🔹The Reserve Bank of India (RBI) has been silently pursuing the internationalisation of it's Structured Financial Messaging System (SFMS) which serves as a secure financial messaging platform for domestic banks and institutions within India. This month's UAE 🇦🇪-India 🇮🇳 MoU agreements on trade settlements in rupees / dirhams & linking their payment systems is one more step towards bypassing SWIFT 🌐.

🔹SFMS already supports ISO 20022 standards and offer enhanced data storage, unlike SWIFT which needs an upgrade. In India, the National Electronics Fund Transfer and Real Time Gross Settlement serve as fund transfer platforms, which are first validated through SFMS. With approximately 250 domestic members currently using SFMS through thick client or cloud-based systems, it has a robust foundation for international expansion.

🔹While SWIFT members face considerable annual charges, SFMS offers a more cost-effective alternative. The estimated cost of internationalising SFMS, including membership fees, exchange rate charges, and money laundering screening, amounts to less than half of SWIFT's charges

🔹The actual transfer of funds is executed by banks using various platforms, including VOSTRO and NOSTRO accounts. (NOSTRO - domestic bank’s account maintained by a foreign bank. VOSTRO -the same foreign bank’s account maintained by the domestic bank.) Earlier in March, the RBI gave approval for opening 60 Special Rupee VOSTRO Accounts (SRVA) in 18 countries including Russia 🇷🇺, Germany 🇩🇪and the UK 🇬🇧.

🔹The UAE now offers India discounts on crude 🛢, which will be more than that of the current level of Russian discounts. Crude oil forms the single-largest component of India’s $84-billion bilateral trade with the UAE 🇦🇪. India is working with other countries on bilateral trade using the rupee and the respective local currency. These countries include - Indonesia 🇮🇩, Russia 🇷🇺, Bangladesh 🇧🇩, Saudi Arabia 🇸🇦.

Video - Dr. Ankit Shah

🔹The US 🇺🇸 imposed new travel restrictions on citizens of Hungary today, (restrictions via the U.S. Visa Waiver Program), over concerns that some Hungarian passports holders weren't sufficiently verified. This comes after Hungary’s parliament adjourned Sweden’s accession to NATO because a two-thirds majority was absent from the vote.

🔹Hungary's 🇭🇺 FM P. Szijjarto revealed that EU 🇪🇺 member states are expecting to fund the war in Ukraine for at least another 4 years at a cost of €5 billion per year. Slovakian 🇸🇰 FM M. Wlachovský rebutted him saying he couldn't recall such a discussion.

🔹Hungarian Minister of State T. Menczer responded to Slovakian FM Wlachovský accusing him of either having a bad short-term memory or lying. Menczer noted that EU FM's agreed at their last meeting to propose financing arms shipments to Ukraine 🇺🇦 for the next 4 years at a combined cost of €20 billion.

🔹Last week 🇭🇺 PM V. Orban was criticised for saying “Ukraine’s sovereignty is practically lost. He also said so-called “Western values” mean just “three things: migration, LGBTQ, and war” and that “the EU rejects Christian heritage".

🔹Last month, Hungary, (1 of 5 EU countries) signed a joint declaration to extend a ban on the domestic sale of Ukrainian grain until at least the end of 2023. In May, the country blocked €500 million-euros of EU 🇪🇺 (off-budget) financing for arming Ukraine and did not agree to any sanctions against Russia 🇷🇺in the nuclear sector. PM Orban also spoke against the Kiev regime's abuse of ethnic Hungarians in Transcarpathia.

🔹In April, Ukraine criticized Hungary's behaviour as a NATO 🇫🇲 member. A bipartisan group in 🇺🇸 Congress drafted US sanctions to target leading Hungarian political figures after FM P. Szijjarto rejected a US State Dep't report on Bosnia-Herzegovina and the FM said the UN should lead an investigation into the sabotage of the Nordstream 1&2 pipelines.

🔹Fitch cut the US’s 🇺🇸 sovereign credit grade one level from AAA to AA+ due to rising deficits and gov't debt. Fitch’s action echoed one made in 2011 by S&P Global Ratings, which was never reversed. The federal deficit hit $1.39 trillion 💵 for the first nine months of the current fiscal year, up some 170% y-o-y. The Treasury this week boosted 📈 its borrowing forecast for the current quarter to $1 trillion, well above the $733 billion it had predicted in May.

🔹US Fiscal Balance as % of Gross Value Added:
The US deficit is close to historical wides, bigger than it’s ever been outside of a recession, and almost as wide as it was in the depths of the GFC. It’s the largest in the world in GDP terms, and it is currently heading in the wrong direction. This heaps more pressure on the gov't debt-to-GDP level, already uncomfortably high at 112%.

