Business

BRICS Currency May Signal the End to the Greenback

For many years, the US dollar has been the official currency for foreign trade. However, there has recently been talk of establishing a new BRICS currency in order to dump the greenback and challenge American hegemony.

This de-dollarization has gained momentum in recent months, particularly since the Russia-Ukraine conflict started in February. Last week, Alexander Babakov, the deputy chairman of the State Duma, was quoted as saying that the BRICS countries are in the process of developing a new payment medium based on a strategy that “does not defend the dollar or euro.”

Is the BRICS group truly developing a new trade currency? Who are the leaders of this movement? Will it help India? Will the scheme come to fruition? This topic raises several concerns, which we attempt to address.

Reliance on the US dollar and the US economy

The US dollar has been referred to as the “king of currencies.” In 1944, it was designated as the world’s formal reserve currency. The conclusion was reached by a delegation of 44 Allies known as the Bretton Woods Agreement.

Since then, the dollar has held a commanding position in the global economy. It has given the United States disproportionate power over other economies. In reality, the United States has long used sanctions to achieve foreign policy objectives.

However, not everyone agrees with US standards, and countries such as Russia and China would like to end dollar hegemony. This is known as de-dollarization, and it relates to the process of reducing the dollar’s dominance in global markets. It is the practice of substituting the US dollar as the trading currency for oil and/or other commodities.

De-dollarization supporters argue that the process would reduce other countries’ reliance on the US dollar and the US economy, potentially mitigating the effect of economic and political changes in the US on their own economies. Furthermore, nations can reduce their exposure to currency fluctuations and interest rate changes, thereby improving economic stability and lowering the risk of financial crises.

This trend has accelerated in recent years, particularly in the prior year. The International Monetary Fund observed in 2022 that central banks are not holding the dollar as reserves in the same quantities as in the past.

“According to the IMF’s Currency Composition of Official Foreign Exchange Reserves data, the dollar’s share of global foreign-exchange reserves fell below 59% in the fourth quarter of last year, extending a two-decade decline,” the paper stated.

D-dollarization in international trading

“Importantly, the decline in the dollar’s share has not been accompanied by a rise in the shares of other long-standing reserve currencies, such as the pound sterling, yen, and euro. Rather, the shift has been in two directions: one-quarter into the Chinese renminbi and three-quarters into the currencies of smaller nations that have played a more limited role as reserve currencies.”

Western governments froze $300 billion of Russia’s foreign currency reserves last year, nearly half of the total, to punish Russia for its invasion of Ukraine, and expelled Russian banks from the Swift international payments system.

“The so-called dollar “weaponisation” has rattled many countries, not just Russia,” says Jason Hollands, managing director of investment platform Bestinvest.

“Countries willing to continue trading with Russia, such as India and China, have begun to do so in rupees and yuan instead, sparking speculation about the de-dollarization of the international trading order.”

He went on to say that Brazil and China are now trading in yuan, which is assisting to establish the Chinese renminbi as an international currency and a dollar challenger.

India, too, has been attempting to wean itself off the currency. Recently, 18 countries, including the United Kingdom, Germany, Russia, and the United Arab Emirates, were granted approval to trade in Indian rupees. In February, renowned economist Nouriel Roubini predicted that the Indian rupee would eventually become one of the world’s reserve currencies.

In an interview with First Post, the economist known as Doctor Doom stated, “One can see how the rupiah could become a vehicle currency for some of the trade that India does with the rest of the world, particularly South-South trade.”

“It (the Indian rupee) could be a unit of account, a means of payment, or a store of value.” Certainly, the rupiah has the potential to become one of the world’s reserve currencies.”

The Countries of the BRICS Currency

Moving forward, the BRICS (Brazil, Russia, India, China, and South Africa) group is considering creating a new currency to facilitate commerce. The new financial deal could be seen as early as August, when the countries gather in South Africa for their annual summit.

According to sources, Russia is behind the plan because it is facing economic sanctions from the West as a result of its invasion of Ukraine.

Alexander Babakov emphasized that the establishment of a common currency that could be used for payments would benefit both Russia and India, calling it the “most viable” option at this time. “New Delhi and Moscow should establish a new economic association with a new shared currency, which could be a digital ruble or the Indian rupee,” Babakov said.

