Saudi Arabia decided not to renew the petrodollar agreement it had had with the United States for 50 years and which expired on June 9.

The country located in Western Asia did not renew the agreement through which it sold oil in US dollars, opening the door to marketing in other currencies, such as the yen, yuan, euro, among others.

The petrodollar agreement was signed in 1974 with Henry Kissinger as its architect. Saudi Arabia maintained the commitment until 2022, when it began to fail to comply with the agreement. The Saudi kingdom made the decision to “handle itself with complete freedom in the marketing of oil through different currencies.”

The change assumed by Saudi Arabia is expected to accelerate the de-dollarization process that the BRICS are already talking about.

M.Pino

Source: canal26

(Reference image source: Delfino Barboza in Unsplash)

Visit our news channel on Google News and follow us to get accurate, interesting information and stay up to date with everything. You can also see our daily content on Twitter and Instagram

La entrada Saudi Arabia did not renew the petrodollar agreement with the United States apareció primero en Bitfinance.

The Minister of Economy of Argentina, Sergio Massa, reported the activation of the swap with China, through which the payment of imports from the Asian giant in yuan will be allowed to face the challenge of maintaining the level of international reserves, which in the last few weeks are falling significantly due to the economic impact of the drought that the country is going through, among others.

In a joint appearance with the Chinese ambassador in Argentina, Zou Xiaoli, the minister explained that this measure will allow payments worth 1,070 million dollars to be replaced, which will have a positive effect on the level of reserves.

With this change, the payments for these imports will “cease to weigh” on the outflow of dollars and will become part of the outflow of yuan. “It’s about defending the value of Argentina’s reserves,” Massa said.

This same week, the Argentine government stressed that they would use all the necessary tools to order the chaos that the rise in the dollar exchange rate is causing in the country and is already contemplating renegotiating the financing program with the International Monetary Fund (IMF).

K. Tovar

Source: El País

(Reference image source: file)

Visit our news channel on Google News and follow us to get accurate, interesting information and stay up to date with everything. You can also see our daily content on Twitter and Instagram

La entrada Argentina will allow payment of imports in yuan apareció primero en Bitfinance.

ECB President Christine Lagarde recently pointed out that raising interest rates too quickly would stifle the Eurozone’s recovery. “Raising the main interest rate of the European Central Bank now would not reduce the historically high levels of inflation in the Eurozone and would only harm its economy.”

Lagarde stressed that the ECB will only withdraw its aggressive negative interest rate stimulus policy gradually and when conditions allow it because that would not solve any of the current economic problems, on the contrary, from his point of view, that could exacerbate the economic situation.

“That would not solve any of the current problems (…) On the contrary: if we act too hastily now, the recovery of our economies could be considerably weaker and employment would be put in danger. (…) Now we can adjust, calmly, step by step, our monetary policy instruments (…) and when the economic data allows it, we will do it”, the president of the ECB insisted.

Bond market in fall

Lagarde’s statements have had a significant impact on the financial market, specifically on the bond market, which plummeted “by opening the door to the ECB’s first rate hike in more than a decade, given the persistent upward pressure on prices.

Money markets were expecting a 50 basis point hike in the ECB’s deposit rate last December, but Lagarde is now signaling that a hike would not end high oil prices and supply problems that have fueled inflation.

The euro zone registered an inflation of the order of 5.1 % and the European Commission indicated that it estimates an inflation for this year of 3.5 %, well above 2 % established as a target by the ECB.

The European financial entity had declared in December that it would continue buying bonds to stimulate the decline in inflation at least until October this year and will only raise rates once these purchases are completed. However, it is very likely that it will change the line in March when its next monetary policy meeting takes place.

Currently its ECB interest rate on bank deposits stands at -0.5 %. ECB Chief Economist Philip Lane, who is responsible for monetary policy proposals, has been more cautious, saying the current situation does not warrant significant tightening.

M. Rodriguez

Source: publico.es

La entrada ECB will continue with its economic stimulus policy apareció primero en Bitfinance.

The European Commission continues to work on the development of the digital euro and they estimate to finalize a first prototype of their digital currency by the end of this year. But the commission plans to launch it on the market, regulated and official, by 2025 when it will compete with the Chinese cryptocurrency and the one that the United States is developing.

The countries of the world are working and joining efforts to work on a digital version of their fiat currencies. Thus, it is estimated that the dollar, the yuan and the euro will have their digital version.

The popularity of cryptocurrencies and the growing interest from traditional banks and institutions have set off alarm in central banks, which have been working for some time to create these digital versions of their own currencies.

Public and regulated digital currencies

The Eurozone is very clear about the importance of having a digital euro and the European Central Bank is immersed in this effort, which is why it is carrying out internal tests to finalize the project.

The director of the European Central Bank (ECB), Christine Lagarde, announced last July 2021 that approximately 80 central banks were interested in the creation of cryptocurrencies and one of them was the ECB, which initiated the conceptualization of the project in October of last year.

Currently, the European Commission is preparing the legislation that will regulate the digital euro and those responsible estimate that it will be completed by the beginning of 2023. At this time, the planning carried out seems to be very good because during the legislative process of the European Union, “the negotiations with the Member States and also in the European Parliament before finally becoming law”.

Some representatives of the ECB explained that the digital euro “would complement cash, it does not come to replace it”. But it would also become a solution to the attractiveness of cryptocurrencies such as Bitcoin or Ethereum which, despite not being used as currencies for buying and selling everyday goods and services already have derivative or alternative cryptocurrencies that are positioning themselves in that market segment.

Public consultation for the digital euro

The European Union plans to carry out a public consultation process, within a few weeks, in order to reaffirm the use that European citizens will give to the digital euro, as recently reported by the EU’s financial director, Mairead McGuinness, at an event about FinTech.

Once the public consultation has been carried out, it is planned to carry out an assessment on the impact that the digital euro could have on a potential destabilization of the financial system, since it could affect the liquidity of private banks if people convert all their money into the currency regulated and managed by the ECB.

M. Rodríguez

Source: xataka.com

La entrada The European Union estimates to launch its digital currency in 2025 apareció primero en Bitfinance.