Scarcity of U.S. Dollars in Haiti

[Slimprofits]

http://www.defend.ht/money/articles/...-bank-measures

http://defend.ht/politics/articles/e...state-of-banks

http://www.haitilibre.com/en/news-44...y-problem.html


I know it's a small, island nation with a history of political problems but is this a sign of a global liquidity problem?

[gwynedd1]

Re: Scarcity of U.S. Dollars in Haiti

http://www.defend.ht/money/articles/...-bank-measures

http://defend.ht/politics/articles/e...state-of-banks

http://www.haitilibre.com/en/news-44...y-problem.html


I know it's a small, island nation with a history of political problems but is this a sign of a global liquidity problem?

It is. It might be a good idea to look around for this.

[Slimprofits]

Re: Scarcity of U.S. Dollars in Haiti

Reports from Haiti, Ghana, Bangladesh, the ECB and Nigeria and the TED Spread now at 56.8 with the 3 MO LIBOR - OIS Spread at .475


Haiti - Economy : Scarcity of the dollar, 4 measures announced
14/12/2011 07:07:42

measures, that is aimed at boosting the Gourde, the Haitian currency.

Haiti: Scarcity of U.S. Currency is 'Not Political' says Central Bank
Monday, 12 December 2011 10:49

Speaking at a press conference, Bank Governor Charles Castel, said that "foreign banks were alerted by the level of demand for the U.S. currency and have taken steps to restrict the flow of the currency to Haiti."
Castel told the press that the scarcity of U.S. currency is "not political, and is not artificial. This is something normal because we do not make dollars."

The first report came on December 1st, when it was learned that banking institutions around Port-au-Prince were limiting customer withdrawals to only $500 in U.S. currency.

"Haiti imports the dollar as any other [country]," he says, "and restrictions on the international level are that the banks have no cash 'cash'," which is why Castel believes there is a limitation on withdrawals.

Ghana cedi gets boost from greenback inflows
Wed Dec 14, 2011 3:46pm GMT

Christopher Nettey of Stanbic quoted the interbank cedi-dollar exchange rate at 1.6365/90 at 1230 GMT, slightly up from an open of 1.6395/20.

"We have some dollar inflows coming in from one of the banks, but it is unclear which bank," Nettey said. "We are not sure how long these gains will sustain today, but we are expecting the cedi will hold at around the 1.6350 level."

In recent months the cedi has come under increased pressure due to a high global demand for dollars, traders have said.

Dollar crunch intensifying
Tuesday December 13 2011

The dollar crisis is intensifying both in the inter-bank and open market transactions. The value of the US dollar is increasing in both the markets because of its scarcity. The crisis has become more acute because of the declining rate of export growth as compared to increase in the rate of growth of imports. Furthermore, the growth of remittance inflow is also showing a declining trend and disbursement of foreign aid is also falling sharply.

The banks are unable to open letters of credit (LCs) for the businessmen. Because of heavy import of fuel oil by Bangladesh Petroleum Corporation (BPC) for the quick-rental and rental power stations, the public sector commercial banks are finding it difficult to foot the import bills. The central bank has been releasing dollars to meet their import payment obligations. This is creating pressure on the country's foreign exchange reserves.

The US dollar price has gone above Tk 80 per dollar. Experts are predicting that the value of the dollar may go up to Tk 100, from the existing rate. According to the economists, the government does not have any mechanism to deal with the situation instantly. The government will have to reduce expenditure and cut down imports. Concrete action will have to be taken to increase exports and remittances. Flow of foreign aid needs to be expedited. Without these measures, the foreign exchange (forex) reserves will be depleted and the external value of the taka will continue to decline. Import costs will also rise, impacting on inflation and growth. Treasury officials at different banks are worried about the unabated rise in the dollar price.

ECB Could Alter Rules Again To Ease Dollar Funding Stress

DECEMBER 15, 2011, 3:37 P.M. ET

On Nov. 30, the ECB and five other central banks cut their dollar borrowing rate by 50 basis points and on Dec. 8, the ECB said it would accept lower-quality collateral for its loans.

Dollar scarcity has caused non-U.S. bank assets to shrink 18%, or almost $400 billion, since the end of June, according to Joseph Abate, money markets strategist at Barclays Capital in New York.

Devaluation: Naira May Overshoot Cbn Trading Band