He went on to say that China would be crucial in the development of a common currency because it would bring an extra 1.4 billion people into the system. “New Delhi, Beijing, and Moscow are now instituting a multipolar world that is supported by the vast majority of governments,” he said. “Its composition should be based on the inclusion of new monetary ties based on a strategy that does not defend the US dollar or the euro, but rather creates a new currency capable of benefiting our shared objectives.”

Surprisingly, Brazil has already started to accept yuan trade settlements and investments. India and Russia use the Rupee-Rouble trade mechanism to resolve trade debts in rupees rather than dollars or euros.

This demonstrates that the BRICS nations intend to change the dollar-dominated system, which will ultimately lead to global de-dollarization.

According to reports, a new BRICS currency could be announced in August when the collective’s leaders gather in South Africa.

If the BRICS countries follow through on their plan and create a new currency, it could help stabilize their currencies. It would imply increased consumer confidence for a BRICS investor. This would result in increased spending and economic development.

Will India, however, adopt this new currency? Will it want to be economically linked with China, with whom it is locked in a border standoff? Furthermore, some experts believe that this new agreement may help Beijing more than New Delhi.

What transpires next is a mystery. But one thing is certain: the dollar is losing its value. We’ll keep a watch on it and get back to you as soon as we can.

Business

PepsiCo Reduces Revenue Projections As North American Snacks And Key International Markets Underperform.

(VOR News) – In the third quarter of this year, Pepsi’s net income was $2.93 billion, which is equivalent to $2.13 per share. This was attributed to the company.

This is in stark contrast to net income of $3.09 billion, which is equivalent to $2.24 per share, during the same period in the previous year. The company’s earnings per share were $2.31 when expenses were excluded.

Net sales decreased by 0.6%, totaling $23.32 billion. Organic sales increased by 1.3% during the quarter when the effects of acquisitions, divestitures, and currency changes are excluded.

Pepsi’s beverage sales fell this quarter.

The most recent report indicates that the beverage and food sectors of the organization experienced a 2% decline in volume. Consumers of all income levels are demonstrating a change in their purchasing habits, as indicated by CEOs’ statements from the previous quarter.

Pepsi’s entire volume was adversely affected by the lackluster demand they encountered in North America. An increasing number of Americans are becoming more frugal, reducing the number of snacks they ingest, and reducing the number of times they purchase at convenience stores.

Furthermore, Laguarta observed that the increase in sales was partially attributed to the election that occurred in Mexico during the month of June.

The most significant decrease in volume was experienced by Quaker Foods North America, which was 13%. In December, the company announced its initial recall in response to a potential salmonella infection.

Due to the probability of an illness, the recall was extended in January. Pepsi officially closed a plant that was implicated in the recalls in June, despite the fact that manufacturing had already been halted.

Jamie Caulfield, the Chief Financial Officer of Pepsi and Laguarta, has indicated that the recalls are beginning to have a lessening effect.

Frito-Lay experienced a 1.5% decline in volume in North America. The company has been striving to improve the value it offers to consumers and the accessibility of its snack line, which includes SunChips, Cheetos, and Stacy’s pita chips, in the retail establishments where it is sold.

Despite the fact that the category as a whole has slowed down in comparison to the results of previous years, the level of activity within the division is progressively increasing.

Pepsi executives issued a statement in which they stated that “Salty and savory snacks have underperformed year-to-date after outperforming packaged food categories in previous years.”

Pepsi will spend more on Doritos and Tostitos in the fall and winter before football season.

The company is currently promoting incentive packets for Tostitos and Ruffles, which contain twenty percent more chips than the standard package.

Pepsi is expanding its product line in order to more effectively target individuals who are health-conscious. The business announced its intention to acquire Siete Foods for a total of $1.2 billion approximately one week ago. The restaurant serves Mexican-American cuisine, which is typically modified to meet the dietary needs of a diverse clientele.

The beverage segment of Pepsi in North America experienced a three percent decrease in volume. Despite the fact that the demand for energy drinks, such as Pepsi’s Rockstar, has decreased as a result of consumers visiting convenience stores, the sales of well-known brands such as Gatorade and Pepsi have seen an increase throughout the quarter.

Laguarta expressed his opinion to the analysts during the company’s conference call, asserting, “I am of the opinion that it is a component of the economic cycle that we are currently experiencing, and that it will reverse itself in the future, once consumers feel better.”

