Russia to be first BRICS country to ratify $100bn currency pool - envoy

Published time: April 03, 2015 16:13

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Reuters/Ueslei Marcelino

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BRICS, Economy, Finance,Investment, Ratings

Russia aims to become the first country in the BRICS group of leading emerging economies to ratify an agreement on the foreign currency reserve pool, according to Russian Foreign Ministry Ambassador-at-Large Vadim Lukov.

"An agreement will be ratified soon on establishing a pool of foreign currency reserves. Russia will most likely be the first country to do this," Lukov said on Friday.

South Africa will contribute $5 billion, Russia, India and Brazil will allocate $18 billion each while China will provide the remaining funds, according to the envoy.

The goal of the pool is so that BRICS member states could urgently replenish their liquidity from it in different proportions to resolve problems with their balance of payments.

Read more​BRICS leadership passes to Russia, $100bn development bank ‘main priority’

Meanwhile, Moscow is sure that new members will eventually join the New Development Bank (NBD), as the group wants to avoid it being called the ‘Bank of BRICS’.

In July, BRICS members signed an agreement in Brazil to forge ahead with the $100 billion NDB, which would also possess a reserve currency pool worth over another $100 billion.

BRICS Rating Agency

Experts from BRICS countries are also discussing the creation of a new independent rating agency the Russian envoy said, adding that China’s rating agency Dagong was currently in talks with Russia on the issue. The new Universal Credit Rating Group (UCRG) is to rival the so-called ‘Big Three’ that currently dominate the industry. The creation of an alternative agency was raised after Standard & Poor's, Moody's, and Fitch Group downgraded their rating regarding Russia’s creditworthiness following the Western anti-Russia sanctions.

“After the recent cases with Big Three rating agencies issuing politicized and biased assessments of the state and development prospects of Russian economy, this issue is of particular relevance,” Vadim Lukov told journalists, adding that Russia is not the first country to suffer from “rating aggression and rating dumping.”

Read moreChina and Russia to launch new credit rating agency in 2015

The BRICS grouping of emerging market economies will meet for summit twice this year; on July 8-9 in Ufa, and either on November 15 or 16 on the sidelines of the G20 summit in Antalya. Some 120 events will be held in 16 cities within the program of Russia’s BRICS presidency program. Nineteen meetings will be held at the ministerial level.

Russia took over the presidency of the BRICS group from Brazil on Wednesday. President of the Russian Chamber of Commerce Sergey Katyrin became the BRICS Business Council head.

The BRICS group of prominent emerging economies was established in 2010, when South Africa joined Brazil, Russia, India and China in what was previously known as BRIC. The BRICS countries make up about 40 percent of the world's population and command a combined economy of about $16 trillion.

Obama and Cuba's Raul Castro to 'interact' at Summit of the Americas: US official

PUBLISHED ON APR 4, 2015 9:39 AM

US President Barack Obama (right) and Cuban counterpart Raul Castro will have an "interaction" when they attend next week's Summit of the Americas in Panama. It will be the first between the two leaders since the historic rapprochement between Havana and Washington. -- PHOTOS: REUTERS, EPA 

WASHINGTON (AFP) - United States President Barack Obama and Cuban counterpart Raul Castro will have an "interaction" when they attend next week's Summit of the Americas in Panama, a US official said Friday. It will be the first between the two leaders since the historic rapprochement between Havana and Washington.

"Clearly President Obama knew when he made the decision to go to the summit, and he knew that Cuba had been invited to the summit... that there would be an interaction," US State Department official Roberta Jacobson said at the Brookings Institution.

"The leaders are together a lot of the time. And so there will be an interaction with Raul Castro," she added, declining to speculate about the nature of any possible meeting between the two leaders.

But she added Mr Obama's only confirmed meeting was with Panama leader Juan Carlos Varela. "None of the President's meetings are scheduled other than his bilateral with President Varela as the host," she said. "So I don't know exactly what kind of an interaction that will be. But they've obviously already spoken on the phone... and there's been a lot of interaction since then at a lower level."

US warns Israel PM not to 'betray' trust on nuclear deal-3 Mar 2015

US warns Israel PM not to 'betray' trust on nuclear deal

US Secretary of State John Kerry Monday warned Israel's prime minister against revealing details of an emerging Iran nuclear deal on the eve of the Israeli leader's speech to the US Congress. 