🔹Tax 💰 revenues have seen almost their largest annual fall ever, in an economy that’s supposed to be growing at 2.4%. The total interest expense as a percentage of tax revenue is expected to rise sharply in the next year or two. Meanwhile, the Biden admin blames the previous Trump admin for the downgrade and Treasury Sec. J. Yellen says it is puzzling in light of the US's economic strength.

🔹Melt-up scenario?
US Treasury yields have risen every day this week. As the US 🇺🇸Treasury ramps up issuance, corporate borrowing and mortgage rates will soar as their respective UST reference rates rise. 10-year is up 23 bps 20-year is up 27 bps 30-year is up 30 bps

Video source - Peter St. Onge

🔹ECOWAS's 7-day ultimatum threatening military action against Niger’s new regime, if they did not reinstate deposed President M. Bazoum has expired. However, ECOWAS now claims to be building up forces before such a military action in Niger 🇳🇪. The delay also comes after member countries Burkina Faso 🇧🇫 and Mali 🇲🇱, warned other ECOWAS members that such actions “would be tantamount to a declaration of war” against them.

🔹ECOWAS actions now reveals the hands of 'foreign powers' using certain member countries within the bloc to maintain control over resources from Niger 🇳🇪. For example, a third of all French 🇫🇷 nuclear power stations is supplied by Niger's uranium sold at a fraction of the market price. Meanwhile, some of Niger’s neighbours sanctioned the country and stopped transmitting electricity to Niger. 70% of Niger’s power comes across the border from Nigeria 🇳🇬.

🔹Ousted Nigerien leader M. Bazoum previously granted amnesty to certain Al Qaeda and ISIS’ terrorists, claiming to make peace during the ongoing 'Islamic' insurgency across the Sahel region. He left average Nigeriens defenseless when he declared that “arming civilians to fight terrorists is a tragic mistake”. Bazoum now claims Niger can turn into a terrorist hotspot if the US doesn’t manage to return him to power.

🔹The plan to use ECOWAS's military intervention to reinstate Western puppet Bazoum is also centered around the 4,128 km Trans-Saharan natural gas pipeline which is a routed from Nigeria through Niger to Europe 🇪🇺 via Algeria 🇩🇿. In 2019, the 🇺🇸 Pentagon spent $100 million to build a new UAV base in Agadez, Niger. (under US laws, their military cannot remain in countries with an anti-constitutional coup). France has been given 30 days to withdraw its military from Niger.

🔹The hypocrisy is now obvious:
-Western media calls for military intervention to stop Russian influence in Niger.
-ECOWAS prioritizes plans to fight fellow African brothers in Niger instead of 'Islamic' terrorists.

Video source- AfricaNews

The de-industrialisation of Germany 🇩🇪- Part 9:

🔹 CEO Matthias Zachert of Lanxess (a leading German specialty chemicals 🧪co. operating in 32 countries) says "de-industrialisation begins" as the co. plans to close two factories in Krefeld-Uerdingen. He cites high energy costs (due to de-coupling from Russia 🇷🇺) and politics as reasons for this.

🔹Industrial production in Germany fell in June on both a yearly (1.7%) and monthly basis (1.5%). Germany's manufacturing 🏭 PMI plummeted to 38.8, twelve consecutive months of contraction.

🔹Electrical 🔌 company "ABL" of Lauf, operating for over 100 years files for bankruptcy.

🔹Fashion house Rübsamen, in existence for more than 120 years is insolvent.

🔹Munich-based BMP Greengas, the leading provider of biogas in Germany has filed for bankruptcy, affecting the country's 'green energy' transition.

🔹 President & CEO of the Voith Group (global technology co.) Toralf Haag, warns that 'danger of de-industrialisation is very great'.

🔹 The German Red Cross has filed for bankruptcy for five hospitals 🏥. A quarter of all hospitals in Saarland and Rhineland-Palatinate are on the brink of becoming insolvent.

🔹Kassel district of the German state of Hesse sees a 34% increase 📈 in bankruptcies, than in the same period (1st 6 months of the year) of 2022.

🔹 In a Federal Association of Medium-Sized Businesses survey, 48% of directors have considered closing down or moving abroad.

