Latest News | IMF Executive Board Completes the Last Review of Extended Credit Facility for Ghana

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March 20, 2019

• Ghana is concluding its four-year ECF-supported program.
• Executive Board decision allows to disburse the last tranche of SDR132.84 million (about US$185.2 million) to Ghana.
• ECF-supported program paved the way for a significant improvement of Ghana’s macroeconomic performance, though challenges remain.

On March 20, 2019, the Executive Board of the International Monetary Fund (IMF) completed the seventh and eight reviews under the Extended Credit Facility (ECF)[1] supported arrangement. This will make available to Ghana the cumulative amount of SDR132.84 million (about US$185.2 million).
Considering the authorities’ resolved to tackle difficult reforms, the Executive Board also approved the authorities’ request for a waiver of the nonobservance of a few program targets.
Ghana’s three-year arrangement was approved on April 3, 2015 (see Press Release No.15/159) for SDR 664.20 million (about US$925.9 million or 180 percent of quota at the time of approval of the arrangement). It was extended for additional year on August 30, 2017 and is to end on April 2, 2019. The arrangement aimed to restore debt sustainability and macroeconomic stability in the country to foster a return to high growth and job creation, while protecting social spending.
Following the Executive Board’s discussion, Mr. Tao Zhang, Deputy Managing Director and Acting Chair, issued the following statement:
“The authorities have achieved significant macroeconomic gains over the course of the ECF-supported program, with rising growth, single digit inflation, fiscal consolidation, and banking sector clean-up. Continued macroeconomic adjustment should underpin these improvements, as the 2020 elections approach.
“In a sign of the authorities’ commitment to fiscal consolidation, the end-2018 fiscal targets were met. Sustained fiscal discipline is needed to reduce financing needs and anchor debt dynamics. As stronger revenue mobilization is critical, the submission of the tax exemption bill is welcome, but needs to be complemented by efforts to strengthen tax compliance. Fiscal space is needed to support priority programs, while off-budget expenditures should be avoided.
“Progress on structural reforms needs to be intensified. Plans to improve public financial management and supervision of state-owned enterprises (SOEs), the establishment of a fiscal council, and the fiscal rule are welcome. Stronger monitoring of fiscal operations, including for SOEs, will help mitigate fiscal risks.
“Debt management has improved, though reliance on foreign investors has increased Ghana’s exposure to market sentiment and exchange rate risk. Debt collateralization and revenue monetization should be limited to avoid encumbering revenues. Planned infrastructure projects should be transparently managed, be consistent with debt sustainability, and ensure value for money.
“While achieving single-digit inflation is commendable, monetary policy should remain vigilant to guard against upside risks to inflation, also stemming from exchange rate developments. Rebuilding international reserve buffers, including through careful foreign exchange liquidity management, is welcome and critical to support greater resilience to external shocks.
“The authorities deserve praise for strengthening the banking sector and for resolving nine banks. Completing the financial sector clean-up, as planned, will support the provision of adequate and affordable credit to the economy.
“The Fund congratulates the authorities for successfully completing the ECF supported program and stands ready to support Ghana in its quest for economic prosperity.”

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[1] The ECF is a lending arrangement that provides sustained program engagement over the medium to long term in case of protracted balance of payments problems.

IMF Communications Department

MEDIA RELATIONS

PRESS OFFICER:
Phone: +1 202 623-7100Email: MEDIA@IMF.org

Press Release | CFTC’s Energy and Environmental Markets Advisory Committee to Meet April 17

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March 21, 2019
Washington, DC — The Commodity Futures Trading Commission’s (CFTC) Energy and Environmental Markets Advisory Committee (EEMAC) announced today that it will hold a public meeting on April 17, 2019 at CFTC’s Washington, DC headquarters.
CFTC Commissioner Dan M. Berkovitz, who is the sponsor of EEMAC, also announced the agenda for the meeting. This meeting will focus on the following three topics:

• derivatives markets’ responses to physical markets’ developments;
• exchange-traded energy derivatives markets; and
• the availability of clearing and other services in the energy derivatives markets.

The meeting agenda may change to accommodate other EEMAC priorities. For agenda updates, please visit EEMAC at cftc.gov.       
The meeting is open to the public with seating on a first-come, first-served basis. Members of the public may also watch a live webcast or listen to the meeting via conference call using a domestic toll-free telephone or international toll or toll-free number to connect to a live, listen-only audio feed. Persons requiring special accommodations to attend the meeting because of a disability should notify Abigail Knauff, the EEMAC Secretary, at (202) 418–5123. 

What:	Energy and Environmental Markets Advisory Committee
Location:	CFTC Headquarters Lobby-level Conference Room 1155 21st Street, NW, Washington, DC 20581
Date:	Wednesday, April 17, 2019
Time:	10:00 a.m. to 4:00 p.m.

