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Mint issues black-ringed toonie in memory of Queen Elizabeth II

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The Royal Canadian Mint is issuing a new black-ringed toonie to honour Queen Elizabeth II.

The mint says the coin’s black outer ring is intended to evoke a “mourning armband” to honour the queen, who died in September after 70 years on the throne.

The mint says it will start to circulate nearly five million of the coins this month, and they will gradually appear as banks restock inventories.

Aside from the black ring, the mint says the coin retains the same design elements of the standard toonie.

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Four different images of the queen have graced Canadian coins since 1953, when she was crowned.

The core of the commemorative toonie will feature the same portrait of the queen that has been in circulation since 2003, with a polar bear design on the other side.

Queen Elizabeth II served as Canada’s head of state for seven decades and for millions of Canadians, she was the only monarch they had ever known,” Marie Lemay, president and CEO of the Royal Canadian Mint, wrote in a statement.

“Our special $2 circulation coin offers Canadians a way to remember her.”

The mint says it may produce more of the coins, depending on what it calls “marketplace needs”.

This report by The Canadian Press was first published Dec. 7, 2022.

 

The Canadian Press

Economy

How Russia is pushing its central bank to give ‘upbeat’ economic updates

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The Russian government is not loving its central bank’s gloomy economic assessments. Instead, it is reportedly asking for more jolly outlooks.

The Russian economy has been under stress ever since the country invaded Ukraine in February 2022, triggering widespread sanctions from the West and its allies, which hit the energy giant’s oil and gas revenue.

Through it all, the Russian central bank has been candid about its assessment of the country’s economy, which at times stood at odds with more bullish statements from the Kremlin.

But that may soon change — Russian officials are putting pressure on the country’s central bank to give more “upbeat” assessments about the country’s economy, Bloomberg reported on Tuesday, citing people familiar with internal deliberations.

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In December, analysts at the Bank of Russia — headed by governor Elvira Nabiullina — said they anticipated “new economic shocks,” due to a $60 per barrel price cap on Russian oil and the European Union’s ban on the country’s crude. In October, research from the Bank of Russia showed the country’s economic activity stalled in September — in part, due to President Vladimir Putin’s partial mobilization order that sent many fleeing the draft.

Senior government officials have criticized the central bank for mishandling market expectations and for giving forecasts that were too pessimistic and alarmist, Bloomberg reported.

The Bank of Russia, though, is open to improving these forecasts so as to send a signal that it’s on the path to monetary easing in the months ahead, per Bloomberg.

The Russian economy likely contracted by 2.5% in 2022 from a year ago, but was still beating expectations, President Vladimir Putin said in televised remarks on January 17, per Reuters.

It’s not just propaganda. Key to the central bank’s messaging is interest rates. Russia’s key interest rate is 7.5% now, but the government wants the central bank to express more optimism about the economy in a signal that it could start cutting rates, per Bloomberg. But the Bank of Russia is concerned about higher inflation should rates fall.

Russia covers its budget deficit by borrowing domestically, so interest rates are important for the government. A slump in energy revenues, coupled with an increase in defense spending has pushed Russia’s budget deficit to 1.76 trillion rubles in January, or $24.75 billion.

The deficit — which is only for the first month of 2023 — is already at 60% of Russia’s plan for a $2.93 trillion-ruble deficit, Insider previously reported.

The Bank of Russia did not respond to Insider’s request for comment sent outside regular business hours. It’s also in a communication blackout ahead of its first board meeting of 2023 on Friday, per Bloomberg.

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Economy

Biden highlights economy, spars with Republicans in State of the Union speech – Global News

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Biden highlights economy, spars with Republicans in State of the Union speech  Global News

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Given high inflation, slowdown in Canada’s economy is ‘a good thing,’ Tiff Macklem says

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Bank of Canada governor Tiff Macklem says that although a slowing economy may not seem like a good thing, it is when the economy is overheated.

Speaking in Quebec City on Tuesday, Macklem said that higher interest rates are working to cool the economy as elevated borrowing costs are constraining spending on big-ticket items such as vehicles, furniture and appliances.

As demand for goods and services falls, Macklem says the economy will continue to slow.

“That doesn’t sound like a good thing, but when the economy is overheated, it is,” he said.

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In addition to global events, the overheated domestic economy pushed up prices rapidly, he said.

To slow the economy domestically, the Bank of Canada has embarked on one of the fastest monetary policy tightening cycles in its history. It has hiked its key interest rate eight consecutive times since March, bringing it from near-zero to 4.5 per cent.

However, last month, the Bank of Canada said it will take a “conditional” pause to assess the effects of higher interest rates on the economy.

“Typically, we don’t see the full effects of changes in our overnight rate for 18 to 24 months,” Macklem said on Tuesday.

“In other words, we shouldn’t keep raising rates until inflation is back to two per cent.”

However, the governor said the Bank of Canada will be ready to raise rates further if inflation proves to be more stubborn than expected.

Bank of Canada hikes interest rates again to 4.5%

The Bank of Canada is raising interest rates again, bumping it to 4.5 per cent. This marks the eighth increase in less than a year, leaving some homeowners scrambling to keep their mortgages.

As gas prices have fallen and supply chains have improved, inflation in Canada has slowed since peaking at 8.1 per cent in the summer. Macklem called this a “welcome development,” but stressed inflation is still too high.

“If new data are broadly in line with our forecast and inflation comes down as predicted, then we won’t need to raise rates further,” Macklem said.

For inflation to get back to two per cent, Macklem said wage growth will have to slow, along with other prices.

Wage gains lagging inflation

Wages have been growing rapidly for months but continue to lag the rate of inflation. In December, wages were up 5.1 per cent.

Though annual inflation is still at decades-high levels, economists have been encouraged by a more noticeable slowdown in price growth over recent months.

The Bank of Canada forecasts the annual inflation rate will fall to three per cent by mid-year and to two per cent in 2024.

Royce Mendes, an economist with Desjardins, said that Macklem is crossing his fingers that the rate hikes he has implemented so far will be enough to get it done.

“The head of the Bank of Canada seems quite comfortable sitting on the sidelines even as his U.S. counterpart will be discussing the need for further monetary tightening south of the border,” Mendes said.

 

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