Previous parts on the de-industrialisation of Germany 🇩🇪:

💠 Part 8 - June '23

💠 Part 7 - May '23

💠 Part 6 - Mar '23

💠 Part 5 - Feb. '23

💠 Part 4 - Jan. '23

💠 Part 2 and Part 3 - Nov. '22

💠 Part 1 - Oct. '22

Video source- Phoenix

🔹 Kyrgyz 🇰🇬 President Sadyr Japarov addresses US 🇺🇸 accusations that Kyrgyzstan is helping Russia (both EAEU member states) evade sanctions on “drones, aircraft parts and circuitry”. US Senator Bob Menendez, (D) who chairs the Senate Foreign Relations Committee sent President Japarov a letter of accusation. Menendez warned Kyrgyzstan of its "widespread democratic backsliding and human rights violations". The letter details four sanctioned Kyrgyz co.'s and the potential imposition of sanctions on Kyrgyzstan.

🔹 Japarov confirmed that Kyrgyzstan 🇰🇬 is neutral state on the conflict in Ukraine and Kyrgyzstan has banned the exportation of drones, but that Russia doesn’t need his country to get drones from China 🇨🇳 or anywhere else. He considered this a pressure tactic to sway Kyrgyzstan's foreign policy as it has not officially joined the sanctions by the US and its allies against Russia.

🔹 Kyrgyzstan's trade with the West such as Germany 🇩🇪 (pictured) has increased drastically since Western imposition of sanctions on Russia. Logically, Kyrgyz businesses will find avenues to make profits on selling Russia Western goods. In March, the country stepped up export controls after US, EU, and UK officials threatened penalties for “noncompliance.”

🔹 In April 2023, this channel warned that Kyrgyzstan would be threatened next after EAEU member Kazakhstan 🇰🇿 caved to US 🇺🇸 and UK 🇬🇧 threats. Western threats of sanctions forced Kazakhstan's Halyk Finance Institution to restrict its dealings with Russian 🇷🇺 / Belarusian 🇧🇾 nationals and the country had to stop processing MIR payments.

🔹Booming trade flows with Russia’s neighbors is used as a pretext that sanctions are being evaded, so pressure can be justified against countries trading with Russia. However, Western hypocrisy was highlighted last winter when European 🇪🇺 traders were evading sanctions with fake paperwork claiming Russian/Belarussian firewood 🪵 is from Kazakhstan or Kyrgyzstan.

Crude Oil Update:

🔹 The IEA reported Russia's 🇷🇺 revenue from oil exports for July hit the highest level in 2023 (up by $2.5 billion to $15.3 billion) as the price of Russian seaborne crude moved above the G7 imposed $60 price cap on average for the month of July. India’s 🇮🇳 crude oil imports from Russia in June were the cheapest since Feb. 2022 (excludes shipping).

🔹 Russia may have earned an additional $1.2 billion in the three months to July by exploiting a loophole in the G7 oil price cap because they have been selling their crude to India at below the price cap, but overcharged for shipping costs (since shipping costs are not included in this price ceiling). FT analyzed the fees and charges on tankers leaving the Baltic Sea ports in Russia for India. The findings suggest that the overcharging for shipping costs, plus the fees for Russia-linked tankers 🚢, may have boosted 📈 Russia’s oil trade revenues.

🔹China 🇨🇳 imported an average of 10.29 million bpd 🛢 of crude oil in July, a significant decrease from June but still 17% higher year-over-year. Russia has begun rerouting oil previously destined for Europe to China and Asia via the Arctic Ocean’s North Sea Route.

🔹 Oil supply from the OPEC+ group dipped in July by 1.2 million bpd to 50.7 million bpd, the lowest level in nearly two years as Saudi Arabia 🇸🇦 began its unilateral production cut of 1 million bpd. Crude oil exports from Iran have gone up to 1.4 million bpd, exceeding its stipulated budgeted amount.

🔹 Russia will cut oil exports by 300,000 bpd in September, on top of the already pledged cut of around 500,000 bpd from March until year-end. The US 🇺🇸 is again delaying a replenishment of the nation’s emergency oil reserve (SPR) because of market conditions.

🔹European natural gas prices soared 📈 15% today following last week's 40% jump due to increasing labor action risks in Australia 🇦🇺. Potential strikes at three top LNG sites operated by Chevron and Woodside Energy Group Ltd. could disrupt global supplies. These three locations account for as much as 10% of global LNG exports.

🔹Dutch front-month TTF futures is trading around €39 a megawatt-hour (lower compared to last year). The good news for Europe is that demand for natural gas remains soft as heating season has not arrived yet and German 🇩🇪 factories that use natural gas continue to close down leading Europe into de-industrialization. Storage facilities across the continent are 89.45% full, the highest level for this time of year in over a decade.