Viewing/Listening Instructions: Watch the live webcast at www.cftc.gov.  To listen to the live audio feed, call the toll or toll-free numbers under Related Links. Call-in participants should be prepared to provide their first name, last name and affiliation.
Conference call information:

Domestic Toll Free:	1–877–951–7311
International Toll Numbers:	International Numbers
Conference Passcode:	5591147

Public comments can be submitted, identified by ‘‘Energy and Environmental Markets Advisory Committee,’’ by any of the following methods: CFTC website: http://comments.cftc.gov; mail to: Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW, Washington, DC 20581, Attention: Office of the Secretary; electronic mail to: secretary@cftc.gov; or hand delivered/courier service at the address above.
Members of the public can submit written statements by April 24, 2019. Statements submitted in connection with the committee meeting will be made available to the public, including publication on the CFTC website, www.cftc.gov. Use the title " Energy and Environmental Markets Advisory Committee” on the statement submitted. 
CFTC’s Advisory Committees were created to seek input and make recommendations to the Commission on a variety of regulatory and market issues that affect the integrity and competitiveness of U.S. markets. The committees facilitate communication among the Commission and U.S. markets, trading firms, market participants, advocates and commercial end-users.

Source: CFTC

Press Release | CFTC’s Global Markets Advisory Committee to Meet on April 15

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March 21, 2019
Washington, DC - The Commodity Futures Trading Commission’s (CFTC) Global Markets Advisory Committee (GMAC) announced today that it will hold a public meeting on Monday, April 15, 2019, at CFTC’s Washington, DC headquarters.
CFTC Commissioner Dawn D. Stump, who sponsors the GMAC, also announced the new members of GMAC. In addition, Commissioner Stump appointed Angie Karna, a managing director at Nomura Securities International, Inc., as the GMAC Chair for a one-year term. Andrée Goldsmith, special counsel in CFTC’s Division of Clearing and Risk, was also named the Designated Federal Officer for the GMAC.
At this meeting, the GMAC will hear presentations on how regulators are fulfilling the 2009 G20 directive regarding the OTC derivatives market. Specifically, the GMAC will examine the status of the four key pillars of the original G20 directive:

• trading on exchanges or electronic trading platforms
• clearing through central counterparties
• margin requirements for non-centrally cleared derivatives
• data reporting to trade repositories

The meeting is open to the public with seating on a first-come, first-served basis. Members of the public may also listen to the meeting via conference call using a domestic toll-free telephone or international toll or toll-free number to connect to a live, listen-only audio feed. Persons requiring special accommodations to attend the meeting because of a disability should notify Andrée Goldsmith at (202) 418-6624.

What:	Global Markets Advisory Committee
Location:	CFTC Headquarters Lobby-level Conference Room 1155 21st Street, NW, Washington, DC 20581
Date:	Monday, April 15, 2019
Time:	10:00 a.m. to 4:00 p.m.

Viewing/Listening Instructions: Watch the live webcast at www.cftc.gov.  To listen to the live audio feed, call the toll or toll-free numbers under Related Links. Call-in participants should be prepared to provide their first name, last name and affiliation.
Conference call information:

Domestic Toll Free:	1–877–951–7311
International Toll Numbers:	International Numbers
Conference Passcode:	2665194

Public comments can be submitted, identified by ‘‘Global Markets Advisory Committee,” by any of the following methods: CFTC website: http://comments.cftc.gov; mail to: Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW, Washington, DC 20581, Attention: Office of the Secretary; electronic mail to: secretary@cftc.gov; or hand delivered/courier service at the address above.
Members of the public can submit written statements by April 22, 2019. Statements submitted in connection with the committee meeting will be made available to the public, including publication on the CFTC website, www.cftc.gov. Use the title "Global Markets Advisory Committee" on the statement submitted.
CFTC’s Advisory Committees were created to seek input and make recommendations to the Commission on a variety of regulatory and market issues that affect the integrity and competitiveness of U.S. markets. The committees facilitate communication among the Commission and U.S. markets, trading firms, market participants, advocates and commercial end-users.

Source: CFTC

Press Release | BSDR LLC Voluntarily Withdraws from Swap Data Repository Registration with the CFTC

Washington, DC

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March 21, 2019
— The Commodity Futures Trading Commission (CFTC) announced today that BSDR LLC (BSDR) has voluntarily withdrawn from registration with the CFTC as a swap data repository (SDR), effective today.  BSDR initiated the withdrawal from SDR registration pursuant to CFTC Regulation 49.4(a), and the withdrawal became effective pursuant to CFTC Regulation 49.4(b).
The CFTC granted BSDR provisional registration as an SDR on January 17, 2014.  Upon BSDR’s withdrawal from such provisional registration today there are now three SDRs provisionally registered with the CFTC.

