst in Moscow at Troika Dialog, Russia’s oldest investment bank. “If they were to issue today, a placement of up to $3 billion will be around 220 to 230 basis points,” he said.
The price of credit-default swaps, contracts that pay off if Russia reneges on its debts, is almost at a 12-month low of 190 basis points, falling from 547 basis points a year ago. Of all countries tracked by Bloomberg, only swaps linked to Venezuela, Argentina and Ukraine have fallen more in the same period, Bloomberg data show. All three are rated below investment grade.
“It’s a very solvent country; that would bode well for them being able to raise capital,” Michael Hasenstab, who oversees $45 billion of fixed-income investments at Franklin Templeton Investments, said in an interview in Vienna today. “In the last couple months many countries have been able to raise a significant amount of capital and Russia in terms of its debt sustainability would be on equivalent footing if not better footing than a lot of those countries.”
Uzbekistan - 24% p.a.
As at October 2009 the Average term CD rates in Uzbekistan banks were:
- in UZS is 23.9% p.a.
- in USD is 7.6% p.a.
- in EUR is 6.3% p.a.
07 November 2009
05 November 2009
JPY deposit - 3.5%
A major European bank is offering 3.5% for JPY in Serbia. Consider that most depositors in Japan get close to zero.
04 November 2009
03 November 2009
Bangladesh - 12.5% p.a. from Post Office
October 27, 2009
Depositors flock to savings certificates as banks cut rate
In terms of deposit rate, savings instruments now offer the most attractive interest rate. At present there are three types of savings instruments in circulation with interest rate of 11.50 percent, 12 percent and 12.50 percent.
The post office savings rate is the highest at 12.50 percent.
Depositors flock to savings certificates as banks cut rate
In terms of deposit rate, savings instruments now offer the most attractive interest rate. At present there are three types of savings instruments in circulation with interest rate of 11.50 percent, 12 percent and 12.50 percent.
The post office savings rate is the highest at 12.50 percent.
National Bank of Uzbekistan - 21% p.a.
Deposit rates 21% per annum.
Ta'til — 21%. The amount of the first on the deposit — not less than ten thousand Soums,and following contributions — not less than two thousand Soums.
Kelajak deposit could be made for under-16-year-old children for the time period. Deposit is fixed at 25% per annum.
Uzbekistan’s banking system is composed of 32 banks and is dominated by the National Bank of Uzbekistan, a state-controlled institution that holds roughly 40 percent of all deposits in the country. Citing measures to prevent money laundering and the financing of alleged terrorist and criminal groups, authorities have until very recently maintained tight control over the banking sector. In particular, officials have scrutinized transfers from outside the country.
Frequent government interference and rigid regulation have severely hampered the development of Uzbekistan’s financial sector. In 2007, Uzbekistan ranked at the bottom of the Economist’s Emerging Market Access Index, which measures a particular country’s openness to trade and investment. The country’s banks have also suffered from low public confidence. Total retail deposits in Uzbek banks amounted to approximately $760 million in 2007. Although this represented a 50 percent increase compared with 2006, the total was still relatively paltry. In neighboring Kazakhstan, by contrast, retail deposits reached $12 billion at the end of 2007.
Moody`s Investors Service said it assigned National Bank for Foreign Economic Activity of the Republic of Uzbekistan a bank financial strength rating (BFSR) of `E+`, long and short-term local currency deposit ratings of `Ba3/Not Prime` and long-term and short-term foreign currency deposit ratings of `B3/Not Prime` with a stable outlook.
Ta'til — 21%. The amount of the first on the deposit — not less than ten thousand Soums,and following contributions — not less than two thousand Soums.
Kelajak deposit could be made for under-16-year-old children for the time period. Deposit is fixed at 25% per annum.
Uzbekistan’s banking system is composed of 32 banks and is dominated by the National Bank of Uzbekistan, a state-controlled institution that holds roughly 40 percent of all deposits in the country. Citing measures to prevent money laundering and the financing of alleged terrorist and criminal groups, authorities have until very recently maintained tight control over the banking sector. In particular, officials have scrutinized transfers from outside the country.
Frequent government interference and rigid regulation have severely hampered the development of Uzbekistan’s financial sector. In 2007, Uzbekistan ranked at the bottom of the Economist’s Emerging Market Access Index, which measures a particular country’s openness to trade and investment. The country’s banks have also suffered from low public confidence. Total retail deposits in Uzbek banks amounted to approximately $760 million in 2007. Although this represented a 50 percent increase compared with 2006, the total was still relatively paltry. In neighboring Kazakhstan, by contrast, retail deposits reached $12 billion at the end of 2007.
