2023-11-06 11:00

HARARE, Nov 6 (Reuters) - Zimbabwean miners, among the country's top export revenue earners, are likely to see profits drop almost 15% next year, with half expected to report a loss, according to a report released on Monday. The Southern African country is known for abundant deposits of platinum group metals (PGMs), gold and lithium. But a confluence of global and local factors will eat into the mining industry's revenue and profit in 2024, the Mining Prospects for 2024 report by the Zimbabwe Chamber of Mines said. "Executives are generally pessimistic," the report said, noting they had expressed concern over the investment outlook next year and called on the government to revise royalty payments and adjust foreign exchange retention rules. The industry is one of the highest foreign currency earners, alongside tobacco and horticulture. Last year Zimbabwe tripled the royalties platinum miners must pay the government to 7% and more than doubled those for lithium to 5%. Miners said these hikes alone would drive costs up by 5%, and when the impact of higher taxes and tariffs are added the cost of production would spike by almost 10%, the report said. Mining companies also want to retain up to 90% of their foreign currency earnings, up from 75% currently, according to the Chamber of Mines. The local issues are compounded by global mining infrastructure bottlenecks and subdued commodity prices, mostly for PGMs and base metals. Mineral revenues for the current year are likely to fall by approximately a fifth and by another tenth in 2024, the report said, with the Chamber of Mines only expecting gold miners to remain profitable. https://www.reuters.com/markets/commodities/zimbabwean-miners-set-big-profit-slump-next-year-report-2023-11-06/

2023-11-06 10:17

LONDON, Nov 6 (Reuters) - The pound rose on Monday, extending the previous week's rally, as a slide in U.S. bond yields continued to weigh on the dollar. Sterling was last up 0.23% at $1.2409, trading at its highest in more than a month after posting its best weekly performance in a year last week with a rise of 2.1%. The U.S. dollar index , which tracks the greenback against other major currencies, dropped 1.4% last week after the Federal Reserve held interest rates steady and economic data suggested the U.S. economy might finally be slowing. The index eased a further 0.13% on Monday. Sterling was slightly stronger against the euro, with the single currency down 0.1% at 86.62 pence. "It's mostly a dollar story," said Francesco Pesole, FX strategist at ING, adding that the real question is whether the U.S. currency can continue its downtrend. "We need to see consistent softening in U.S. data and I'm not sure this will happen... We think we might see a little bit of a rebound in the dollar in the next couple of weeks." Sterling pared gains, however, after survey data showed the UK construction sector suffered a second month of contraction in October as higher borrowing costs hit house-builders. A survey based gauge of the broader economy, including services and manufacturing, showed a slight improvement on September although also remained in contraction territory. Financial markets over the last few months have been dominated by a sharp rise in U.S. bond yields on the back of a American economy that continued to power ahead. Yet the Fed's meeting last week and the softer U.S. data raised investors' hopes that the next move in interest rates will be down, causing global bond yields to drop and stocks and non-dollar currencies to rally. The Bank of England also held interest rates, at a 15-year high of 5.25%, last week as it painted a gloomy picture of the UK economy. Gross domestic product data, due on Friday, is expected to show the UK economy shrank 0.1% in the third quarter after growing 0.2% in the three months to June. https://www.reuters.com/markets/currencies/sterling-rises-after-best-week-year-dollar-slide-continues-2023-11-06/