PHOTO: AFP

3 Mar6:46 AM

[GENEVA] US Secretary of State John Kerry Monday warned Israel's prime minister against revealing details of an emerging Iran nuclear deal on the eve of the Israeli leader's speech to the US Congress.

While he did not mention Benjamin Netanyahu by name, Mr Kerry told reporters in Geneva he was "concerned by reports" that "selective details" of the deal aimed at curbing Tehran's nuclear programme would be revealed in the coming days.

His deputy spokesman Marie Harf went further, saying discussing the contents of classified briefings by US officials to Israelis would "betray" America's trust.

"We've continuously provided detailed classified briefings to Israeli officials to keep them updated and to provide context for how we are approaching getting to a good deal," she told reporters in Washington.

"Any release of any kind of information like that would, of course, betray that trust." The comments come after an Israeli official said the Jewish state knew about the emerging agreement and that the prime minister would elaborate in his congressional address.

Mr Kerry launched a series of talks with his Iranian counterpart Mohammad Javad Zarif in the Swiss lakeside town of Montreux late Monday as they seek to pin down a deal by a March 31 deadline.

"The best way to deal with the question surrounding this nuclear programme is to find a comprehensive deal, but not a deal which comes at any cost," he told reporters.

"We have made some progress, but we still have a long way to go, and the clock is ticking." The P5+1 group of world powers that are negotiating with Iran have only a few more weeks to reach a political framework for a deal, with the final technical details to be arrived at by June 30.

But Israel is worried the deal will ease sanctions on Tehran - which is what Iran wants - without applying sufficiently stringent safeguards to stop Iran acquiring enough fissile material to develop an atomic bomb.

AFP

    

Saudi king hopes final Iran deal will boost security

Saudi King Salman has told US President Barack Obama that he hoped a final nuclear deal between world powers and Iran would strengthen regional and world security, official media said. 

PHOTO: AFP

4 Apr7:20 AM

[RIYADH] Saudi King Salman has told US President Barack Obama that he hoped a final nuclear deal between world powers and Iran would strengthen regional and world security, official media said.

In a phone call with Obama on Thursday, King Salman "expressed his hope that a final binding deal would be reached to reinforce the stability and security of the region and the world," the SPA news agency said.

A framework agreement aimed at curbing Iran's nuclear drive was clinched on Thursday after marathon talks in Switzerland.

It marked a major breakthrough in a 12-year standoff between Iran and the West, which has long feared Tehran wants to build an atomic bomb.

Iran and Saudi Arabia, the foremost Shiite and Sunni Muslim powers in the Middle East, have had troubled relations in recent years after taking different sides in the Syrian civil war.

Relations have been further strained by the conflict raging in Yemen, where a Saudi-led coalition has waged more than a week of air strikes against Iran-backed Shiite rebels.

Mr Obama said Thursday he had invited Gulf leaders to a spring summit at Camp David to discuss security cooperation in the region.

Saudi Arabia fears that if too much of Iran's nuclear programme is left intact it will still have the ability to obtain an atomic bomb, and there are concerns that Riyadh could seek its own nuclear capability.

The kingdom's former intelligence chief, Prince Turki al-Faisal, warned last month that "whatever comes out of these talks, we will want the same", specifically uranium enrichment capability.

If an agreement is seen as too weak, Saudi Arabia will try to find a way to counter-balance it, a Western diplomat said.

"They will certainly seek a way of balancing what would be seen as an advantage on the Iranian side," said the diplomat, asking for anonymity.

Saudi Arabia would first ask for "security assurances" from the United States and other major powers that negotiated with Iran.

If that did not work, the kingdom could seek its own deal with nuclear-armed Pakistan, a longtime ally of Riyadh, the diplomat said.

Saudi Gulf partners Oman and Bahrain also welcomed the deal reached in Lausanne.

A statement from the foreign ministry in Muscat said that a final deal, to be reached by June 30, should open "a new era for more regional and international security and stability".

Unlike other Gulf monarchies, Oman enjoys good relations with Iran, which enabled it to play a key mediating role between the West and Tehran over the nuclear programme.

Bahrain, whose ties with Iran remain tense, said it hoped Tehran would "change its policies and not interfere in the domestic affairs" of its Arab neighbours, the state-run BNA news agency reported.