Moody`s Investors Service said it assigned National Bank for Foreign Economic Activity of the Republic of Uzbekistan a bank financial strength rating (BFSR) of `E+`, long and short-term local currency deposit ratings of `Ba3/Not Prime` and long-term and short-term foreign currency deposit ratings of `B3/Not Prime` with a stable outlook.
01 November 2009
Sri Lanka - up to 18.5% p.a.
Nov 1, 2009 - Some banks in Sri Lanka offering up to 18.5% p.a. for Sri Lanka Rupee deposits as at October 2009.
NO CHANGE TO DEPOSIT RATES – STATE BANKS
Sri Lanka’s state banks have assured the public that they would not cut deposit rates to bring them in line with the recent lending rate cut although the People’s Bank said they would have to introduce a slight deposit rate reduction for those customers who get high interest rates for their deposits. The heads of the island’s state bank gave this assurance at a joint press conference held with the Minister of Finance yesterday. However, the People’s Bank Senior Deputy General Manager Corporate and International Banking Peoples Bank Kapila Ariyaratne told the media that the Bank would have to implement a slight cut in deposit rates for those customers who earn an interest rate of more than 8 percent. The heads of the other two state banks, namely; the National Savings Bank and the Bank of Ceylon however gave their assurance that they would not reduce deposit rates.
National Savings Bank Chairman S. R. Artigala said the state banks would maintain a 1 percent to 4 percent difference between the lending and deposit rates. He said these state entities will not crash as a result of the rate cuts as they have a market share of over 70 percent today. Besides, he said these banks would benefit as demand for lending would increase by this move.
The heads of the country’s state banks also argued that more money would be pumped into the local economy with the recent rate cut. They noted that demand for credit schemes such as housing loans would increase and therefore the demand for building material would also go up pumping in more money to the economy. However, the state bank officials highlighted the fact that those who have obtained loans for low interest rates would get an interest rate cut of 2 percent while those who have obtained loans for an interest as high as 21 percent would get a 6 percent cut in their rates. They also explained that those who have already obtained loans and are paying interest would also get the benefit of these reduced lending rates.
President Rajapaksa ordered a sweeping 700 basis point cut in state bank lending rates, the lifting of penal rates and the fast-tracking of state worker loan applications earlier this week and ordered the state banks which were lending at around 15 to 22 percent a year to restructure their lending rate to between 8 and 12 percent. The decision was made following a meeting the President had with state bank chiefs, which was attended by Deputy Finance Minister Ranjith Siyambalapitiya and Treasury Secretary Dr. P. B. Jayasundera.
The opposition has questioned the move starting that it could be an ‘election gundu’ charging that this would be only a temporary move. They charged that the People’s Bank in particular would be converted into a loss making venture. The Bank earned a profit of Rs.5 billion but the reduction of the interest rates would turn this profit into a loss of Rs 1.9 billion, the UNP charged on Thursday.
NO CHANGE TO DEPOSIT RATES – STATE BANKS
Sri Lanka’s state banks have assured the public that they would not cut deposit rates to bring them in line with the recent lending rate cut although the People’s Bank said they would have to introduce a slight deposit rate reduction for those customers who get high interest rates for their deposits. The heads of the island’s state bank gave this assurance at a joint press conference held with the Minister of Finance yesterday. However, the People’s Bank Senior Deputy General Manager Corporate and International Banking Peoples Bank Kapila Ariyaratne told the media that the Bank would have to implement a slight cut in deposit rates for those customers who earn an interest rate of more than 8 percent. The heads of the other two state banks, namely; the National Savings Bank and the Bank of Ceylon however gave their assurance that they would not reduce deposit rates.
National Savings Bank Chairman S. R. Artigala said the state banks would maintain a 1 percent to 4 percent difference between the lending and deposit rates. He said these state entities will not crash as a result of the rate cuts as they have a market share of over 70 percent today. Besides, he said these banks would benefit as demand for lending would increase by this move.
The heads of the country’s state banks also argued that more money would be pumped into the local economy with the recent rate cut. They noted that demand for credit schemes such as housing loans would increase and therefore the demand for building material would also go up pumping in more money to the economy. However, the state bank officials highlighted the fact that those who have obtained loans for low interest rates would get an interest rate cut of 2 percent while those who have obtained loans for an interest as high as 21 percent would get a 6 percent cut in their rates. They also explained that those who have already obtained loans and are paying interest would also get the benefit of these reduced lending rates.