🔹The bad news for Europe is it is now subjected to sourcing the LNG around the world, making it prone to supply snarls. Accustomed to cheap Russian 🇷🇺 pipeline gas, European buyers are finding out that the LNG 🚢 spot market have very different rules, which ultimately resulted in higher—much higher—prices when a new buyer as big as the EU 🇪🇺 appeared on the stage.

🔹This means higher prices for longer. And even higher prices and the constant threat of a price shock in case of supply disruption. Volatility this winter could mean higher bills for households, as well as industrial gas consumers. Price levels and price volatility are two distinct concepts. A constant volatility at higher prices results in a greater dollar value price change at those higher prices.

🔹Meanwhile, U.S. 🇺🇸 natural gas futures rose as hotter-than-normal weather kept cooling demand high, with consumption set to rise further into next week.

Video source- Bloomberg

🔹India's 🇮🇳 top oil refiner (IOC) made the first payment in Indian rupees (not USD) for the purchase of a million barrels of oil from the UAE's 🇦🇪 Abu Dhabi National Oil Company (ADNOC). Both countries benefited from reduced dependence on a third-party currency, potentially lowering exchange rate risks and transaction costs.

🔹The UAE now offers India discounts on crude 🛢oil which forms the single-largest component of India’s $84-billion bilateral trade with the UAE. The Reserve Bank of India (RBI) has been silently pursuing the internationalisation of it's Structured Financial Messaging System (SFMS) with the UAE through last month's agreements on trade settlements in rupees / dirhams & linking their payment systems as one more step towards bypassing SWIFT 🌐.

🔹The agreement focuses on creating a Local Currency Settlement System, promoting bilateral transactions using the Rupee-Dirham, encompassing all current account transactions and permitted capital account transactions.

🔹Previously, Russia's 🇷🇺largest oil producer Rosneft and the IOC agreed to use the Asia-focused Dubai 🇦🇪 oil price benchmark. India have begun paying for this oil in UAE dirhams instead of USD. India is prepared to trade in rupees with nations facing a shortage of dollars 💵 so as to "disaster-proof" them and effectively boost its exports.

🔹Four days ago two Indian Naval 🚢 ships, participated in a bilateral Naval Maritime Partnership Exercise with the UAE Navy increasing regional security for maritime trade. Yesterday Dubai's iconic Burj Khalifa was illuminated in the colours of India's flag 🇮🇳 to celebrate India's 77th Independence Day. It also displayed "Happy Independence Day to Mother India" and "Long Live India UAE Friendship".

Video source - Mint

How far will the US and EU go, to fully control Moldovan internal affairs?

🔹 By sanctioning the top Moldovan 🇲🇩 opposition party (Shor Party) leader Ilan Shor, the EU 🇪🇺 is working hand-in-hand with the country’s unpopular gov't to stifle dissent. Without any evidence Shor is accused of working with the Kremlin 🇷🇺 after organizing protests against the high cost of living crisis. The Moldovan judiciary is also being weaponised in attempts to ban the opposition party.

🔹Shor as well as his deputy, Marina Tauber, launched applications to the EU General Court to have the restrictions dismissed. The gov't is also stifling any dissent through the media. The licenses of six TV channels deemed 'pro-Russian' have been suspended since December 2022.

🔹Moldova 🇲🇩 has received €250 million in grants and loans from the EU 🇪🇺 since it was granted candidate status last summer, and $320 million from Washington 🇺🇸. This week Moldova expelled 45 Russian diplomats and other embassy staff claiming antennas on the embassy roof is for spying.

🔹In June, thousands gathered in Chisinau to rally for the future continued celebration of Victory Day as the pro-EU gov't attempts to cancel the holiday. The Grayzone recently revealed the level of corruption in the gov't as Western businesses pay for influence though those close to the Moldovan president. Moldovan politician and lawyer Stanislav Pavlovschi revealed that the US 🇺🇸 ambassador 'governs' Moldova.

🔹In May, Moldovan police raided the central election commission of Gagauzia, alleging irregularities after a politician championing better relations with Russia 🇷🇺 so as to ease the energy crisis, won the local gubernatorial vote. Moldovans 🇲🇩 have been holding regular protests over their dissatisfaction of inflation, cutting off Russian supplied energy and the lack of a neutral status.

Video of Former Moldovan President Igor Dodon - Source (IntelRepublic)

🔹In July, 2023, Japan increased grain (cereal) imports from Russia by 5,679.4% 📈 compared to the same period in 2022, according to the Ministry of Finance of Japan 🇯🇵. This may be an early sign of Japan easing on sanctions against Russia 🇷🇺 in this commodity sector. The reason for this spike is Japan imported 3641MT of grain in July '23 versus 63MT in July '22 when the country was heavily enforcing sanctions on Russian goods, shipping companies and shipping insurance providers.

