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Central African bank regulator reminds states of crypto ban

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© Reuters. FILE PHOTO: Representations of virtual cryptocurrencies are seen in this illustration taken November 28, 2021. REUTERS/Dado Ruvic/Illustration

N’DJAMENA (Reuters) -Central Africa’s regional banking regulator sent out a reminder on Friday about its ban on cryptocurrencies, weeks after the Central African Republic, a member state, made bitcoin legal tender.

The Banking Commission of Central Africa (COBAC), which regulates the banking sector in the six-nation Economic and Monetary Community of Central Africa (CEMAC), said the prohibition was meant to ensure financial stability.

The announcement came as cryptocurrencies nursed large losses on Friday after the collapse of TerraUSD, a so-called stablecoin, rippled through markets.

The Central African Republic’s presidency announced on April 27 that bitcoin had been made legal tender, making it only the second country to do so after El Salvador.

At the time, analysts and crypto experts said they were puzzled by the move in one of world’s poorest nations where internet use is low, conflict is widespread and electricity is unreliable.

The government has provided few details about its reasoning and questions remain about implementation.

Reached by phone on Friday, government spokesman Serge Ghislain Djorie told Reuters that Central African Republic had received no official notice from the COBAC about a crypto ban, although he had seen the news in the press and on social media.

“We are waiting for the document to be officially transmitted before we can respond. It must be understood that each state has sovereignty,” Djorie said.

The banking commission held a special meeting on May 6 to examine the impact of cryptocurrencies in the zone, it said in the statement on Friday.

“In order to guarantee financial stability and preserve client deposits, COBAC recalled certain prohibitions related to the use of crypto-assets in CEMAC,” it said.

These include the holding of cryptocurrencies of any kind, the exchange, conversion or settlement of transactions relating to cryptocurrencies and a bar on them being used as a means of evaluating assets or liabilities, it said.

“COBAC has decided to take a number of measures aimed at setting up a system for identifying and reporting operations related to cryptocurrencies,” it added.

Forex

BOJ’s Kuroda vows to keep easy policy, remain dovish G7 outlier

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© Reuters. FILE PHOTO: Bank of Japan (BOJ) Governor Haruhiko Kuroda attends a news conference at the BOJ headquarters in Tokyo, Japan July 30, 2019. REUTERS/Kim Kyung-Hoon/File Photo

By Leika Kihara

BONN, Germany (Reuters) -The Bank of Japan will keep interest rates ultra-low as inflation won’t pick up much, governor Haruhiko Kuroda said on Friday, underscoring the view that Japan will remain an outlier among G7 nations eyeing monetary policy tightening.

Kuroda said he explained to his G7 counterparts that the BOJ will patiently stick to its powerful monetary easing to ensure the economy makes a sustained recovery from the pandemic.

“The chance of inflation accelerating more than we projected last month is slim,” Kuroda told a news conference after attending the G7 finance leaders’ gathering in Germany.

While it was natural for other G7 central banks to tighten monetary policy given surging inflation, there was “absolutely no change” to the BOJ’s stance of maintaining an ultra-loose monetary policy, Kuroda said.

His remark came despite a G7 finance leaders’ communique warning that central banks must calibrate the pace of monetary tightening with inflation reaching “levels not seen for decades.”

Japan’s core consumer inflation in April exceeded the central bank’s 2% target for the first time in seven years due largely to the boost from rising fuel and food import costs.

Kuroda has repeatedly said such cost-push inflation would be temporary and won’t lead to the kind of sustained achievement his price goal that justifies withdrawing stimulus.

In fresh quarterly forecasts produced last month, the BOJ projects core consumer inflation to hit 1.9% in the current fiscal year before moderating to 1.1% in fiscal 2023 and 2024.

Kuroda told Friday’s briefing that he saw no need to follow in the footsteps of the European Central Bank, which is on the path toward ending negative interest rates.

“The recent rise in commodity prices would worsen Japan’s terms of trade, so the current pick-up in inflation likely won’t be sustained,” Kuroda said.

Under a policy dubbed yield curve control, the BOJ sets its short-term interest rate target at -0.1% and that for 10-year bond yields around 0%.