President Rajapaksa ordered a sweeping 700 basis point cut in state bank lending rates, the lifting of penal rates and the fast-tracking of state worker loan applications earlier this week and ordered the state banks which were lending at around 15 to 22 percent a year to restructure their lending rate to between 8 and 12 percent. The decision was made following a meeting the President had with state bank chiefs, which was attended by Deputy Finance Minister Ranjith Siyambalapitiya and Treasury Secretary Dr. P. B. Jayasundera.
The opposition has questioned the move starting that it could be an ‘election gundu’ charging that this would be only a temporary move. They charged that the People’s Bank in particular would be converted into a loss making venture. The Bank earned a profit of Rs.5 billion but the reduction of the interest rates would turn this profit into a loss of Rs 1.9 billion, the UNP charged on Thursday.
31 October 2009
Emerging-Market Debt Boom Signals End of Crisis
Oct 13, 2009 - Investors are throwing money into the riskiest of emerging markets at a stunning pace, buying as if the global financial crisis is history.
The sovereign credits of Argentina, Ecuador, Pakistan and Ukraine have risen more than 100% year to date on benchmark JPMorgan's Emerging Market Bond Index Global, or Embig. Other impressive gainers include the Dominican Republic, Ghana, Iraq, Serbia and Venezuela.
Investors and market analysts aren't sweating yet. Many say the levels are reasonable, and there is even potential for further advances. A big correction isn't likely, they add, though a modest one is possible. They point out the gains appear outsized given the historic plunges a year ago. Clearly, the problem has gone from, 'What do I sell in order to raise the cash I need?'...to, 'Oh my gosh, where do I put the cash that's being thrown at me,' said Michael Gavin, head of emerging-markets strategy at Barclays Capital. The focus turns from fears of downside risks to upside potential. Mr. Gavin said Barclays Capital doesn't believe current levels have risen to bubble-like levels, but the odds are very high that we will. So far this year, Argentina has advanced 136% on the Embig, while Ukraine rose 112%, Pakistan rose 163% and Iraq gained 94%. Overall, the index has gained 28% this year.
Ultimately, Mr. Gavin and others say, asset prices are defensible, particularly as many sources of money have yet to re-enter the market in full position, including hedge funds and individual investors. The move in these low-grade bonds, which some call junk, comes amid a broad repositioning into riskier assets, including commodities and investment-grade emerging markets such as Brazil.
Emerging-market funds have absorbed more than $40 billion so far this year, according to fund tracker EPFR Global.That means that last year's outflow of $40.1 billion has been completely erased said Andrew Howell, an emerging-markets strategist at Citigroup. We tend to get nervous when inflows surge, suggesting excessive optimism. However, at this point it seems early to get too worried.
Ukraine’s banks start to lower interest rates on hryvnia deposits
KIEV, Oct. 21 – Ukraine’s banks have started cutting interest rates on short-term deposits in hryvnias and on one-year deposits in foreign currency, representatives of commercial banks told Interfax-Ukraine.
One cannot say that now a common trend of interest rate falls in banks is seen. It's likely that the trend is the following: some large banks launched short-term deposit products in hryvnias with interest rates that were higher than those on the market, and now they have fallen to a market level. A fall in interest rates is seen not for all deposits, and the trend affected only those deposits with the shortest terms - up to one month. As for our bank [VAB Bank], we had interest rates that were at the market level, now the bank is not cutting rates said Tsvetan Tetrinin, deputy chairman of VAB Bank for retail business.
Kyrgyzstan to obtain sovereign credit rating.
Oct 10, 2009 Kyrgyzstan to obtain sovereign credit rating.
A "B" credit rating would match the 10% p.a. USD deposit rates available from Banks in Kyrgyzstan.
A "B" credit rating would match the 10% p.a. USD deposit rates available from Banks in Kyrgyzstan.
30 October 2009
Nepal - up to 9% p.a.
Nepal investment bank Ltd. offers up to 9% p.a. for a special deposit account in Nepalese Rupee. Nepal Investment Bank Limited is one of the leading commercial banks of Nepal. Previously known as Nepal Indosuez Bank Ltd., the bank was established in 1986 as a joint venture between Nepalese and Credit Agricole Indosuez.
