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Forex Bureaux Face Imminent Shutdown - Modern Ghana
The Bank of Ghana is putting the activities of forex bureau operators in its monitoring radar for possible sanctions and license withdrawal. Suleiman Mustapha asks why
The Bank of Ghana has threatened to impose severe sanctions including license withdrawal of forex bureau operators who accept deposits and do large foreign exchange transactions.
Central Bank Governor and Chairman of the Monetary Policy Committee (MPC) of the Bank of Ghana, Mr Kwesi Amissah-Arthur has on the sidelines of an MPC news conference in Accra hinted some forex bureau operators are now accepting deposits and doing large foreign exchange transactions.
The bank is therefore setting out measures to monitor the activities of forex bureau operators in a bid to stem the rising spate of dollarization of the national economy.
“Yes we are worried that some of the forex bureau operators now accept deposits like the normal banks and transact large volumes of foreign exchange business”.
“They are part of the problem and we will soon be rolling out tough measures to stem their illegal activities”, the Governor said.
The Bank of Ghana is even more worried of the growing trend of dollarization, which he partly blamed on the activities of forex bureau operators.
According to the Governor, the central bank will continuously be reviewing the books and constantly monitor the activities of forex bureau operators for possible sanction in breach of the country’s foreign exchange rules.
“It is our view that this will contribute to restoring confidence in the cedi” he said, adding that “the Bank will issue the necessary notices to this effect in due course”.
“They are supposed to do spot transaction of the small foreign currency, which does not require having to go to the commercial banks to exchange”.
“But what we have observed is that some of them are accepting deposits and moving large volumes of foreign exchange around”, he added.
The Bank of Ghana has mopped up GH¢1.2 billion in excess liquidity from the system in a bid to stem the exchange rate pressure and reduce demand for dollars.
In a move to halt the growing trend of ‘dollarization’ and stabilize the cedi, the Central Bank is also reviewing the currency composition of the reserve requirements of commercial banks.
Dollarization is characterized by a tendency for businesses to sell their goods and services in foreign currencies, particularly, dollars.
The service providers quote exchange rates that are significantly off-market. The fringe exchange rates trickle down into the market and become benchmark rates, unduly influencing market rates.
The situation has fuelled price increases in the country and led the Bank of Ghana to tighten monetary policy, alter bank reserve requirements and reintroduce several bonds.
“The committee notes that the measures have begun to take effect. Increase in the policy rate have led to upward adjustments in rates of money markets instruments and improve the attractiveness of cedi assets compared to foreign currency assets”, Mr Amissah-Arthur said.
According to the Governor, though the Bank of Ghana was not considering abolishing the operation of foreign exchange accounts by citizens, it would move to restore the pre-eminence of the cedi in domestic transactions, which required strict adherence to the provisions of the Foreign Exchange Act 2006 (Act 723) and the accompanying regulations.
The Governor was worried about the large dollar deposits in commercial bank accounts, which he said had significantly contributed to the exchange rate pressure.
At the moment, the share of foreign currency deposits to total deposits in the banking system has increased from 27.9 per cent in April 2010 to 28.2 per cent in April 2011 and further to 31.8 per cent in April this year.
This means that some commercial banks have more foreign currency deposits than domestic currency in their total deposit.
The Bank of Ghana feared that those banks could be importing large volumes of foreign currency to service the needs of their clients.
During the first five months of the year, the cedi depreciated cumulatively by 15.1 per cent against the US dollar, compared to 1.9 per cent depreciation in the same period of 2011.
In recent weeks however, the pace of depreciation of the cedi has moderated as a result of the measures introduced to restore stability.
The real effective exchange rate depreciated by 6.8 per cent in January – April 2012, compared with a real appreciation of 5.9 per cent in the same period of 2011.
But Governor Amissah-Arthur assured Ghanaians that the end of the cedi fall was in sight
Forex: EUR/USD regains 1.2600 despite ZEW sentiment - NASDAQ
FXstreet.com (Barcelona) - ZEW sentiment survey showed a very large decline in the EMU and Germany in June: -20.1 (from -2.4) and -16.9 (from 10.8). A very negative economic sentiment as the euro area is deep in a tough financial and political crisis, with highlights in Greece and Spain.
Meanwhile, Spain raised €3.04B in the 12 and 18 month Treasury bill auction with higher yields as expected. The independent bank-audit report scheduled to be revealed on July 31 was delayed till September. A Spanish newspaper believes the final report will conclude there's a need of €150B for bank recapitalization, which would be much higher than the agreed €100B bailout.