2023-11-06 10:13

WASHINGTON, Nov 6 (Reuters) - U.S. Treasury Secretary Janet Yellen will meet with Chinese Vice Premier He Lifeng in San Francisco this week to try to deepen a fledgling economic dialogue between the world's two largest economies ahead of a U.S.-hosted summit of Pacific Rim leaders. The Treasury said on Monday the Nov. 9-10 meetings will also convene the new economic and financial forums launched in October by the Treasury and China's finance ministry and central bank. Yellen first met with He, China's new economic czar, in July, when she visited Beijing to try to stabilize a deteriorating U.S.-China relationship amid growing U.S. restrictions on sensitive technologies. The San Francisco meetings will take place just before the Biden administration hosts ministers and leaders of Asia Pacific Economic Cooperation countries from Nov. 11-17 -- a gathering during which U.S. President Joe Biden is aiming to meet with Chinese President Xi Jinping. A senior U.S. Treasury official downplayed the idea that there would be specific "deliverables" from the Yellen-He meetings, saying it was not a "policy trade" situation "where we trade one thing for another." But the official said a key aim for Yellen was gaining a better understanding of how the new U.S.-China economic communication line will work, and how to make sure that "it is not vulnerable to shocks," adding that there will be more frequent interactions. Yellen also is keen to discuss what steps Chinese officials are contemplating to support their flagging economic growth, and what circumstances might change their policy path. 'NON-MARKET' TOOLS Amid growing concerns that China will try to dump more manufactured goods on U.S. and global markets, Yellen is expected to warn He against using massive industrial subsidies to state firms and shutting U.S. companies out of domestic markets, the official said. "This week, I will speak to my counterpart about our serious concerns with Beijing's unfair economic practices, including its large-scale use of non-market tools, its barriers to market access, and its coercive actions against U.S. firms in China," Yellen said in an opinion piece published by the Washington Post. She reiterated that the U.S. was seeking "healthy competition" with China and was not trying to "trigger a "disorderly wholesale private-sector pullback from China with actions to diversify supply chains and protect U.S. national security." A brief statement from a Chinese foreign ministry spokesperson said only that He would visit the U.S. from Nov. 8-12 at Yellen's invitation, describing him as China's "lead person for China-U.S. economic and trade affairs." It provided no details of any meetings. NOT S&ED The communications so far have helped U.S. officials to explain national security policies to counterparts in Beijing, including on export controls on sensitive technologies that could have military uses and restrictions on outbound U.S. investment to China. But Yellen said her engagement with He was not meant to reconstitute the broad, Obama-era U.S.-China Strategic and Economic Dialogue, which was widely criticized for its ineffectiveness. Instead, Yellen said she was "focusing on specific, high-priority economic topics on which we can make tangible progress." Among these are cooperating on global challenges such as tackling climate change, speeding debt relief to poor countries, and reducing illicit financial flows that support terrorism and the illegal drug trade. https://www.reuters.com/world/us/us-treasurys-yellen-meet-chinese-vice-premier-ahead-apec-summit-2023-11-06/

2023-11-06 10:02

LUSAKA, Nov 6 (Reuters) - Zambia's central bank said on Monday it would from next week raise the minimum amount of local and foreign currency deposits that commercial banks must keep with the state lender in a bid to curb the depreciation of the local kwacha currency. The minimum statutory reserve ratio on both local and foreign currency deposits, including government deposits and vostro account deposits, will be increased by 3 percentage points to 14.5% from 11.5% starting Nov. 13, the central bank said in a notice dated Nov. 3 and seen by Reuters on Monday. "The measure is aimed at relieving the persistent foreign exchange market pressure with a view to reigning in on inflation," it said. The market has remained starved of dollars while demand for the greenback has grown, putting pressure on the kwacha which has deprecated 23.27% so far in 2023, Access Bank said in a note on Monday. https://www.reuters.com/markets/currencies/zambia-central-bank-raise-reserve-ratio-requirements-halt-currency-slide-2023-11-06/

2023-11-06 09:17

MUMBAI, Nov 6 (Reuters) - The Reserve Bank of India's unpredictability on when it could restrict lenders from the non-deliverable forwards (NDF) market has led banks to reconsider their trading approach, hampering volumes in that segment, bankers said. The RBI first opened the NDF market to Indian banks in June 2020, and to resident Indians this June, to deepen participation. However, on two occasions in the past year when the rupee was under strain, it has informally restricted banks from building fresh arbitrage positions as that dilutes the impact of the central bank's intervention in the over-the-counter (OTC) market, bankers said. The effect is evident in banks' monthly NDF trading volumes, which declined by 33% month-on-month to $72.1 billion in September, CCIL data shows. That is similar to the drop in October 2022 after the previous restriction. The hesitancy among banks is only growing. "Unless there is stability in the RBI's approach, there will not be interest in building up (proprietary) NDF positions and the focus will be on (relatively small) customer flows," a treasury executive at a private sector bank said. Already banks are reducing the size of their books -- from about $25 billion last year to under $1 billion now, in the case of a large public sector bank. "We are unlikely to build back the book to the same or larger size given the risks," a dealer at the bank said, requesting anonymity as they are not authorised to speak to the media. The dealer is based out of GIFT City, an international financial services centre (IFSC) from where banks are allowed to build their positions in the NDF market. A large part of a bank's NDF book is related to arbitrage positions, which are attractive during market uncertainty as then, the USD/INR NDF trades at a premium to the OTC rate. The RBI's halts lead to volatility in NDF forward points, which has mark-to-market implications for existing arbitrage positions, the head of proprietary trading at a private sector bank explained. "To avoid this, we have taken a decision to not do NDF altogether for our own books." While RBI's informal restrictions are for new positions, he said, banks may just decide to unwind existing positions as well. https://www.reuters.com/world/india/india-cenbanks-flip-flop-ndf-market-makes-lenders-wary-bankers-2023-11-06/

2023-11-06 06:45

NEW DELHI, Nov 6 (Reuters) - Steel Authority of India (SAIL.NS) wants to increase coking coal purchases from Russia due to cheaper prices and is expecting four shipments, each with a capacity of 75,000 tonnes, in the quarter-ending December, chairman Amarendu Prakash said on Monday. https://www.reuters.com/markets/commodities/indias-sail-wants-increase-coking-coal-purchases-russia-2023-11-06/