In Nepal, Indian Rs 500 and Rs 1,000 notes are not accepted. So, Indians carry Rs 100-notes. Everywhere you can pay in Indian Currency. The exchange is as follows: IC 100= NC 160.
In Nepal, Indian Rs 500 and Rs 1,000 notes are not accepted. So, Indians carry Rs 100-notes. Everywhere you can pay in Indian Currency. The exchange is as follows: IC 100= NC 160.
Pakistan Deposit rates up to 13% p.a.
The Royal bank of Scotland is offering deposit rates up to 13% p.a.
27 October 2009
Russian bank offering 11% p.a. for EUR deposit
I have just received confirmation from bank in Russia that until 31 December 2009 they offering 11% p.a. for a 18 month-deposit.
Sent 28 October 2009 : Thank you for your interest in our services. I am glad to confirm that the interest rate for EUR is 11.0% per year for 18 months.
This interest rate is valid for any sum exceeding € 100 000.
The standard interest rate within EUR for deposits
under € 100 000 amounts to 10%. But, as soon as your client has decided to
open such a time deposit with our Bank, he immediately gets a Platinum
status. That is why we would like to offer him to take an additional advantage
(+1%) and to gain some extra returns. - The Head of Client Department.
Sent 28 October 2009 : Thank you for your interest in our services. I am glad to confirm that the interest rate for EUR is 11.0% per year for 18 months.
This interest rate is valid for any sum exceeding € 100 000.
The standard interest rate within EUR for deposits
under € 100 000 amounts to 10%. But, as soon as your client has decided to
open such a time deposit with our Bank, he immediately gets a Platinum
status. That is why we would like to offer him to take an additional advantage
(+1%) and to gain some extra returns. - The Head of Client Department.
South Africa interest rate unchanged at 7%
October 2009 - FRANKFURT (MarketWatch) -- South Africa's central bank maintained its benchmark interest rate unchanged at 7% on Thursday, meeting market expectations. "Economic growth is expected to improve in the coming months, but is likely to remain below potential for some time," the South African Reserve Bank said in a statement. "Domestic growth prospects are dependent to an extent on the global recovery which appears to be uneven across countries and regions." The substantial electricity tariff increases requested by public utility Eskom are "the main longer-term threat" to the inflation outlook, the central bank said.
26 October 2009
How to make money from Aussie interest rates
In a world of minuscule and moribund interest rates, the Aussies are the only industrialized market where rates are rising – a tasty morsel for an investment.
Vietnam banks pushing up interest rates in hopes of luring deposits
Oct 2009
It’s generally understood that SBV wants to keep loan interest rates low. However, banks still keep raising deposit interest rates.
It’s generally understood that SBV wants to keep loan interest rates low. However, banks still keep raising deposit interest rates.
The Bank for Investment and Development of Vietnam (BIDV) and Agribank, which typically do not join the ‘interest rate race,’ nudged up their rates last week, following the lead of private sector banks. The two state-owned banks are now offering annual interest rates on two year Vietnamese currency deposits are now about 8.8 percent.
1001 reasons behind interest rate hike
Explaining the interest rate increases, bankers say that they need more capital to get ready to lend in the event that the Government announces another economic stimulus package. They argue as well that they must offer high interest rates to retain depositors, who would otherwise leave banks for the stock market or real estate market in search of more attractive profit.
Yet another reason offered is that banks are intent on mobilizing long term capital at what they consider to be a lower cost than they will have to pay in the future.
Banks may want to secure long term deposits to support long term loans, but depositors seem only willing to make short term deposits. The banks’ strategy is evidently to sell depositors short term notes now and later to offer them other incentives to persuade them to roll over these deposits at maturity.
More harm than good?
Industry experts have warned banks against engaging in a cutthroat interest rate race. Many have pointed to the central bank’s decision to hold the basic interest rate at seven percent for October 2009 as meaning that it wants commercial banks to keep low interest rates to provide low cost capital to the economy.
The deposit interest rates now being offered seem high if in fact and as predicted, price inflation will be held to seven percent or less in 2009. However, noting the attraction of the stock market and real estate ventures, Duong Thu Huong, Secretary General of the Vietnam Banking Association, said that banks are finding difficult to attract capital even when they offer deposit interest of 10.5 percent per annum.
Ho Huu Hanh, Director of the HCM City Branch of the State Bank of
25 October 2009
Belize - High Interest Rates are Crushing the Working Class
Deposit rates in Belize are around 10% p.a. higher than any other country in the region.