Source: CFTC

FX | Currencies | Dollar recovers from Fed blow; Brexit woes hound pound

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Antara Foto | Hafidz Mubarak via Reuters

The U.S. dollar rebounded on Thursday, recouping most of the ground lost in the previous session after the Federal Reserve jolted markets by abandoning all plans to raise rates this year, a signal its three-year campaign to normalize policy might be at an end.
The dollar index, which measures the greenback against six major currencies, was up 0.86 percent at 96.58.
The index fell 0.6 percent on Wednesday, closing below its 200-day moving average for the first time in more than 10 months.
On Wednesday, the Fed took a dovish stance, signaling it will not hike interest rates this year in the face of a slowing economy, while announcing a plan to end its balance sheet reduction program by September.
“It makes sense for the U.S. dollar to have fallen after the Fed meeting, but similar to what occurred with the euro after the March 7 meeting, the reaction may have been overdone,” said Juan Perez, senior currency trader at Tempus Inc in Washington.
The euro tumbled earlier this month after the European Central Bank postponed the timing of its first post-crisis rate hike to 2020 at the earliest and launched a new round of cheap loans to banks. The common currency has gained nearly 2 percent against the dollar since then.
“The reality is the economy of no country can really handle further increments to borrowing costs, and we may see more scrutiny over cuts than hikes from now on,” said Perez.
Despite the rebound on Thursday, Perez said he expects the dollar to remain pressured for the rest of 2019.
FX strategists at Morgan Stanley also see the Fed’s move as spelling trouble for the dollar.
“We see the FOMC decision as a meaningfully USD-negative signal and anticipate further declines,” they wrote in a client note.
Norway’s central bank raised its main interest rate on Thursday, as expected, and said its next hike may come earlier then previously planned, boosting the crown currency against the euro and the dollar.
The Swiss franc was up slightly against the greenback after Swiss National Bank Chairman Thomas Jordan said increasing global economic risks meant the central bank would stick to its ultra-loose monetary policy for the foreseeable future.
The pound extended losses amid fears of a catastrophic “no-deal” Brexit should lawmakers hold firm in their rejection of Prime Minister Theresa May’s divorce deal with the EU. Sterling was last down 1.17 percent at $1.3042.
The Bank of England kept interest rates steady on Thursday.

Source: CNBC

Bond Yields Report | 10-year Treasury yield falls to 14-month low, signaling possible trouble with economy

Thomas Franck

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The yield on the benchmark 10-year Treasury note fell to its lowest level since January 2018 on Thursday, a day after the Federal Reserve held interest rates steady and suggested it will keep rates the same for the rest of the year.
The Fed also downgraded its economic forecast for the U.S. economy and said it plans to end its program of reducing the bonds and mortgage-backed securities it holds on its balance sheet. Investors viewed the move — and subsequent comments from Chair Jerome Powell — as more restrained than expected.
The 10-year yield held lower at 2.519 percent after sinking 8 basis points in the prior session, while the yield on the 30-year Treasury bond was also lower at 2.957 percent. The yield on the 3-month Treasury bill, more sensitive to changes in Fed policy, was up at 2.478 percent, higher than the rate of return on both the 2-year Treasury note and the 5-year Treasury note.
“I think that it’s a mistake to characterize this as the Fed chickening out, or bowing to political pressure, or being spooked by the market. The story is that the Fed is rethinking their medium-term goal,” said Ethan Harris, head of global economics research at Bank of America Merrill Lynch. “The latest move confirms that [the market] wasn’t the No. 1 thing because it has recovered and the Fed is still dovish.”
The two-day move in Treasury yields signals both just how much inflation expectations have receded and how the Fed’s thinking on their 2 percent average inflation goal has changed in recent months.
“They’ve had an internal debate about their inflation target and its now moving into the public eye. They’re seriously thinking about revising the way they think about the target,” Harris added. “If you’re going to average inflation targets, you’re going to have to overshoot in good economic times.”

The more temperate Fed outlook sent Treasury yields, which fall as bond prices rise, plummeting to multiyear lows Wednesday afternoon. The motion exacerbated the flattening of the so-called Treasury yield curve, the plot of interest rates at a set point in time of bonds having equal credit quality but differing maturity dates.
Under normal conditions, the yield curve slopes upward: those that agree to take an IOU from the U.S. government for years are compensated with higher interest rates than those who agree to loan money for a just a few months. This can change, however, when market expectations for economic growth decline.
If investors believe that the U.S. economy will produce fewer goods and services in three years than it will in three months, for example, the curve can invert, or slope downward. That rise of short-term yields above longer-term yields is often viewed as a recession predictor, though technical analysts view inversion of certain sections of the curve as more critical than others.

The 2-year Treasury yield first rose above the 5-year Treasury yield on December 3 and remains at its flattest level since May 2007. However, many market participants have long heralded the spread between the 2-year yield and the 10-year yield as the more important difference. That curve remains upward sloping, though at a flat 11 basis points.
Still others, like White House economic advisor Larry Kudlow, look to a different segment of the curve. Last year, he told CNBC that both he and the New York Federal Reserve view the spread between the 3-month Treasury yield and the 10-year yield as most important.
“It’s actually not 10s to 2s; it’s 10s to 3-month Treasury bills,” Kudlow said in May. “Very important. And I actually went and got the model. The New York Fed is still publishing the model. The spread is flatter, but it’s 100 basis points or so. It’s not 20 or 30.”
The spread between the 3-month yield and the 10-year yield is now at 4 basis points; the spread between the 3-month yield and 5-year yield is already inverted.
The new comments on Wednesday came just months after central bankers suggested that two hikes to the overnight lending rate could be appropriate in 2019. The Fed’s committee hiked the overnight lending rate four times in 2018; it is currently in a range between 225 and 250 basis points.

Source: CNBC