AFP

    
 

Fed has one more reason to delay rate rise as hiring slumps

Fed Chair Janet Yellen and her colleagues last month opened the door to an increase as soon as June, while also suggesting in forecasts that September may be a more likely time. 

PHOTO: REUTERS

4 Apr9:22 AM

[WASHINGTON] A hiccup in the jobs data may give Federal Reserve officials pause as they ponder the right time for a liftoff.

Employers in the US added 126,000 workers in March, the fewest since December 2013, Labour Department data showed on Friday. Revisions to prior months disappointed as well, subtracting 69,000 jobs from the previous counts for January and February.

The Fed is watching for the economy to reach or approach full employment and generate higher inflation before raising interest rates from near zero. Fed Chair Janet Yellen and her colleagues last month opened the door to an increase as soon as June, while also suggesting in forecasts that September may be a more likely time.

Richmond Fed President Jeffrey Lacker said on Friday in a statement to Bloomberg that the report doesn't alter his view on policy. Lacker, who votes on policy this year, said in a March 31 speech that the case for raising rates will remain "strong" at the June meeting unless economic reports diverge "substantially" from projections.

"The payroll report was a bit disappointing, but this followed a fairly long run of strong reports," Mr Lacker said. "By itself, this doesn't meaningfully change my economic outlook or my policy assessment."

WINTER WEATHER

The jobs figures followed a spate of data showing the economy cooled in the first quarter as the oil patch weakened, bad winter weather limited consumer spending and the strong dollar hurt the nation's manufacturers. The gain in March payrolls snapped 12 straight months of 200,000-plus monthly gains, the longest such stretch since 1995.

"This single report will not necessarily result in the Fed changing tack on its view of policy tightening this year," Millan Mulraine, a research strategist at TD Securities USA LLC in New York, wrote in a note after the report. "What it will do is weaken the argument for a mid-year hike" and raise the stakes riding on the next few reports, he said.

The odds of a June liftoff implied by federal funds futures fell to 11 per cent after the report from 18 per cent Thursday. The implied probability of a September rate rise also slumped after the release, dropping to 35 per cent from 39 percent as of 12.15pm New York time Friday.

Options on eurodollar futures imply traders see only a 47 per cent chance the Fed will raise rates this year and just a 55 per cent chance of an increase by March 2016. The central bank has kept its main rate near zero since December 2008.

UPBEAT OUTLOOK

Even with the softer jobs numbers, employment opportunities are keeping Americans upbeat, laying the ground for a rebound in spending. The unemployment rate held at 5.5 per cent, the lowest level since May 2008, and worker earnings improved, the report also showed.

Hourly pay was a silver lining, rising by 0.3 per cent from the prior month and 2.1 per cent from a year earlier and in line with the average since the expansion began in June 2009.

Goods producers, including factories, builders and oil and gas support companies, cut jobs last month. Manufacturing payrolls dropped for the first time since July 2013 and the employment gain in the restaurant industry was the weakest since June 2012.

Payrolls in mining and logging, which include oilfield services, declined by 11,000 after a similar drop in February.

Over the past three months, employment has fallen by 29,000 in those fields, the worst since a similar period ended in July 2009. Crude prices have slumped 54 per cent since a June 2014 high.

RECOVERY DENTED

"We've taken a bit of a dent in the recovery," said Ethan Harris, co-head of global economics research at Bank of America Corp in New York, and a former Fed analyst.

At the same time, "the broader economy is not as weak as the recent numbers have suggested, and we expect wage pickup going forward. We think there's going to be enough improvement that the Fed can tick the wage box, tick the labour market box, and raise rates sometime later in the year." Mulraine of TD Securities maintained his projection for an increase in September, though he said the "balance of risks" is shifting to a later start.

Policy makers will get two more employment reports before their meeting on June 16-17, when they will also release new economic and interest-rate forecasts.

FOMC PROJECTIONS

Fed officials in March lowered their median estimate for the main rate at the end of 2015 to 0.625 percent, compared with 1.125 percent in December forecasts. The estimate for the end of 2016 fell to 1.875 percent from 2.5 percent, according to the Federal Open Market Committee's quarterly Summary of Economic Projections.

The weak payrolls number could cause FOMC members to turn increased attention to jobs data and away from inflation "at the margin," said Ray Stone, managing director at Stone & McCarthy Research Associates in Princeton, New Jersey.

