作者： bankr

The world’s progress in eliminating poverty is set to suffer a major setback due to the Covid-19 outbreak, forcing more people to survive on less than $1.90 per day, the World Bank has said in its recent report.

“The pandemic and shutdown of advanced economies could push as many as 60 million people into extreme poverty – erasing much of the recent progress made in poverty alleviation,” World Bank Group President David Malpass said. According to him, the unprecedented crisis could wipe out up to three years of progress in the area.

The pandemic has been ripping through the global economy, which is set to fall into a deep recession and contract by up to five percent this year, the Washington-based institution said.

Last month, the bank said that the virus-triggered economic turmoil is likely to cause the first increase in global poverty since 1998, when the Asian Financial Crisis hit. Even under the bank’s best estimate, some 49 million people will fall into extreme poverty, which it defines as living on less than $1.90 per person per day.

To help combat the deadly virus, the World Bank has offered financing emergency programs in 100 countries. In the “largest” crisis response in the Bank Group’s history, the program unlocked $160 billion in grants and financial support over a 15-month period, as well as the suspension of bilateral debt service payments. The bulk of the financial help will go to Sub-Saharan Africa, as it is expected be the region hit hardest in terms of increased extreme poverty.

Most international financial institutions have already sounded alarms over the devastating impact of the coronavirus pandemic, with some forecasts indicating that the global gross domestic product (GDP) could fall nearly 10 percent. The UN had earlier warned that the virus could also trigger a global food shortage, while its labor agency forecasts that 195 million jobs could be lost worldwide.

投行摩根大通发表报告称，预期全球主要央行的量化宽松（QE）应仅足够抵销今年债券供应的大幅增加，但意味着央行可能需要扩大QE规模，以防债券收益率上升。

报告指出，相对于该行去年底的预期，今年市场对债券需求变化最大的是来自央行的需求，尽管该行预期美联储的买债速度将由目前水平逐渐减少，并稳定在约每天50亿美元，但这速度仍较此前的QE要快得多。此外，欧洲央行此前宣布在2020年底前买债1.1万亿欧元、英国央行宣布购买2,000亿英镑国债（该行经济师及策略师预期英国央行将于6月宣布额外买债1,000亿英镑），至于日本央行亦增加购买公司债。因此，这四家央行今年的债券需求增加4.2万亿美元，较2019年4万亿美元的需求增加为多。

然而，养老基金及保险公司、零售投资者今年对债券的需求则减少。

在债券供应方面，报告称，全球经济受冲击及市场反应将对今年债券供应有巨大影响。因财税收入减少，多国政府财政赤字急增，这将导致发达国家政府债券供应大增，而企业亦增加发债，以确保公司有足够现金抵御经济低迷时期。

综合而言，摩根大通估计今年市场对债券需求将增加1.9万亿美元，债券供应增加2.1万亿美元，2020年的债券供求余额将出现净恶化。在央行买债速度减缓，而债券供应上升的情况下，将意味着今年余下时间债券收益率将有上升压力。该行的分析表明，尽管央行的QE政策足以抵销今年债券供应的增长，但要防止收益率上升的话，则央行可能需要进一步扩大QE规模。

Bank Indonesia (BI) has decided to leave its benchmark interest rate unchanged in a move aimed at safeguarding the stability of the financial market while also ensuring there is sufficient liquidity for the country’s banking industry amid the economic impacts of the COVID-19 pandemic.

The central bank maintained Tuesday its policy rate – the seven-day reverse repo rate – at 4.5 percent. Lending and deposit rates were also kept at 5.25 and 3.75 percent, respectively.

“This decision was made by taking into account the need to maintain the stability of the rupiah exchange rate amid global market uncertainties although Bank Indonesia does see room to cut the interest rate amid low inflation and the need to boost economic growth,” BI Governor Perry Warjiyo told a livestreamed press briefing.

The government has projected this year’s economic growth to drop to 2.3 percent under a baseline scenario, from earlier an projection of 5.3 percent, and even forecasts that the economy could contract 0.4 percent as the pandemic forces people to stay at home, disrupting business activity and hitting household spending.

The central bank has trimmed the benchmark rate twice this year by a total of 50 basis points (bps) in response to the pandemic. In total, it has slashed 150 bps off the rate since it began the current easing cycle in 2019.

Bank Danamon economist Wisnu Wardana said the monetary policy stance would remain accommodative as Indonesia’s inflation-adjusted interest rate was still attractive among its peers.

