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Saturday 21th March 2020

Quote of the day: “Extraordinary times require extraordinary action. There are no limits to our commitment to the euro.” C.Lagarde

BCE STIMULUS PLAN

1. €750 billion in bond purchases to calm down sovereign debt markets,

2. Lifted self-restriction of buying a maximum of 1/3 of sovereign debt.

3. This new feature looms a blocking minority right from ECB in any future soverign debt restructuring negotiations, which would force it to vote. A vote in favour of a debt restructuring that favoured a member state by reducing its overall debt could be attacked for being monetary financing.

4. The central bank also confirmed that it would buy Greek bonds for the first time since the Eurozone crisis.

COVID IMPACT IN AFRICA : Sanitary disaster looms

· Risk of contamination is extremely high in Africa as African countries do not benefit from necessary infrastructures. High poverty level makes confinement regulation impossible as the most vulnerable need to go out to get daily food.

· Only 50 care ventilators available in Senegal.

· 20 Millions of jobs put at risks (heavily from Tourism and Oil industries)

· Optimist scenario: Ending July -0.8% GDP

· Pessimist scenario : Ending end of august -1.1% GDP

Opinion: Why is the tally of death from COVID-19 important? Indicator as to when the infection will plateau and ultimately is an indicator as to when economies reopen.

Market news:

· Italy unlock €400B amid corona crisis of which €200B is aimed at internal market

· Nationalization talk Air France, Boeing

· Private equity lobbeing for bail out

Lesson of the day:

IMF TOOL: Special drawing rights (SDRs) are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund (IMF).[1] SDRs are units of account for the IMF, and not a currency per se.[2] They represent a claim to currency held by IMF member countries for which they may be exchanged.[3] SDRs were created in 1969 to supplement a shortfall of preferred foreign exchange reserve assets, namely gold and U.S. dollars.[3] The ISO 4217 currency code for special drawing rights is XDR and the numeric code is 960.[4] SDRs are allocated by the IMF to countries,[3] and cannot be held or used by private parties

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