He said they'll have to see if the US returns to its strong job-adding streak. "Even though we had a downshifting here, I think the FOMC has to be pretty satisfied with the broader trends in employment." The jobless rate held at a six-year low of 5.5 per cent in March, near the level policy makers estimate for what constitutes full employment. Most project it is equivalent to a 5 per cent to 5.2 per cent unemployment rate, down in March from the 5.2 per cent to 5.5 per cent range they had in December.

TREASURY'S DYNAN

The weaker payrolls reading doesn't alter the outlook for the economy, according to Karen Dynan, the Treasury Department's chief economist and a former top researcher at the Fed board during a 17-year career there.

"Domestic fundamentals look strong" and the U.S. is poised for above-trend growth in 2015, Ms Dynan said in an interview in Washington following remarks at a Fed conference.

The economy expanded at a 2.2 per cent annualized pace in the fourth quarter. Gross domestic product probably rose at a 1.5 per cent annualized pace in the first quarter, according to the median estimate in a Bloomberg survey of economists from March 30 to April 1.

Billionaire investor Bill Gross said the disappointing jobs report won't dissuade the Fed from raising interest rates by September. "They want to get off zero, if only to prove that they don't have to stay at zero for a long, long time," Mr Gross, who runs the US$1.5 billion Janus Global Unconstrained Bond Fund, said in a Bloomberg Television interview on Friday.

Ms Yellen said last week interest rates will probably be raised in 2015 and made the case for a cautious approach to subsequent increases. Speaking in San Francisco, Ms Yellen cited strong gains in the labour market as a sign that restraints on the economy are abating.

The payrolls report "will give the Fed less confidence that the economy is ready to endure the policy liftoff as early as June," Bloomberg economist Carl Riccadonna and his colleagues wrote after the release.

Robert Brusca, president of Fact & Opinion Economics in New York, agreed. "I don't understand how, with the economy this weak, the Fed can even talk about raising interest rates," he said.

BLOOMBERG

    
 

Obama, Congress tilt over Iran deal

PUBLISHED ON APR 4, 2015 2:45 AM

President Barack Obama (above) now has a framework nuclear deal with America's Iranian foe, but as he tries to build it into a binding accord he faces enemies closer to home. Can he prevent the US Congress from torpedoing his diplomatic efforts to contain Teheran? -- PHOTO: REUTERS

WASHINGTON (AFP) - President Barack Obama now has a framework nuclear deal with America's Iranian foe, but as he tries to build it into a binding accord he faces enemies closer to home.

Can he prevent the US Congress from torpedoing his diplomatic efforts to contain Teheran?

"If Congress kills this deal, not based on expert analysis and without offering any reasonable alternative, then it's the United States that will be blamed for failure of diplomacy," Obama said Thursday.

"International unity will collapse and the path to conflict will widen."

The President has not denied Congress' role in the process. His aides regularly troop to Capitol Hill to inform and consult members of the Republican-controlled legislature.

His chiefs of diplomacy, defence, the Treasury, and the military have all appeared before the Senate and the House of Representatives to address lawmakers' qualms over the negotiations.

On Thursday, the outlines of a final deal were unveiled in Switzerland after negotiations between six world powers and Iran.

A final deal is to be completed by June 30.

But US lawmakers have proven tough to win over and still have deep reservations - some real, some perhaps politically opportunistic.

Opponents of a deal believe Obama is obsessed with his place in history, and has made too many concessions, abandoning US allies Israel and Saudi Arabia in the process.

RAISING THE BAR

Their eyes fixed on the 2016 elections, Republicans have sought to impose their own criteria on the deal, raising a bar that by design is higher than the commander-in-chief's: the halting of all uranium enrichment by Iran, transparence of its military programmes, and closure of its underground facility at Fordo.

Thanks to the efforts of the Democratic minority in Congress, the administration has so far succeeded in using parliamentary procedures to delay two Bills on Iran.

The furthest advanced of the two is the Corker-Menendez Bill, sponsored by the Republican chairman of the Senate Foreign Relations Committee, Bob Corker, and Democrat Robert Menendez.

It would give the Congress the right to review any final agreement, before any US sanctions on Iran are lifted.