🔹In total, Japan's imports of grain 🌾 from around the world for July '23 is consistent and normal compared to previous years (Infographic). This sudden spike may be related to the ending of the Black Sea Grain Initiative. However it is not clear if Japan was importing grain under the grain deal because most of the grain ended up in Türkiye 🇹🇷 and the EU 🇪🇺 (see comment section).

🔹Japan's 🇯🇵 imports of grains from Russia in the first six months of 2023 increased by almost 510% compared to the same period last year. Ironically, while Japan was increasing shipments of Russian grain in July '23, it's Foreign Ministry made a press release on July 18th, brutally condemning Russia for ending the grain deal. Note, Japan heavily depends on the US 🇺🇸 for it's grain supply and somewhat Brazil 🇧🇷, not Russia.

🔹However, Japan drastically decreased 📉 it's imports of Russian 🇷🇺 nonferrous ore, nonferrous metals and steel in July '23. This may be linked to an acute economic slowdown that resulted in the country 🇯🇵suffering a trade deficit last month as exports sank for the first time in more than two years. Trade 🚢 volume between Russia and Japan in July '23 decreased by 51%, to approximately $715 million, compared to the same period of the last year.

🔹An unannounced 90 minute meeting (Aug. 18th) between Saudi Arabia's 🇸🇦Crown Prince Mohammed bin Salman and Iran's 🇮🇷 Foreign Minister Hossein Amir-Abdollahian was the highest-level meeting between Saudi and Iranian officials since their countries resumed ties in March after relations were cut in 2016. The last visit of an Iranian FM to Saudi Arabia was that of Mohammad Javad Zarif in 2015.

🔹The two discussed bilateral relations, ways to enhance cooperation, and regional issues. Iranian FM Amir-Abdollahian also took the opportunity to reiterate the Islamic republic's support for the Palestinian 🇵🇸cause at a time when Riyadh is in discussions with the US 🇺🇸 about potentially normalising ties with Israel 🇮🇱. The two sides exchanged competing statements over a disputed gas field that Saudi Arabia plans to develop jointly with Kuwait 🇰🇼.

🔹The China 🇨🇳-brokered deal in March saw the long-time rivals agree to restore diplomatic relations and reopen their respective embassies. Saudi 🇸🇦FM Prince Faisal confirmed that the Saudi embassy in Tehran has also resumed operations. FM 🇮🇷 Amir-Abdollahian's visit to Riyadh came two months after Prince Faisal became the first Saudi foreign minister to travel to Iran since 2006. In April, FM Prince Faisal was the first Saudi official to visit Syria 🇸🇾 since 2011.

🔹Since the March deal, Saudi Arabia 🇸🇦has ramped up a push for peace in Yemen, holding direct talks with Houthi leaders in April in the Yemeni 🇾🇪capital Sanaa. It has also championed the return of key Iran ally Syria to the Arab League at a summit in May.

Video sources - Reuters & ShanghaiEye

🔹India 🇮🇳is considering imposing an export ban on four key metals; lithium, beryllium, niobium, and tantalum because of their importance in powering sectors critical to national security and technological advancements. India’s Parliament also passed the Mines and Minerals Amendment Bill, which will allow commercial mining ⛏in India, of titanium and zirconium addition to the previous mentioned metals. The Bill now awaits the President’s assent.

🔹India discovered a large lithium deposit near Kashmir, this year but is about a decade away from final production. Iran 🇮🇷 discovered its first lithium ore deposit in March, making it the world's 2nd largest reserve. Australia 🇦🇺 has identified at least five mines of of lithium and cobalt for Indian entities to participate in exploration/production. India is discussing the possibility of FTAs with Lithium Triangle countries Peru 🇵🇪 and Chile.

🔹A coalition of US 🇺🇸 tech giants has also protested the abrupt way in which India introduced tech import restrictions this month. The restriction requires Indian companies to get a license before importing PCs, laptops, or servers in hopes of boosting domestic tech production as more countries try to have less dependence on China's 🇨🇳 dominance of critical sectors.

🔹More than 50 companies from around the world are jostling to negotiate lithium deals under the Chilean 🇨🇱 gov't's new plan to have the state take a majority stake in the lithium 🔋industry where the state would take a controlling interest in each partnership. Mexico 🇲🇽 is also reviewing foreign companies that have active mining concessions, with plans to follow in Chile's footsteps.

