Algeria to block Total from buying Anadarko’s Algerian assets – minister

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FILE PHOTO: A Total flag at La Defense business and financial district in Courbevoie

ALGIERS (Reuters) – Algeria will block Total from acquiring Anadarko’s assets in Algeria, energy minister Mohamed Arkab told reporters on a sidelines of a conference on Sunday.

Occidental Petroleum has agreed to sell Anadarko Petroleum Corporation’s assets in Algeria, Ghana, Mozambique and South Africa to Total for $8.8 billion(6.91 billion pounds) if the U.S. oil company succeeds in completing its plan to take over Anadarko.

“Our ministry has contacted Anadarko to get explanations on this information, but so far we got no answer,” Arkab said.

“It means there is no contract between Total and Anadarko …We have good relations with Anadarko and we will do the utmost to preserve Algeria’s interests, including using our pre-emption right to block the sale,” the minister said.

Federal Reserve building
Image copyrightREUTERS

The Federal Reserve, the US central bank, is expected to cut its main interest rates at a meeting in Washington on Wednesday.

US effective funds rate

Growth has slowed, though there does not appear to be an imminent danger of the economy actually contracting. That said, there have been some warning signs in the financial markets that often do signal a recession is not that far away.

The rest of the world keeps an eye on how well the Fed is managing to keep that balance between growth and inflation, since a healthy US economy reduces the risk of the rest of the world catching a dose of economic slowdown.

TV screen shows news of Fed interest rate cutImage copyrightEPA

What impact does the Fed have on currency markets?

Cuts in interest rates in any country tend to make its currency lose value against others.

That is because lower interest rates mean there is less money to be made by investing in that country’s assets, since they’re yielding less interest. Primarily that means government bonds.

If investors are less keen to buy, for example US government bonds, there is less demand for the currency needed to buy them. So the currency concerned, the dollar in this case, tends to lose value.

Currency movements affect how competitive countries’ exports are. If US rates are cut and the dollar weakens, American exports become cheaper, and imports to the US from elsewhere go up in price. That can have a knock on impact on the price of goods on shop shelves, in other words inflation.

But for other countries importing goods priced in dollars, the impact can be to reduce inflation. When the dollar is weaker it costs other countries less in their domestic currency to buy dollar-priced goods. And that’s not just American exports, lots of commodities including oil are priced in dollars.

What about the impact on international investment flows?

When an economy as large as the US changes its interest rates, it is possible for the subsequent movement of investment funds to be disruptive.

There was an episode in 2013 when the Fed started to consider reducing its quantitative easing programme. That programme involved creating new money to buy financial assets such as government bonds. Reducing QE was in some ways akin to raising interest rates.

The plan was to “taper” the quantitative easing, and the result for emerging economies such as India and Indonesia came to be known as the “taper tantrum”.

Large amounts of money left emerging market economies, and there were concerns at the time that it might even lead to a new financial crisis in those countries. In the event, that did not happen.

This time, because interest rates are likely to be cut, it is more likely that money will go into emerging economies. That can sometimes lead to financial instability (or unsustainable bubbles). That is not an immediate concern now, but it is a reason why governments around the world need to keep a careful eye on what happens in the US.

Confusion over President’s proclamation of ninth Senate

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A document dated May 30, 2019 which announced the Presidential proclamation of the First Session of the Ninth National Assembly billed for Tuesday, June 11, created confusion at the federal parliament on Monday.

The document which had the seal of the Presidency and claimed to have been signed by President Muhammadu Buhari was not addressed to any particular official of the National Assembly.

The Senior Special Assistant to the President on National Assembly Matters (Senate), Senator Ita Enang, whose responsibility it is to convey such document to the national parliament, denied knowledge of such communication when contacted by our correspondent.

Enang simply appealed to our correspondent to suspend any action on the document pending his confirmation.

He was yet to do so as of the time of filing this report.

Attempts to confirm the authenticity of the document from the office of the Clerk to the National Assembly, Mohammed Sani-Omolori, who would execute the proclamation, also failed on Monday.

The Director of Information of the federal parliament, Mr. Rawlings Agada, told our correspondent that he could not confirm the receipt of such communications since the CNA was not available for the necessary clarifications.

The document titled, “Proclamation for the holding of the 1st session of the 9th National Assembly,” read, “Whereas it is provided in Section 64(3) of the Constitution of the Federal Republic of Nigeria 1999 (as amended) that the person elected as President shall have power to issue a Proclamation for the holding of the first session of the National Assembly immediately after his being sworn-in.

“Now, therefore, I Muhammadu Buhari, President Commander-in-Chief of the Armed Forces of the Federal Republic of Nigeria, in exercise of the powers bestowed upon me by Section 64 (3) aforesaid and of all other powers enabling me in that behalf, hereby proclaim that the first session of the Ninth (9th) National Assembly shall hold at 10:00am on Tuesday, 11th June, 2019 in the National Assembly, Abuja.

“Given under my hand and the public seal of the Federal Republic of Nigeria at Abuja, this 30th day of May, 2019. Signed Muhammadu Buhari”

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