Obama has vowed to veto the Bill in its current form, as well as a separate Bill that would impose additional sanctions on Iran.

"We think it's best for members of Congress to take a look at the framework and then give the space to negotiate the final details between now and June," said a senior administration official.

Obama has exhorted lawmakers to rise above political gamesmanship, while warning that interfering in the negotiations increases the risk of a military confrontation.

DEMOCRATIC DEFECTIONS

But the Republicans have not been deterred.

A committee vote on Corker-Menendez is still scheduled for April 14, when the Congress returns from a Spring break.

No date has been set for a vote by the Senate as a whole, however, and Senate Majority Leader Mitch McConnell, who is traveling abroad, has kept his silence.

"Rather than bypass Congress and head straight to the UN Security Council as planned, the administration first should seek the input of the American people," said Corker.

His Republican colleagues are following the same line. The White House's problem is that more and more Democrats are joining them.

Nine of 46 Democratic Senators are co-sponsors of Corker-Menendez, and only four more Democratic defections are needed for a veto-proof, two-thirds majority.

So a lot rides on the White House's ability to persuade sceptical Democrats to hold their fire until the end of June.

Questioned by AFP, some refrained from comment on Friday. Others, like the new ranking Democrat on the Senate Foreign Relations Committee, Ben Cardin, said they were taking their time to think it over. Still others, like Menendez and Tim Kaine, reaffirmed their support for the Bill.

The debate over the Iran deal seems likely to turn partisan, poisoned by the start of the 2016 US presidential campaign.

Former Florida governor Jeb Bush, who has not formally announced his candidacy but currently leads the Republican field, lost no time in denouncing the agreement.

A partisan fight could keep Democrats in Obama's corner.

"I'm a co-sponsor of the Bill, but if I see this slipping toward pure partisanship and we're going to try to embarrass the President, I'm off the Bill," Senator Angus King, an independent from Maine who caucuses with the Democrats, told CNN.

China former security chief charged with bribery, abuse of power

China's former security chief Zhou Yongkang was charged on Friday with bribery, abuse of power and disclosing state secrets, authorities said, making him the most senior official prosecuted in decades and setting the stage for a dramatic trial. 

PHOTO: EPA

3 Apr10:42 AM

[BEIJING] China's former security chief Zhou Yongkang was charged on Friday with bribery, abuse of power and disclosing state secrets, authorities said, making him the most senior official prosecuted in decades and setting the stage for a dramatic trial.

Zhou is the most prominent victim of President Xi Jinping's much-publicised anti-corruption drive, which has targeted high-level "tigers" as well as low-level "flies".

He had a background in the oil industry and accumulated vast power as he rose through the ranks to become a member of the Communist Party's elite Politburo Standing Committee, the most powerful body in China.

"The defendant Zhou Yongkang... took advantage of his posts to seek gains for others and illegally took huge property and assets from others, abused his power, causing huge losses to public property and the interests of the State and the people," said the indictment, posted online by prosecutors.

"The social impact is vile and the circumstances were extraordinarily severe," it said, adding that he also "intentionally leaked state secrets".

The document was filed with a court in the northern port of Tianjin, the Supreme People's Procuratorate added.

Chinese courts are closely controlled by the ruling party and a guilty verdict is a certainty.

Days after his arrest, the Communist Party's flagship People's Daily newspaper branded Zhou a "traitor" and likened him to several past turncoats who were all executed.

The proceedings will be the most significant in China since the Gang of Four, who included Mao Zedong's widow Jiang Qing, were put on trial and blamed for the chaos of the Cultural Revolution.

Officials have promised that it will be open in accordance with Chinese law, but attendance at previous high-profile cases has been closely controlled.

When former high-flyer Bo Xilai - who fell from grace after a scandal erupted around the killing of a British businessman - was prosecuted for bribery, non-official media were limited to a "live" written transcript of the proceedings, whose accuracy was impossible to verify independently.

Zhou's fall sent shockwaves through the ruling party. After months of rumours, party authorities announced last July they were investigating him, and he was expelled from the party and formally arrested in December.

Communist authorities have touted the anti-corruption drive as a root-and-branch reform of the party over an issue that causes deep and widespread public anger.

But critics note that China has failed to implement institutional safeguards against graft, such as public asset disclosure, an independent judiciary, and free media, leaving the effort at risk of being used for political faction-fighting.