🔹Saudi Arabia’s 🇸🇦 US Treasury holdings fell to a more than six-year low in June. Saudi Arabia, the largest Middle East holder of US gov't debt, sold more than $3 billion of its shares in June. This brought down Riyadh's total holdings to $108.1 billion, the lowest since December 2016. The Saudi sovereign wealth fund’s disclosed holdings of US 🇺🇸-traded stocks rose almost 10% in value to about $39 billion in the second quarter.

🔹Historically Saudi Arabia used to keep most of its reserves in US Treasuries 💵, but with the country’s diversification strategy Vision 2030 backed by the country’s sovereign wealth fund results in investments being redirected domestically. Oil revenues, are fueling these projects.

🔹Saudi Arabia's cut in oil 🛢 production through OPEC has hindered the US from re-filling its Strategic Petroleum Reserve as oil prices have increased. Closer ties between China and the Middle East have raised concerns in Washington DC 🇺🇸 and European 🇪🇺 capitals after Saudi Arabia signed $10 billion worth of investment agreements with Chinese 🇨🇳companies in June.

🔹The UAE 🇦🇪 offloaded $4 billion worth of US treasury bonds in June, making it the second consecutive month the country sold US government debt. Its holding fell to $65.2 billion from $69 billion in May 2023. Kuwait 🇰🇼 shares of the US debt instrument fell to $40.6 billion in June from $41.4 billion in May. However, much this was off-set by Japan 🇯🇵 increasing US Treasury purchases for June.

🔹China 🇨🇳, the second-biggest holder of US debt, has reduced its stake to the lowest level in more than 14 years. It now holds about $850 billion of US debt, lower than its all-time high of over $1.2 trillion.

Video source - Sean Foo

BRICS Summit highlights. Johannesburg Aug. 22 - 24.

🔹Argentina🇦🇷, Egypt 🇪🇬, the UAE 🇦🇪, Saudi Arabia 🇸🇦, Iran 🇮🇷 and Ethiopia 🇪🇹 will become full-members on Jan. 1, 2024, (the first day of Russia's presidency of BRICS). More than 20 countries have applied to join BRICS as Algeria 🇩🇿 and Indonesia 🇮🇩 are proposed to be the next future members. BRICS will develop a BRICS partner country model for even further expansion.

🔹Member states finance ministries & central banks to consider the possibility of launching national currencies-based payment instruments and platforms. BRICS Payment Task Force to begin study of members cross-border payments systems.

🔹Russia’s Ministry of Economic Development does not expect any "quick breakthroughs" in the creation of a common currency of the BRICS 🇧🇷🇷🇺🇮🇳🇨🇳🇿🇦 nations. There could be, agreements on a basket of local currencies and payment systems so BRICS nations can pay each other based on a set of solutions comparing currency rates.

🔹However, the Russian 🇷🇺 Finance Ministry is discussing the possibility of a unit of account for the BRICS member countries. Not a single currency like in the EU but an alternative to the dollar 💵.

🔹The BRICS Summit declaration states they are in favor of UN 🇺🇳 reform and vow support for the expansion of the developing countries' representation in the UN Security Council. It also cites reforming the WTO and Bretton Woods financial institutions, including the IMF.

🔹India 🇮🇳 offers BRICS countries to establish a space research consortium as they already work on work on a satellite group of BRICS states.

🔹Brazil's 🇧🇷 Treasury Minister Fernando Haddad, confirmed that the Brazilian gov't wants to help Argentina 🇦🇷with exports using the Chinese 🇨🇳Yuan, instead of the dollar for payment. A guarantee, will be activated only if there is a default by the Argentines even in yuan.

🔹The guarantee to be given will be from $100 million to $140 million USD 💵 equivalent, with the conversion (yuan to Brazilian real) made by Banco do Brasil in London. After the exchange, Brazilian exporters will receive payments directly in real.

🔹The proposal is beneficial for Brazilian exporters 🚢, who face difficulties in closing deals with Argentines due to the lack of USD Forex reserves in Argentina which resulted in heavy devaluation of the Argentina Peso. Both countries have said they wanted to "advance discussions on a common South American currency" to be used for financial and trade flows.

🔹Bolivia 🇧🇴 recently started using the Chinese 🇨🇳 yuan to pay for imports and exports with China becoming the third country in South America (after Argentina 🇦🇷 and Brazil 🇧🇷), to do so. The IMF may have to accept the Chinese yuan as a currency for countries to settle their obligations with the IMF following Argentina’s recent debt repayment in yuan, since the yuan is part of the IMF's SDR basket of currencies.

