Sterling has crashed as low as $1.0350 as Asian markets opened to trade while some analysts warn it could sink to parity with the greenback.
The pound plunged to a record low against the dollar as traders grow increasingly fearful of a deep UK recession after new finance minister, Kwasi Kwarteng, unveiled a controversial tax-cutting mini-budget.
Sterling dropped to as low as $1.0350 in early Asian trade on Monday, according to Bloomberg data, with some commentators warning it could sink to parity with the greenback.
Investors began dumping the pound on Friday after Kwarteng, who was put in place by Liz Truss after she became prime minister earlier this month, set out plans to slash taxes in a bid to kickstart the ailing British economy.
And the selling continued on Monday after he said he intended to unveil further reductions, despite his budget causing ructions on London’s markets, with the FTSE 100 losing around two percent.
“You’ve got to buy the dollar as a risk off-trade. There is nowhere else to go,” said Rabobank strategist Michael Every in Singapore.
“The BOE are going to have to step in today, surely, at which point everyone’s going to end up with massively higher mortgage rates to try and stabilise sterling.”
Oil and gold steady after drop
The collapse sent the dollar higher broadly and it hit multi-year peaks on the Aussie, kiwi and yuan and a new 20-year top of $0.9528 per euro.
In stocks, MSCI’s broadest index of Asia-Pacific shares outside Japan was down 1 percent to a two-year low. It is heading for a monthly loss of 11 percent, the largest since March 2020. Japan’s Nikkei fell 2.2 percent.
Last week, stocks and bonds crumbled after the United States and half a dozen other countries raised rates and projected pain ahead.
Oil and gold steadied after drops against the rising dollar last week.
The dollar index climbed to a fresh 20-year high on Monday, capping oil price gains.
Gold hit a more-than two-year low on Friday and bought $1,643 an ounce on Monday.
Brent crude futures were up 17 cents, sitting at $86.29.
IASL is seeks A contractor to refurbish the Maafaru airport terminal
BY: FATHIMATH LAUZA.
Island Aviation Services Limited (IASL) is looking for a contractor to refurbish the Maafaru International Airport terminal. IASL has asked interested Maldivian enterprises to submit proposals by February 12.
According to General Manager Mumthaz Ali, the goal of the terminal upgrade is to expand the airport’s capacity, add additional Maldives Immigration counters, and develop commercial and VVIP lounges.
He stated that the terminal will be a two-story structure, with the first level housing the VVIP lounge and the second housing the commercial lounge and offices.
Furthermore, the Maldives Transport and Contracting Company (MTCC) is planning to rebuild and enlarge the runway at Maafaru International Airport. The Abu Dhabi Fund for Development has provided a USD27 million grant to the project (ADFD). The expansion of the runway and terminal is projected to greatly boost the airport’s capacity.
The renovation and extension are part of Maafaru International Airport’s second phase of development. MTCC is in charge of extending the runway by 650 meters, enlarging the strip, recovering land, and constructing coastline protection buildings. Other activities include improving the runway pavement, enlarging the taxiway, and modernizing the AGL and power systems.
State reserve at USD 827.7M by end of last year, a significant improvement
Statistics publicized Maldives Monetary Authority (MMA) show that the state reserve stood at USD 827.7 million at the end of last year.
The ‘Economic Update’ publicized by MMA on Thursday showed that the gross international reserve, or in other words, the foreign currency reserve of the central bank, increased to USD 827.7 million by the end of last December.
This marks a three percent increase compared to the previous year. At the end of 2021, the state reserve stood at USD 805.8 million.
The reserve significantly improved in December 2022 compared to November 2022 with an addition of USD 223.5 million – marking a 37 percent increase. At the end of November 2022, the reserve stood at USD 604.2 million.
Tourism sector performed significantly well in the last quarter of last year. Statistics by Tourism Ministry showed that Maldives recorded 184,051 tourist arrivals in December alone, marking a 12 percent increase compared to December 2021.
As per MMA, the number of fisheries exports from the Maldives also significantly increased during December 2022. The central bank said that number of total exports had also significantly increased last year.
Economic experts cite the increased tourist arrivals to the Maldives and increased exports from the Maldives as a positive impact on the Maldivian economy.
While statistics from MMA shows Maldivian economy making steady improvements – Finance Ministry had recently announced measures to cut down state expenditure which is currently in force.
OPEC+ committee recommends staying course on oil output policy
VIENNA, Feb. 1 (Xinhua) — Leading oil officials on Wednesday recommended to maintain the current oil output policy of OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, amid an uncertain global economic outlook.
The OPEC+ agreed in October 2022 to cut production by 2 million barrels per day from the following month until the end of 2023. The cut equals to about 2 percent of the annual global oil demand.
Members of the OPEC+ Joint Ministerial Monitoring Committee (JMMC) “reaffirmed their commitment” to the current output plan at a virtual meeting on Wednesday and “urged all participating countries to achieve full conformity and adhere to the compensation mechanism,” according to an OPEC statement.
The JMMC comprises oil ministers from the OPEC+ countries. It has no decision-making power but provides policy recommendations for the OPEC+ ministerial meeting, the group’s decision-making body. It has also the authority to request additional OPEC+ ministerial meetings “at any time to address market developments,” according to OPEC.
The JMMC has reviewed the oil production data for November and December last year and “noted the overall conformity” for the OPEC+ countries, OPEC added.
The next JMMC meeting is scheduled for April 3. The next OPEC+ ministerial meeting, where the group will formally decide its output policy, is set for June 4.
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