The Communist party is riven by factional divisions but consistently seeks to present a united front to outsiders.

Several of Zhou's allies have also been brought down in the campaign, among them Jiang Jiemin, the former head of the body that regulates China's state-owned firms.

He is a former head of the China National Petroleum Corporation, a post previously held by Zhou, and the two are reportedly part of a Communist Party faction with roots in the oil industry, known as the "petroleum gang".

AFP

    
 

Public's trust and keeping systems up to date key to Singapore's fight against corruption: PM Lee

Corruption laws being reviewed, CPIB to get more manpower, new reporting centre for whistleblowers

By

Lee U-Wenleeuwen@sph.com.sg@LeeUwenBT

Mr Lee speaking with (from left) Sgt Goh Wee Kian from the police, Sgt Samuel Anadaraj from the SCDF and Sgt Tan Kai Xiang from the police at the Integrity in Action: Public Service Values Conference 2015 held at the Suntec City Convention Centre. 

PHOTO: ALPHONSUS CHERN/THE STRAITS TIMES

14 Jan5:50 AM

Singapore

PRIME Minister Lee Hsien Loong on Tuesday described the thousands of officers in Singapore's public service as "clean, zealous and well-qualified", but nonetheless pledged that the government would keep up its efforts to keep corruption in check.

Work is already under way to review the Prevention of Corruption Act, the country's principal anti-corruption law enacted in 1960.

And the Corrupt Practices Investigation Bureau (CPIB), an independent law enforcement agency that reports directly to the Prime Minister's Office, will get 20 per cent more manpower.

Speaking to about 600 public-service officers at the opening of a conference on public service values, Mr Lee also disclosed plans to set up a one-stop corruption-reporting centre.

The centre, likely to be located in the city area to make it accessible, will at the same enable whistleblowers to file their reports discreetly; this facility will come on top of the CPIB's 24-hour hotline and walk-in service at its headquarters in Jalan Bukit Merah.

The CPIB will also set up a permanent heritage gallery alongside the new reporting centre to better educate members of the public about anti-corruption issues.

Mr Lee said at the conference, organised by the CPIB and the Civil Service College and held at the Suntec Singapore Convention and Exhibition Centre, that fighting corruption goes beyond just having a strong CPIB, which has served Singapore well over the years.

On its part, the government must ensure it keeps all its systems up to date, such as by constantly reviewing procurement rules and spending limits, and tapping technology to spot irregularities in areas such as how public tenders are awarded.

"When we need to change (the rules) and when we find loopholes, we will fix them. After the Brompton bikes case, we changed our processes," said Mr Lee, referring to the case in which a former National Parks Board assistant director was convicted of lying to three auditors in 2012 over a S$57,200 deal to purchase 26 foldable bicycles.

"We may still need to buy foldable bikes, but we make sure we do it honestly and there's no hanky-panky involved."

A recurring theme in his half-hour address was that of trust.

A key reason why Singapore's public service has been able to do good work for the country is that the officers continue to enjoy the trust of the people:

"We trust the public service to carry out its duties capably and competently. We trust the public service to act with integrity, and always in the public interest. This trust that Singaporeans have in the public service as an institution, and each one of you individually, is critical."

The key to maintaining this trust, he added, is for the public service to uphold its policy of zero tolerance for corruption, regardless of the rank and seniority of the officers involved.

"If any of you does something wrong and breaches that trust, you not only let the public service and yourself down, but you also let Singaporeans down, and you can do a lot of damage," he said.

Likening corruption to a "cancer" that is difficult to weed out once it takes root, the prime minister described Singapore as a "shining exception" in the world and which has a strong reputation when it comes to having a clean public service.

This should never be taken for granted, he warned. He noted that the Republic had fallen two places to seventh in Transparency International's latest Corruption Perception Index.

Several recent high-profile corruption cases, such as the sex-for-contracts cases involving a senior officer and the misappropriation of funds by a CPIB branch head, have hurt Singapore's reputation both locally and around the world, he said.

The government keeps a close watch on Singapore's rankings internationally on corruption, transparency and the quality of its government.

"How others assess our performance has a very important influence - whether they are confident in Singapore, whether they are ready and prepared to invest here, whether they have respect for you and me and Singaporeans, and whether we can hold our heads high in the world," said Mr Lee.