After reaching as low as 1.2568, the EUR/USD was able to regain the 1.2600 level and is now hovering 1.2610/20. "On the upside, only regain of strong barrier at 1.2665 would turn focus higher", wrote Windsor Brokers analyst Slobodan Drvenica.
Money can't make you happy... if you are only spending it to impress others - Daily Mail
By Claire Bates
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Spending money on once in a lifetime experiences from luxury holidays to concert tickets won't make you happy, according to a surprise study.
But before you cancel that world cruise it's worth noting that you'll only fail to find contentment if your motive is to impress others.
'Why you buy is just as important as what you buy,' said assistant profressor Ryan Howell, from San Francisco State University, who led the study.
'When people buy life experiences to impress others, it wipes out the well-being they receive from the purchase. That extrinsic motivation appears to undermine how the experiential purchase meets their key psychological needs.'
Blissful holiday: As long as you're not just trying to impress someone else
Howell's previous findings showed that buying a life experience made people happier than when they bought material things, because it made them feel more competent and connected to others.
However, in the latest research Howell and his colleagues found that a person's motivation for making a purchase predicts whether these needs will be met.
After surveying 241 participants they found that people who choose to buy life experiences because they were in line with their desires, interests and values reported a greater sense of fulfillment and well-being. They were also less likely to feel lonely and had a greater sense of vitality.
However, people who chose life experiences to gain recognition from others reported feeling unsatisfied and less connected to others.
'The biggest question you have to ask yourself is why you are buying something,' Howell said.
'Motivation appears to amplify or eliminate the happiness effect of a purchase.'
The study has been published in the aptly named, Journal of Happiness Studies.
'Money' Mayweather tops the rich list – despite being in jail - The Independent
It is a remarkable accumulation for a man known as "Money" – who is currently serving a 90-day sentence in Las Vegas for domestic violence against a former partner. Mayweather's prison term, following a guilty plea in December, was even put on hold to allow him to take part in the second fight, against Miguel Cotto last month. Those 12 rounds in Las Vegas earned him $45m – the delay was approved because the fight was estimated to be worth up to $15m for the city.
Boxers claimed the top two spots, with Manny Pacquiao – one of only two men (with Mayweather) to defeat Ricky Hatton – $23m behind, but it is American football that dominates the 100 with 30 entries. Eleven sports are represented and the combined income of all 100 is $2.6bn. There are just two women in the top 100, both tennis players; Maria Sharapova, at 20, and Li Na, 81. The highest Briton, and footballer, is David Beckham in eighth. Mahendra Singh Dhoni is the highest-paid cricketer at 31. His total of $26.5m is some $2m more than Wayne Rooney and comes off the back of captaining India to World Cup glory on home soil.
Boxers hit jackpot: The Forbes Rich List
1. Floyd Mayweather
Boxing (Annual earnings $85m/£54.2m)
The 35-year-old earned nothing from endorsements, compared to Tiger Woods's $55m and the $45m collected by Roger Federer. Mayweather's immense income comes in large part because he promotes his own fights. That sees him retain all TV money and ticket sales income.
2. Manny Pacquiao
Boxing ($62m/£39.58m)
The Filipino gathered a relatively meagre sum of $6m from endorsements and collected his income from only two fights – one of which he lost, to Tim Bradley. A rematch with Bradley later this year will provide another huge pay day
3. Tiger Woods
Golf ($59.4m/£37.8m)
The former world No 1 has seen his earnings fall by $16m over the past year. His 30-month winless streak meant his on-course earnings dropped to $4.4m – less than a third of Luke Donald, the highest ranked British golfer in the list, at 48.
4. LeBron James
Basketball ($53m/£33.82m)
The 27-year-old Miami Heat star has a share in Liverpool FC as part of his wealth. He saw his salary cut because of the NBA lockout but two promotion deals in Asia helped take his endorsements to $40m.
5. Roger Federer
Tennis ($52.7m/£33.62m)
He has slipped behind Rafa Nadal and Novak Djokovic on the court, but off it the Swiss (left) still reigns as tennis's biggest earner. Endorsements make up $45m of his total.
6. Kobe Bryant
Basketball ($52.3m/£33.37m)
Lost $5m from his annual salary because of the lockout, but still took home $20.3m for his year's work.
7. Phil Mickelson
Golf ($47.8m/£30.5m)
He may just have shot his worst round in a US Open but the dollars keep rolling in. Mickelson, now 42, gathered $43m in endorsements compared to $4.8m in winnings.