“Nevertheless, the current real interest rate is in-line with our emerging market peers, cautioning any move to change its policy rate further despite room for two 25 bps cuts,” he added.

University of Indonesia Institute for Economic and Social Research (LPEM UI) economist Teuku Riefky said despite there being “adequate room” for policy rate cuts, the central bank should maintain yield differentials to anticipate the possibility of capital flight.

“A lower policy rate may induce investors to move their assets back into safe-haven countries, triggering fluctuation in the rupiah,” he wrote in a research note. “This emphasizes the need to maintain the rupiah’s stability in the short-term amid the heightened uncertainty of the pandemic.”

BI recorded a net outflow of US$5.7 billion in the first quarter as foreign investors dumped Indonesian assets. During April to May 14, however, the central bank booked $4.1 billion in net inflows.

As a result, the rupiah strengthened by 5.1 percent on average against the US dollar as of May 18 compared to at the end of April, BI data showed. However, the currency still depreciated by around 6.52 percent against the greenback compared to last year.

“The central bank views the rupiah as remaining fundamentally undervalued and thus having the potential to strengthen and support economic recovery,” Perry said.

The central bank also vowed to support the country’s economic recovery through several measures. It pledged to provide liquidity for banks that provide loan restructuring for micro, small and medium businesses in support of the government’s stimulus for such enterprises that were hit hard by the pandemic.

Around Rp 563 trillion ($38.09 billion) worth of government bonds currently held by banks could be used as underlying assets in repurchase agreements with the central bank to access more liquidity, Perry said.

Financial Services Authority (OJK) data showed earlier this month that 88 banks had provided 3.99 million debtors with loan restructuring worth Rp 336.97 trillion. It projected around 7.8 million debtors with credit worth Rp 1.1 quadrillion might apply for the facility in 110 banks.

BI also aimed to strengthen its monetary operations and sharia financial market deepening as well as boost the digital economy through collaboration between banks and financial technology (fintech) companies.

“Going forward, Bank Indonesia will continue to monitor global economic and financial market dynamics as well as COVID-19 transmission and the economic impact on Indonesia over time, while implementing the coordinated follow-up policies required with the government and Financial System Stability Committee (KSSK) to maintain macroeconomic and financial system stability and support the national economic recovery,” Perry said.

Moscow has continued to sell off US Treasury securities, cutting its stockpile by US$8.73 billion in March, according to the latest data from the US Department of the Treasury.

Russia’s holdings of US state debt amounted to $3.8 billion in March, compared with $12.5 billion a month earlier. Three years ago, the amount stood at $105 billion. Moscow has liquidated over 96 percent of its holdings in that period. The country’s long-term US Treasury securities decreased by $928 million, while short-term securities plunged by $7.8 billion to just $473 million.

Japan remains the biggest holder of US state debt since June 2019. Tokyo held US Treasury bills worth $1.27 trillion in March, having increased its investment by $3.4 billion from a month earlier. 

The second top foreign holder of US Treasury notes, China, has continued to make modest cuts to US debt holdings, slashing its portfolio by $10.7 billion to $1 trillion.

Russia used to be one of the major holders of US Treasuries, but since May 2017, it has been steadily cutting this investment, in line with its de-dollarization policy and in response to sanctions imposed by Washington. 

As a matter of state policy, Moscow has also been diversifying its reserves, increasing bullion purchases to record levels, and earning the title of the world’s most committed purchaser of gold. The country’s total gold holdings amounted to 73.9 million troy ounces (2,298 tons) as of March, and are worth around $120 billion, according to the latest data from the Central Bank of Russia.

JB Financial Group said Monday it will launch a team that will play a central role in the group’s digital transformation.

According to the North Jeolla-based provincial financial group, the team will be comprised of 15 lower-level employees from each of the group’s affiliates, and will be tasked with strengthening JB’s digital capabilities and promoting a digital culture.

The team will study digital technologies including artificial intelligence and blockchain, and incorporate these in developing digital products and services.

The team will also plan digital events and take part in competitions, the group said.

JB said members will be recognized for outstanding ideas with rewards from the CEO.

“We plan on achieving two goals through the launch of the digital team ― spreading a company-wide digital culture and fostering the talents of digital experts,” said Park Jong-choon, heading JB Financial’s digital transformation division.

The United States is facing a severe economic downturn amid the global pandemic, but will not suffer another Great Depression and will see a recovery begin later this year, Federal Reserve Chair Jerome Powell said Sunday.

The world’s top economy was strong before the COVID-19 outbreak hit, like a natural disaster, causing nationwide business shutdowns, Powell said. And the banking system had been rebuilt stronger since the global financial crisis.

