Reform Forex Gradually

In lieu of the fragile financial systems inherent in emerging economies, Asian Development Bank (ADB) cautions China and Japan to take precautionary steps so as not to deter the progress of the upcoming regional economic integration.

ADB President Haruhiko Kuroda emphasizes the immediate need for exchange rate adjustments but notes that it should be done in gradual steps supported by the government. This support, Kuroda stressed, should be in the form of control on the flow of funds maintained to cushion the shock of making exchange rates more flexible.

Kuroda adds that relaxing capital control should come after the revaluation of the Renminbi and not before it or at the same time. Liberalizing the outflow of funds first is risky since inflows and outflows are delicately linked. Doing so makes it possible to avoid a currency or capital account crisis, which could not be afforded at this time since China’s health is too important to falter for sustainable growth of the regional and global economies.

Highlights of ADB Chief Calls For Gradual Forex Reform, The Peninsula Website

Two Checks Track Illegal Currency Deals

The Hyveld Seed Company in Zimbabwe, Africa was called to court last week on the account of the two checks it received allegedly as payment for foreign currency deals despite being an unauthorized agent.

Appearing before the Harare magistrate court, the Hyveld Seed Company denied allegations that it was involved in illegal foreign currency transactions that amounted to $900,000. Hyveld Seed Company representative Trevor Hedges said that the two checks were not payments for foreign currency.

The checks were received from two transactions arising from dealings with Treger Holdings Zimbabwe’s sister company Ger and Company who instructed them the said sum of money into its offshore Swiss account during two occasions.

But data seem to point that it was indeed a foreign currency transaction since Treger Holdings paid them the two checks immediately after the money was transferred.

Source: Seed Firm Accused Of Illegal Forex Dealings, allAfrica.com