8. David Beckham
Football ($46m/£29.3m)
His $9m annual salary is under half that of Cristiano Ronaldo but, with a high-profile Olympic role looming, his global profile is in no danger of dropping any time soon.
9. Cristiano Ronaldo
Football ($42.5m/£27.1m)
The Real Madrid winger has had a season to savour on the pitch and can expect to climb the list next year, especially if international success follows his club triumphs. His salary of $20.5m is the highest of any footballer in the world.
10. Peyton Manning
American Football ($42.4m/£27m)
Highest earner of the 10 NFL players on the list thanks to his $10m worth of annual endorsements.
Selected others
11. Lionel Messi, Football ($39m); 24. Lewis Hamilton, F1($28m); 26. Maria Sharapova, Tennis ($27.9m); 37. Wayne Rooney, Football ($24.3m); 63. Usain Bolt, Athletics ($20.3m)
Forex Trading Experts Offer an Alternative Online Trading Tool - Int'l Business Times
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"We at JFX.com can find a suitable tool and solution that are tailored to your trading style and money management preferences," notes Mr. Sabet.
He further adds that the continuous integration of the prices of nine key players in the sector (including Deutsche Bank, BNP, Royal Bank of Scotland, HSBC, Barclays, JP Morgan, Citibank and Bank of America) gives you the advantage over using a single reference with regards to prices.
JFX also distinguishes itself from the other market players as they charge low transaction fees and has a 24-hour technical support system that allows for a stable, secure and innovative trading environment. Transactions could also be paid via credit cards and accounts could be opened in 5 minutes.
To contact the editor, e-mail:
Forex: AUD/USD stalls below 1.0200, 5-week high - FXStreet.com
MONEY MARKETS-Banks' borrowing at ECB rises as Spain stress grows - Reuters UK
* Banks increase borrowing at ECB's seven-day tender
* Rise in demand reflects growing Spanish stress
* Growing ECB rate cut speculation seen weighing on Euribor
LONDON, June 19 (Reuters) - Bank borrowing from the European Central Bank rose on Tuesday as turmoil in the euro zone government bond markets pushed more banks to take up the ECB's regular offering of seven-day loans.
Demand for the funds, currently used largely by banks who can no longer borrow money affordably elsewhere, rose by 36 billion euros to 167 billion euros. The number of banks bidding at the auction rose to 101 from 94.
"The rise in the number of bidders points to signs of new stress. I would say Spanish names are behind that," said Matteo Regesta, strategist at BNP Paribas in London.
Spain has become the focus of the euro zone debt crisis over the last week after a bank rescue plan worth up to 100 billion euros failed to win market confidence and propelled 10-year bond yields above the 7 percent danger level.
Spanish banks have suffered huge losses on souring portfolios of property loans and most have been frozen out of the interbank market where banks borrow money to lend on at a profit. Data released on Monday showed Spanish banks' bad loans hit their highest since April 1994.
The increase in seven-day borrowing may herald rising market stress but is unlikely to have a major impact on money market rates, which have been pushed to rock-bottom levels by the huge amount of excess liquidity in the system.
Banks' total borrowing from the ECB is 777 billion euros more than their estimated needs, according to Reuters data , with most locked into long-term loans offered by the ECB in December and February to calm a previous bout of stress.
That excess of liquidity, along with growing speculation that the ECB may cut interest rates to boost the region's flagging economy, saw the benchmark interbank Euribor rate fall for a third successive session, to 0.657 percent.
The equivalent Libor rate, set by a smaller panel of banks based in London, also fell to a new record low at 0.56557 percent.
The prospect of cuts to the ECB's deposit and refinancing rates, boosted by recent comments from ECB policymakers, was the main factor driving rates lower, analysts said.
Barclays Capital analysts revised their ECB rate outlook to forecast a 50 basis point cut in the refinancing rate, to 0.5 percent, and a fall in the deposit rate to zero from 0.25 percent.
"In a scenario of the refi rate at 50 (basis points) and the deposit facility at zero, we would expect EONIA to fix at 10-15 bps in the reserve period, with three-month Euribor likely to decline to 40-45 bps," the bank said in a note.
The Eonia overnight rate fixed at 0.334 percent on Monday.
Money would make me happy! Not having to worry about how am I going to pay this bill or where do I find the money so I can get to and from work the week before pay day. Having the money and not the worries. Bliss
- Ross, Glasgow, 20/6/2012 00:12
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