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Forex

BOJ’s Kuroda vows to keep ultra-easy monetary policy

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on


© Reuters. FILE PHOTO: Bank of Japan (BOJ) Governor Haruhiko Kuroda attends a news conference at the BOJ headquarters in Tokyo, Japan July 30, 2019. REUTERS/Kim Kyung-Hoon/File Photo

By Leika Kihara

BONN, Germany (Reuters) -The Bank of Japan will keep interest rates ultra-low as inflation won’t pick up much, governor Haruhiko Kuroda said on Friday, underscoring the view that Japan will remain an outlier among G7 nations eyeing monetary policy tightening.

Kuroda said he explained to his G7 counterparts that the BOJ will patiently stick to its powerful monetary easing to ensure the economy makes a sustained recovery from the pandemic.

“The chance of inflation accelerating more than we projected last month is slim,” Kuroda told a news conference after attending the G7 finance leaders’ gathering in Germany.

While it was natural for other G7 central banks to tighten monetary policy given surging inflation, there was “absolutely no change” to the BOJ’s stance of maintaining an ultra-loose monetary policy, Kuroda said.

Kuroda’s remark came despite a G7 finance leaders’ communique warning that central banks must calibrate the pace of monetary tightening with inflation reaching “levels not seen for decades.”

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Forex

Dollar Up, but Set for Worst Week Since Feb 2022 as Headwinds Remain

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© Reuters

By Gina Lee

Investing.com – The dollar was up on Friday morning in Asia, headed for its worst week since early February 2022 as U.S. Treasury yields retreat and fatigue after the greenback’s 10%, 14-week surge.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies was up 0.35% to 102.94 by 11:45 PM ET (3:45 AM GMT). The index was down 1.5% for the week and is set to end a six-week winning run, after climbing to the highest level since January 2003 at 105.01 a week earlier.

The USD/JPY pair inched up 0.03% to 127.84.

The AUD/USD pair was down 0.45% to 0.7015 and the NZD/USD pair inched down 0.11% to 0.6371.

The USD/CNY pair was up 0.22% to 0.67282 while the GBP/USD pair inched down 0.10% to 1.2447

However, global shares continue their fall as aggressive monetary tightening, led by the U.S. Federal Reserve, and China’s COVID-19 continue to pose challenges to economic growth. The dollar’s safe-haven appeal was also eclipsed by a fall in U.S. yields as investors turned to Treasury bonds.

The benchmark 10-year Treasury yield fell overnight to a more than three-week low of 2.772%, from a three-and-a-half-year high of over 3.2% earlier in the month.

“The dollar was ripe for a pullback,” OANDA senior analyst Edward Moya said in a note. “Across the board weakness might continue a while longer.”

The Japanese yen was set for a second consecutive weekly advance, with the dollar falling 1.16% to 127.785 yen since the previous Friday.

Concerns are now growing that the Fed and other central banks have fallen behind in curbing inflation and will need to be ever more aggressive in tightening policy. The ongoing war in Ukraine, precipitated by the Russian invasion on Feb. 24, is also darkening the outlook for commodity price-driven inflation.

In Asia Pacific, China’s path out of its COVID-19 lockdowns remains unclear, even as the city of Shanghai prepares to allow more businesses in zero-COVID areas to resume normal operations from the beginning of June 2022.

Signs of a re-opening in China lent some support to the Antipodean currencies. The Australian dollar fell on Friday, with its U.S. counterpart bouncing a bit after the Aussie’s 1.33% surge on Thursday.

“China’s strict lockdowns are the main reason why the Australian dollar has diverged so much from the level implied by its fundamentals,” Commonwealth Bank Of Australia analyst Carol Kong said in a note.

“We remain confident the Aussie can rebound strongly once lockdowns are eased because of China’s commitment to ramp up infrastructure spending.”

The Reserve Bank of New Zealand will also hand down its policy decision the following Wednesday.

Westpac analysts warned not to count the dollar out, even if its rally was “losing some of its vitality”.

“It’s still far too early to call a long-term peak, amid unsettled global market conditions and a resolute Fed,” they said in a research note, recommending buying on dips in the 102s and targeting 105 multi-week.

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