Malta - EUR 2 year deposit 3% p.a.
The bank of Valletta in Malta is offering a 2 year deposit at 3% p.a. with interest paid quarterly. This is about 1% more than any other EU bank.
23 October 2009
Moldova - the hidden strong currency with high rates
Banks offering 14% - 16% p.a. on Moldovan Lue.
Strong and stable currency.
Subsidiary of Society Generale.
Strong and stable currency.
Subsidiary of Society Generale.
22 October 2009
Ukraine drops rates - Indonesia banks coerced to drop rates
- Ukraine October 2009 - Ukraine’s banks have started to lower deposit rates cutting interest rates on short-term deposits in hryvnias and on one-year deposits in foreign currency.
- Indonesia Aug 2009 - 15 Large Banks Agree To lower deposit rates but so far have been slow to implement.
Russia - Economy improves
With the Russian economy improving, rising Ruble and with long-term deposit rates on Rubles around 16% p.a., looks like an ideal time to place deposits in Rubles. These rates won't be around for long.
19 October 2009
Tajikistan - 18% p.a for USD
Without a doubt, USD deposit rates of 18% p.a. are highest in the world for eurocurrency. However, administration is a nightmare
Russia - Ruble deposits around 15% p.a.
With oil on the march again, it seems safer to deposit in Russian banks paying on average 15% p.a. in Rubles.
Dominican Republic - 12% p.a. for Peso
The central bank of Dominican Republic is paying 12.0% p.a. for Peso deposits. The 25% withholding tax can be reduced if you get your bank to deposit in their name on your behalf (viz. fiduciary deposit), as this reduces withholding tax to 10%
Armenia - 10% p.a. for USD / EUR
Now that Armenia has signed peace treaty with Turkey, its worth looking at their deposits, especially as they pay 10% p.a. on USD / EUR / GBP deposits.
Non resident withholding tax on interest is 10%, meaning foreigners will net 9.0% p.a.
Non resident withholding tax on interest is 10%, meaning foreigners will net 9.0% p.a.
Moldova - 16% p.a. in MDL
The Moldova banks are offering 16% on local currency deposits. However the MDL has been very strong over the past 5 years, for instance keeping value with the Swiss Franc. Withholding tax for foreigners is 10%, meaning non-residents will still net 13.5%.
Russia - 12% p.a. for USD deposits
Banks in Russia now offering 12% p.a. for 18 month deposits. Withholding tax is 35% of the interest over 9%.
However you have to open the account in person or get a representative to do so on your behalf. Also your passport has to be translated into Russian, and then the translation must be certified by a notary. Then you must go to a local municipal or provincial office to get the certified document stamped with an apostille of the Hague. An apostille means the state verifies that the notary is on the official list of those who can certify copies.
However you have to open the account in person or get a representative to do so on your behalf. Also your passport has to be translated into Russian, and then the translation must be certified by a notary. Then you must go to a local municipal or provincial office to get the certified document stamped with an apostille of the Hague. An apostille means the state verifies that the notary is on the official list of those who can certify copies.
New Zealand highest deposit rates - over 10% p.a.
The highest paying deposits in New Zealand is over 10.0 p.a. with Goldband Finance. Foreigners only pay 2% tax on the interest i.e. keep 98% of the interest.
It's easy for foreigners to remotely open accounts.
It's easy for foreigners to remotely open accounts.
Azerbaijan high interest rates
Azerbaijan provides incredible opportunities. Strong oil based economy with petrodollars flowing in fast and furious. The State controlled bank of International bank of Azerbaijan offers up deposits with annual payment so interest to 16% p.a. for USD and 14% for EUR. There is no withholding tax.
And its easy to open accounts without visiting the country.
And its easy to open accounts without visiting the country.
Highest deposit interest rates in the world
This blog we will discuss where to find the highest interest rate deposits in the world. These are mainly for hard currencies such as Euro, Sterling, US dollar, Ozzie, Kiwi and Loonie and CHF. On occasion we will discuss deposits in the usual carry trade currencies such as Brazilian Real, South African Rand, Ruble, etc.
I will discuss how as a foreigner you can open these bank accounts. Also relevant will be the applicable withholding taxes, deposit insurance schemes and the credit ratings of these banks.
More is available from my site.
I will discuss how as a foreigner you can open these bank accounts. Also relevant will be the applicable withholding taxes, deposit insurance schemes and the credit ratings of these banks.
More is available from my site.
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