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Venezuela's Maduro Plans Shift to a Fully Digitalized Economy – BNN

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(Bloomberg) — Venezuela’s government is planning to move to a fully digital economy as hyperinflation has made worthless bolivar notes practically disappear, and dollarization expands through the local financial system.

The U.S. dollar has operated as an escape valve for Venezuela amid U.S. sanctions and collapsing oil revenues, President Nicolas Maduro said in a televised interview with Telesur on Friday. He said 18.6% of all commercial transactions are in dollars, while 77.3% are carried out in bolivars with debit cards. Only 3.4% are paid with bolivar notes.

“They have a war against our physical currency. We are moving this year to a more profound digital economy, in expansion. I’ve set the goal of an economy that’s 100% digital,” Maduro said, adding that physical money will eventually disappear.

Venezuela’s currency has lost 99% of its value during three years of hyperinflation, forcing the country to issue higher-denomination notes that in turn become useless in record time. The largest note now in circulation, 50,000 bolivars, is worth about $0.04. The government has delayed plans to issue a 100,000 bolivar bill, which currently would be worth less than $0.10.

After formerly subsidized fuel prices were increased in June, cash is now only used to ride public transportation, and the Caracas subway routinely stops charging passengers due to cash shortages.

Since late 2019, local banks have slowly started to offer accounts and financial products in U.S. dollars, but those remain limited as there’s no clearing system in place to allow for digital transactions in U.S. dollars.

Some banks have had technical meetings with Venezuela’s central bank in an attempt to solve the problem amid high skepticism and caution due to U.S. sanctions. But Maduro vowed to create “payment formats” allowing transactions using savings and checking accounts in U.S. dollars.

A press official with the Central Bank of Venezuela didn’t immediately respond to a request for comment.

Despite promising to expand the use of the U.S. dollar in the economy, Maduro said a formal dollarization wouldn’t happen. “Venezuela has its currency and we are going to defend it,” he said.

©2021 Bloomberg L.P.

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China Says Its Economy, Recovering From The Pandemic, Grew 2.3% Last Year – NPR

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People walk in Wuhan on Jan. 10, the eve of the first anniversary of China confirming its first COVID-19 death. Chinese officials said on Monday that its economy managed to grow 2.3% in 2020.

Nicolas Asfouri/AFP via Getty Images

Nicolas Asfouri/AFP via Getty Images

Just over a year after the world’s first coronavirus cases were identified in China, the country’s economy has bounced back from the ravages of the pandemic.

China’s economy grew by 2.3% last year, according to data published Monday by the country’s National Bureau of Statistics. The steady economic recovery was largely expected, and puts China on a track that other countries haven’t achieved.

“It’s likely that China could be the only major economy that has significant positive economic growth in 2020,” Nicholas Lardy, a China specialist at the Peterson Institute of International Economics, told NPR in May. “The U.S. is clearly going to be negative. Europe is negative. Japan is going to be negative.”

When the pandemic first hit, however, China’s economic outlook was a lot less sunny.

Thanks to sweeping and strictly enforced lockdowns, the country’s year-on-year GDP for the first three months of 2020 shrank 6.8%, its biggest drop in decades. And as the economy constricted and unemployment rates rose, officials in the spring took the unprecedented move of scrapping their annual economic growth targets.

As the year progressed and the pandemic receded in China, the country saw an economic upturn helped largely by an increase in consumer spending. Its GDP went up by 3.2% in the second quarter, 4.9% percent in the third quarter and 6.5% for the fourth quarter.

China also reported a record $75.4 billion surplus in November, after exports to the rest of the world jumped $21.1% compared to the previous year. As NPR’s Scott Horsley reported, much of that increase was accounted for by exports to the United States, despite the tariffs imposed by President Trump.

Still, an English translation of the statistics bureau report noted that “the changing epidemic dynamics and external environment pose a multitude of uncertainties and the foundation for economic recovery is yet to be consolidated.”

As NPR’s Emily Feng has reported, Chinese policymakers have pledged to continue policies that support private businesses and consumer demand, but will scale back certain credit-boosting policies in the months ahead.