🔹Discussion recently began on the revival of the regional bloc previously known as the Union of South American Nations, or UNASUR. The Southern Common Market (Mercosur), {a customs union comprising of 12 Latin American countries with a free intra-zone trade & a common trade policy} have aired concerns that the South American region is seriously affected by the restrictions and regulations imposed by the US financial system.

Video Source- CanalGov (Treasury Minister Fernando Haddad)

🔹Vietnam will join ASEAN members Indonesia, Malaysia, Thailand, the Philippines and Singapore to establish cross-border payments mechanisms through the Regional Payment Connectivity (RPC) initiative. Indonesia, Malaysia and Thailand have agreed to later facilitate cross-border transactions for financial assets like equities and government bonds in local currencies.

🔹These countries have a mandate to include other ASEAN 🇧🇳 🇰🇭 🇮🇩 🇱🇦🇲🇾 🇲🇲 🇵🇭 🇸🇬 🇹🇭 🇻🇳 members in the RPC initiative. Vietnam's financial authority in charge of domestic payment systems is currently in talks with the local industry to agree on a national QR system for 'instant' retail payments.

🔹Last month, Russia 🇷🇺, (meeting with ASEAN) called for starting consultations on the use of national currencies in mutual payments with ASEAN countries to bypass USD 💵 denominated transactions.

🔹ASEAN member Indonesia plan to use local currencies in bilateral trade with India 🇮🇳. In May, South Korea 🇰🇷 and Indonesia 🇮🇩 signed a MoU to cooperate on promoting the use of their currencies for bilateral transactions. The Bank of Indonesia is working on its own domestic card payment system as part of a strategy to reduce dependency on foreign systems and protect transactions from geopolitical fallout.

🔹Last November, an official meeting of all ASEAN nations' Finance Ministers & Central Bank Governors was held to discuss reduced dependence on the US Dollar, Euro, Yen, and British Pound from financial transactions and move to settlements in local currencies.

Video source - Bank Indonesia

🔹 Officers from the Gabonese 🇬🇦 Armed Forces have appointed the chief of the Republican Guard, General Brice Oligui Nguema, as the Central African country’s new ruler following the ouster of President Ali Bongo. Nguema was chosen to lead the former French colony’s transition council. The overthrown president had been placed under house arrest, while his son N. B. Valentin, as well as certain gov't officials, had been arrested for “high treason.”

🔹The military takeover follows August 26th's presidential election which was rigged for the now former President Ali Bongo winning with 64.27% of the vote. When counting of the votes was almost completed, the then Bongo led gov't cut off the country's internet and put a curfew in place citing the risk of violence.

🔹Gabon 🇬🇦 is the world’s second-biggest manganese producer after South Africa, and Comilog (a subsidiary of French owned Eramet) extracts 90% of Gabon’s manganese ⛏. Another subsidiary of the French 🇫🇷 controlled Eramet is Setrag, which operates the Trans-Gabon Railway, the country’s only railway, where the manganese and other raw materials (oil, wood, uranium) are exported out of the country.

🔹The TotalEnergies EP Gabon subsidiary is 58.28% owned by France's 🇫🇷 TotalEnergies SE, 25% by the Gabonese Republic and 16.72% by the public. It's Q2 2023 oil production was 15,700 bpd 🛢 with revenues amounting to $107 million for the quarter. Perenco, headquartered in London & Paris, extracts 65,000 bpd of oil and 680,000m3 of gas per day in Gabon.

🔹The UN 🇺🇳 Secretary General A. Guterres, the US 🇺🇸, Canada 🇨🇦, UK 🇬🇧 and France 🇫🇷 have all condemned the coup, calling for a return to "democratic, civilian-led governance". The EU 🇪🇺 calls for restraint from all parties in Gabon. The African Union’s Peace and Security Council decided to “immediately suspend” Gabon from its activities. The West controlled ECOWAS bloc has also condemned the coup. France has 400 troops based in Gabon.

🔹Oil prices hit 7-month highs amid an expected extension of a voluntary production cut by Saudi Arabia 🇸🇦 of 1 million bpd into October and Russia 🇷🇺cutting exports by 300,000 bpd in September, following a 500,000 bpd cut in August. China's 🇨🇳 manufacturing activity unexpectedly expanded in August.

🔹The price of Russia’s flagship crude grade, Urals, averaged $74 per barrel in August, way above the G7/EU price cap of $60 as Western shippers find alternative shipping insurance providers for Urals cargo and Russia's shadow fleet 🚢 continue to deliver oil bypassing the price cap.

🔹Russia has been exploiting a loophole in the oil price cap by selling their crude to India 🇮🇳 at below the price cap, but overcharged for shipping costs (since shipping costs are not included in this price ceiling).

