Economy
Israel central bank says digital shekel launch an ‘open question’
© Reuters. FILE PHOTO: An Israeli flag flutters outside the Bank of Israel building in Jerusalem August 7, 2013. REUTERS/Ronen Zvulun
By Steven Scheer
JERUSALEM (Reuters) -Israel’s central bank is pushing forward with plans to issue a digital shekel, citing the need to improve the country’s payment systems, but on Tuesday remained noncommittal on whether one would be launched.
The Bank of Israel in November 2021 stepped up its research and preparation for the possible issuance of a digital shekel to create a more efficient payments system after first considering issuing a central bank digital currency (CBDC) in late 2017.
“Whether or not we will issue a digital shekel is still an open question, as it is in most if not all other advanced economies,” Bank of Israel Governor Amir Yaron said at a conference on digital currencies.
“Either way, we remain committed to be at the frontier, and more than that, to support the effort of pushing the frontier, in our CBDC explorations, as well as in our efforts to modernize and advance our payment systems … and the financial system in general,” Yaron said.
Israel’s central bank has been experimenting with a digital shekel with its Hong Kong counterpart and the Bank for International Settlements. It said the so-called Sela project has proven the feasibility of a retail CBDC and “combines accessibility, competition and preventative cyber security, while retaining key advantages of physical cash.”
Yaron said that given a rapid digitalisation of the economy, working on a CBDC makes sense and noted that Israel has closed the gap with other countries, while stressing that if Israel opts for one, “it will provide at least as much privacy as digital means of payments” and maybe even a higher level.
Deputy Governor Andrew Abir said that for Israel, issuing a digital shekel would provide more competition in a financial system dominated by a few large banks and institutions.
“The CBDC can offer a level playing field on which new entrants can offer financial products,” he said.
Abir said a steep rise in interest rates in the past year demonstrated this need since commercial banks did not fully pass rate increases to the balances of their customers, while on their loans the transmission was full and immediate.
“And there has been an understandable backlash by the public,” Abir said, adding that a digital currency could benefit consumers.
“I believe central banks should return to examine the possibility (of) remunerated CBDCs – that is, for the central bank to pay interest CBDC directly to the end users who hold it, and enjoy the security provided by the central bank. This is a complicated topic with many implications, and we will need to consider them as the project progresses,” Abir said.
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
© Reuters. FILE PHOTO: Workers walk past an under-construction area with completed office towers in the background, in Shenzhen’s Qianhai new district, Guangdong province, China August 25, 2023. REUTERS/David Kirton/File Photo
SHANGHAI (Reuters) – China’s top planning body said on Saturday it had identified a second batch of public investment projects, including flood control and disaster relief programmes, under a bond issuance and investment plan announced in October to boost the economy.
With the latest tranche, China has now earmarked more than 800 billion yuan of its 1 trillion yuan ($140 billion) in additional government bond issuance in the fourth quarter, as it focuses on fiscal steps to shore up the flagging economy.
The National Development and Reform Commission (NDRC) said in a statement on Saturday it had identified 9,600 projects with planned investment of more than 560 billion yuan.
China’s economy, the world’s second largest, is struggling to regain its footing post-COVID-19 as policymakers grapple with tepid consumer demand, weak exports, falling foreign investment and a deepening real estate crisis.
The 1 trillion yuan in additional bond issuance will widen China’s 2023 budget deficit ratio to around 3.8 percent from 3 percent, the state-run Xinhua news agency has said.
“Construction of the projects will improve China’s flood control system, emergency response mechanism and disaster relief capabilities, and better protect people’s lives and property, so it is very significant,” the NDRC said.
The agency said it will coordinate with other government bodies to make sure that funds are allocated speedily for investment and that high standards of quality are maintained in project construction.
($1 = 7.1315 renminbi)
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
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