Additionally, it has been noted that the food and beverage markets of South Asia, the Middle East, Latin America, and Africa have experienced a decline in sales volume. The company cut its forecast for organic revenue for the entire year on Tuesday due to the business’s second consecutive quarter of lower-than-anticipated sales.

The company’s performance during the quarter was adversely affected by the Quaker Foods North America recalls, the decrease in demand in the United States, and the interruptions that occurred in specific international markets, as per the statements made by Chief Executive Officer Ramon Laguarta.

Pepsi has revised its forecast for organic sales in 2024, shifting from a 4% growth rate to a low single-digit growth rate. The company reiterated its expectation that the core constant currency profitability per share will increase by a minimum of 8% in comparison to the previous year.

The company’s shares declined by less than one percent during premarket trading. The following discrepancies between the company’s report and the projections of Wall Street were identified by LSEG in a survey of analysts:

SOURCE: CNBC

Business

Old National Bank And Infosys Broaden Their Strategic Partnership.

(VOR News) – Old National Bank, a commercial bank with its headquarters in the Midwest, and Infosys, a firm that specializes in information technology, have recently entered into a strategic expansion of their link, which has been in place for the past four years.

This expansion is more likely to take place sooner rather than later, with the likelihood being higher.

For the purpose of making it possible for Old National Bank to make use of the services, solutions, and platforms that are offered by Infosys, the objective of this expansion is to make it possible for the bank to transform its operations and processes through the application of automation and GenAI, as well as to change significant business areas.

This lets the bank leverage Infosys’ services, solutions, and platforms.

Old National Bank Chairman and CEO Jim Ryan said, “At Old National, we are committed to creating exceptional experiences for both our customers and our fellow employees.”

This statement is applicable to Old National Bank. Infosys is carefully managing the business process innovations that it is putting us through, putting a strong emphasis on efficiency and value growth throughout the process to ensure that it is carried out efficiently.

This is a routine occurrence throughout the entire operation. Because of Infosys’ dedication to our development and success, we are incredibly appreciative of the assistance they have provided.

Old National has been receiving assistance from Infosys in the process of updating its digital environment since the year 2020, according to the aforementioned company.

Ever since that time, the company has been providing assistance. The provision of this assistance has been accomplished through the utilization of a model that is not only powerful but also capable of functioning on its own power.

Infosys currently ranks Old National thirty-first out of the top thirty US banks.

This ranking is based on the fact that Old National is the nation’s largest banking corporation.

It is estimated that the total value of the company’s assets is approximately fifty-three billion dollars, while the assets that are currently being managed by the organization are valued at thirty billion dollars.

Dennis Gada, the Executive Vice President and Global Head of Banking and Financial Services, stated that “Old National Bank and Infosys possess a robust cultural and strategic alignment in the development, management, and enhancement of enterprise-scale solutions to transform the bank’s operations and facilitate growth.”

This remark referenced the exceptional cultural and strategic synergy between the two organizations. Dennis Gada is the one who asserted this claim. This was articulated explicitly concerning the exceptional cultural congruence and strategy alignment of the two organizations.

We are pleased to announce that the implementation of Infosys Topaz will substantially expedite the transformation of Old National Bank’s business processes and customer service protocols. We are exceedingly enthusiastic about this matter. We are quite thrilled about this specific component of the scenario.

Medium-sized banks operating regionally will continue to benefit from our substantial expertise in the sector, technology, and operations. This specific market segment of Infosys will persist in benefiting from our extensive experience. This phenomenon will enable this market sector to sustain substantial growth and efficiency benefits.

SOURCE: THBL

Business

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

The largest regulated water and wastewater utility company in the United States stated Monday that it had been the target of a cyberattack, forcing the company to halt invoicing to consumers.

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

American Water, based in New Jersey and serving over 14 million people in 14 states and 18 military facilities, said it learned of the unauthorized activity on Thursday and quickly took precautions, including shutting down certain systems. The business does not believe the attack had an impact on its facilities or operations and said employees were working “around the clock” to determine the origin and scale of the attack.

water

The corporation stated that it has alerted legal enforcement and is cooperating with them. It also stated that consumers will not be charged late fees while its systems are unavailable.

According to their website, American Water operates over 500 water and wastewater systems in around 1,700 communities across California, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Maryland, Missouri, New Jersey, Pennsylvania, Tennessee, Virginia, and West Virginia.

SOURCE | AP