🔹The oil price cap is evidently failing as President Putin recently signed into law amendments in the tax code in the energy sector which will narrow the discount of Urals crude to Brent to $20 per barrel 🛢 from September from a $25 discount. Russia also raised its oil export levy to $21.40 per ton started on September 1, the highest level this year, with the previous oil export duty being $16.90 per ton.

🔹Moscow is unlikely to give in to the mandate discounted price in the foreseeable future. The EU 🇪🇺 will now be challenged to increase oil imports from countries without discounts, leaving Europe to face the surge in oil prices for the short term at least.

🔹The IEA reported Russia's revenue from oil exports for July hit the highest level 📈 in 2023 (up by $2.5 billion to $15.3 billion). The US's 🇺🇸 Strategic Petroleum Reserve (SPR) is still sitting at a near 40-year low of 349.5 million barrels.

🔹EU 🇪🇺 imports of Russian liquefied natural gas (LNG) were up 40% between January and July 2023. The EU is set to import record volumes of LNG🚢 from Russia 🇷🇺 this year, despite claims of cutting reliance on Russian energy. In the first 7 months of 2023, Belgium 🇧🇪 and Spain were the second and third-biggest buyers of Russian LNG behind China 🇨🇳. For this period, Russian LNG accounted for 21.6mn cubic metres (cm), or 16%, of the EU’s total 133.5mn cm of LNG imports.

🔹In that period, EU’s purchases of Russian LNG were worth $5.75 billion (5.29 billion euros). Spain is bought up 18% and the EU 52% of Russia’s LNG exports. Spain's 🇪🇸 Energy Minister T. Ribera ironically said Russian LNG should be part of EU talks on sanctions. The jump comes from a low base as the EU did not import significant amounts of LNG before Feb. 2022 due to its reliance on piped gas from Russia.

🔹The EU 🇪🇺 have worked so hard to wean themselves off piped Russian gas only to replace it with more expensive shipped equivalent from the US, Russia and others. EU officials have pointed to an overall effort to phase out Russian fossil fuels by 2027. EU energy ministers plan to ban Russian and Belarusian 🇧🇾 co.' s booking capacity on EU LNG infrastructure in an effort to find a legal way to prevent imports.

🔹The EU also banned Russian entities from storing gas in the bloc and prohibited most new investments in the Russian energy sector. Spot LNG prices have fallen significantly since last summer. As of last month, prices cooled by nearly 83% compared to 2022. The EU's gas storage tanks are nearly 92% full.

🔹However, market uncertainties, including the risk of strikes at LNG hubs in Australia 🇦🇺, or a spike in industrial demand can ignite volatility in European gas markets. A full energy crisis last year was avoided after LNG imports to Europe ballooned from 80 bcm in 2021 to 130 bcm in 2022, more or less replacing all the missing Russian gas.

🔹The prices of Vietnam's 🇻🇳 exported rice (the world's third-largest exporter after India and Thailand) remain the highest in the world, with 5% broken rice reaching US$638 per tonne, following India's 🇮🇳 recent ban on its largest rice export category (non-basmati white rice). At the Mekong Delta known as Vietnam's rice bowl, where 90% of the nation’s rice exports are grown, farmers said they can barely keep up with the demand.

🔹 Last month, India has imposed a 20% duty on exports of parboiled rice with immediate effect. Rice prices in key exporting countries have climbed around 20% since India's export ban. They have made an exemption for friendly countries, with export quotas of non-basmati white rice to Bhutan 🇧🇹, Mauritius 🇲🇺and Singapore 🇸🇬.

🔹Rice🌾 prices soared to the highest in almost 15 years in Asia on mounting concerns over global supplies as dry weather (drier conditions with the onset of El Nino) threatens production in Thailand.

🔹Last week, the Philippines 🇵🇭 (world's second-largest rice importer) imposed a price cap on retail rice due to soaring food inflation. Indonesia is looking to import rice from Cambodia 🇰🇭 and Myanmar 🇲🇲 to top up gov't stocks. Myanmar plans to temporarily restrict rice exports to control rising domestic prices. In July, The UAE banned rice exports and re-exports for four months.

🔹Earlier this year, Thailand 🇹🇭 saw strong demand & a strengthening Thai currency has also helped to push up dollar-denominated rice prices. In September 2022, India banned exports of broken rice and imposed a 20% duty on exports of various grades of rice. This came after planting areas of the crop declined by 13% due to heatwaves and drought. China 🇨🇳 is virtually self-sufficient in rice. Imports of rice only account for 3% of the nation's total demand.

Video source - CNA