The country has largely managed to bring the pandemic under control, allowing many businesses to reopen at pre-pandemic levels, according to Feng. And it still imposes strict lockdowns in regions with an uptick in cases: As of mid-January, a cluster of more than 600 cases in Hebei province has prompted the lockdown of some 11 million people.

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Brent crude edges up as optimism over economy trumps demand concerns – TheChronicleHerald.ca

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By Florence Tan

SINGAPORE (Reuters) – Brent crude futures edged up on Tuesday as optimism that government stimulus will buoy global economic growth and oil demand trumped concerns that renewed COVID-19 pandemic lockdowns globally could cool fuel consumption.

Brent crude futures for March rose 20 cents, or 0.4%, to $54.95 a barrel by 0351 GMT after slipping 35 cents in the previous session.

U.S. West Texas Intermediate crude was at $52.19 a barrel, down 17 cents, or 0.3%. There was no settlement on Monday as U.S. markets were closed for a public holiday. Front-month February WTI futures expire on Wednesday.

Investors are upbeat about demand in China, the world’s top crude oil importer, after data released on Monday showed its refinery output rose 3% to a new record in 2020. China was also the only major economy in the world to avoid a contraction last year as many nations struggled to contain the COVID-19 pandemic.

“Yesterday’s data out of China was a positive for oil prices,” Michael McCarthy, chief market strategist at CMC Markets in Sydney said.

Investors are watching out for U.S. President-elect Biden’s inauguration speech on Wednesday for details on the country’s $1.9 trillion aid package.

OANDA’s Asia-Pacific senior analyst Jeffrey Halley said: “Like other asset classes, oil has received a gentle U.S. stimulus tailwind in Asia.”

Oil prices have also been supported by Saudi Arabia’s additional supply cuts in the next two months which are expected to draw down global inventories by 1.1 million barrels per day in the first quarter, ANZ analysts said.

Concerns about rising COVID-19 cases globally and renewed lockdowns weighing down fuel demand kept a lid on oil prices.

ANZ analysts flagged concerns about falling fuel sales in India in January from December and rising COVID-19 cases in China and Japan that could dampen oil demand.

“In Europe and the U.S., the slow rollout of vaccines is also raising concerns that a rebound in demand will remain elusive,” the bank said.

(Reporting by Florence Tan; Editing by Richard Pullin and Kenneth Maxwell)

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Brent crude edges up as optimism over economy trumps demand concerns – Cape Breton Post

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By Florence Tan

SINGAPORE (Reuters) – Brent crude futures edged up on Tuesday as optimism that government stimulus will buoy global economic growth and oil demand trumped concerns that renewed COVID-19 pandemic lockdowns globally could cool fuel consumption.

Brent crude futures for March rose 17 cents, or 0.3%, to $54.92 a barrel by 0150 GMT after slipping 35 cents in the previous session.

U.S. West Texas Intermediate crude was at $52.25 a barrel, down 11 cents, or 0.2%. There was no settlement on Monday as U.S. markets were closed for a public holiday. Front-month February WTI futures expire on Wednesday.

Investors are upbeat about demand in China, the world’s top crude oil importer, after data released on Monday showed its refinery output rose 3% to a new record in 2020. China was also the only major economy in the world to avoid a contraction last year as many nations struggled to contain the COVID-19 pandemic.

“Yesterday’s data out of China was a positive for oil prices,” Michael McCarthy, chief market strategist at CMC Markets in Sydney said.

Investors are watching out for U.S. President-elect Biden’s inauguration speech on Wednesday for details on the country’s $1.9 trillion aid package.

Oil prices have also been supported by Saudi Arabia’s additional supply cuts in the next two months which are expected to draw down global inventories by 1.1 million barrels per day in the first quarter, ANZ analysts said.

Concerns about rising COVID-19 cases globally and renewed lockdowns weighing down fuel demand kept a lid on oil prices.

ANZ analysts flagged concerns about falling fuel sales in India in January from December and rising COVID-19 cases in China and Japan that could dampen oil demand.

“In Europe and the U.S., the slow rollout of vaccines is also raising concerns that a rebound in demand will remain elusive,” the bank said.

(Reporting by Florence Tan; editing by Richard Pullin)

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