Data show more than 30 million jobs were destroyed in the US, as businesses were shuttered nationwide amid the efforts to stop the spread of the virus.

For the April-June period, the economic data “will be very, very bad. There’ll be a big decline in economic activity, big increase in unemployment,” Powell told the CBS program “60 Minutes.”

But “there’re some very fundamental differences” between the current crisis and the Great Depression of the last century, he said.

The US economy could “easily” collapse by 20 to 30 percent this quarter, and unemployment could peak at 20 to 25 percent, but, “it should be a much shorter downturn than you would associate with the 1930s.”

The other key difference is, rather than raising interest rates, the Fed slashed lending rates to zero and is prepared to come up with new ways to support growth, Powell said.

Growth resumes Q3

“I think there’s a good chance that there’ll be positive growth in the third quarter,” he said.

But he warned it may take time to return to normal and the US may not see a full recovery without a vaccine to treat COVID-19.

“I think you’ll see the economy recover steadily through the second half of this year,” Powell said.

But “it’s going to take a while for us to get back,” he said. “It could stretch through the end of next year. We really don’t know.”

Asked about the need for a vaccine to treat the illness and put a stop to the coronavirus pandemic, Powell stressed the importance of consumers to the economy.

“For the economy to fully recover, people will have to be fully confident, and that may have to await the arrival of a vaccine,” he said.

The Fed rushed in even before the economic lockdowns were fully in place, slashing the benchmark lending rate and pumping trillions of dollars into the financial system and into lending programs to support corporations, small- and medium-sized businesses and state and local governments.

The central bank chief said the Fed is prepared to do more to support the recovery.

But he repeated his message that the economy likely will need more government spending to support workers and businesses to allow the economy to recover, beyond the nearly US$3 trillion already approved by Congress.

“If we let people be out of work for long periods of time, if we let businesses fail unnecessarily, waves of them, there’ll be longer-term damage to the economy. The recovery will be slower,” he said. 

“The good news is we can avoid that by providing more support now.”

The crisis “has come on so quickly, and with such force, that you really can’t put into words the pain people are feeling and the uncertainty they’re realizing,” he told CBS.

Banks in Asia’s financial hubs, such as HSBC Holdings and Citigroup, are finding that the disruption from the coronavirus outbreak is helping them push back on a threat from a new breed of virtual upstarts.
With branches shut, customers social distancing and fearful of tainted cash, the banking giants are seeing a surge in demand for digital services for everything from wealth management to insurance. Now they are rolling out new video services and fresh mobile features for retail and affluent clients, speeding up a transformation to cement customer loyalty and reduce costs, according to consultants and bankers.
“Most banks are using this as an opportunity to sharpen their strategy,” said Fergus Gordon, growth markets banking industry lead at Accenture. “There will be a longer-term impact on their balance sheets.”s
The heightened digital activity comes just as bricks-and-mortar banks were contemplating how to fend off an onslaught of fresh competition from virtual banks that are being allowed into Hong Kong and Singapore.
For HSBC, which gets about a third of its revenue in Hong Kong, the stakes are high. The city is opening the door to eight new digital-only lenders with powerful backers such as Alibaba Group Holding, the parent company of the South China Morning Post.
The start-ups could capture as much as US$15 billion, or 30 per cent, of the city’s banking revenue, Goldman Sachs estimated in 2018.
At HSBC, the share of retail transactions in Hong Kong conducted digitally hit 94 per cent in March. Active customers on its mobile app jumped almost 40 per cent from a year earlier, to 1.12 million.
Citigroup’s digital wealth management transactions, including stock and foreign exchange, rose 37 per cent in the first two months of the year in Hong Kong. Overall in Asia, its digital brokerage and mutual fund transactions jumped more than 70 per cent in March from January.
“We do anticipate that Covid will lead to an acceleration in customer adoption of digital channels, which will continue,” said Greg Hingston, HSBC head of wealth and personal banking for Asia-Pacific.
During the crisis, Citigroup has added features to its mobile app such as a “Help” function and is working on enabling two-way messaging.
“Our view is customers will continue to embrace digital once the pandemic is behind us after having experienced first-hand the added convenience and possibilities it offers,” said Gonzalo Luchetti, head of Asia-Pacific and EMEA consumer banking.
Bank of China (Hong Kong), which has the biggest branch network in the city, has accelerated the roll-out of digital services, speeding up its plans by months, according to Arnold Chow, an executive in charge of the personal digital banking products unit for investment and insurance.