Crypto Is Turbulent; Mexico Asserts Power

Amid rising fuel and food prices, Lesotho’s civil servants are threatening to strike unless they receive a 20% salary increase. They have been forced to borrow money to cover basic living expenses in this southern African country of just over 2 million persons.

“We are taking loans because the salaries cannot give us a decent life,” Letsatsi Ntsibolane, a teacher, told OZY. The Lesotho Union of Public Employees secretary general Motebang Leboela vowed to galvanize workers to vote the government out at the country’s elections in October if their salary demands went unfulfilled.

The nation’s Ministry of Labour and Employment did not respond to OZY’s request for comment.

Egyptian finance minister Mohamed Maait says high oil and food prices will cost the country’s budget an additional $10.2 billion. The largest economy in North Africa and the second largest on the continent, Egypt has suffered heavily from reductions in tourism due to the COVID-19 pandemic. (Source: Reuters)

Crypto lender Celsius Network Ltd., which manages billions of dollars’ worth of digital coins, halted withdrawals from its platform earlier this week. The move contributed to a nosedive for the world’s most valuable cryptocurrency, bitcoin, which fell below $25,000 for the first time in nearly two years. Celsius had previously promised yields as high as 17% on some of its products, and the decision to freeze withdrawals has brought the company under scrutiny. Given market volatility, however, reduced values in digital assets are to be expected, according to ChainUp chief marketing officer, Jeff Mei. “Risky and highly liquid cryptocurrencies are usually the first to be sold in a market selloff,” he said. (Sources: The Wall Street Journal, Bloomberg)

The Mexican government has forced some foreign-owned power plants to close, arguing that “private energy companies have plundered Mexico like Spanish conquistadors of old,” according to the Wall Street Journal. Rather than rely on foreign outfits, President Andrés Manuel López Obrador plans to bolster domestic markets and state participation in the national economy; last year, his government seized control of a large oilfield that had been discovered by a U.S. company. “It’s a closing off of Mexico,” Mexico’s Tecnológico de Monterrey economist Gabriela Siller said. (Source: The Wall Street Journal)

The dollar has reached its highest value in nearly nine months after previously showing signs of slowing down. As of Monday, according to the Bloomberg Dollar Spot Index, the greenback had grown 0.8% since April 2020 relative to other major currencies. According to the Wall Street Journal, tighter monetary policy at the Federal Reserve — which raises investor confidence in the dollar — is a signal that Fed officials are willing to tolerate higher unemployment to dampen inflation. At 3.6%, last month’s U.S. unemployment rate had nearly reached its pre-pandemic level of 3.5%, which was a half-century low. (Sources: Bloomberg, The Wall Street Journal).

Malaysian Prime Minister Ismail Sabri Yaakob has announced that his government will introduce a “moving ceiling price” for consumer goods in order to protect economically vulnerable citizens. The idea behind the measure is to prevent consumer prices from rising beyond a specified level amid increased global volatility. Malaysia will also attempt to enhance domestic production and reduce dependence on imports by increasing the area of land dedicated to agriculture. (Source: Bloomberg)

Asia’s second-largest economy, Japan, has seen its currency reach its lowest point in over two decades, with $1 buying about 135 yen. As a result of high commodity prices globally, most central banks have tightened their policies, yet Japan so far has resisted. On Monday, Bank of Japan Governor Haruhiko Kuroda acknowledged that the yen’s fall was a drag on the domestic economy. (Source: Bloomberg)

on The Carlos Watson Show!

As Europe prepares to wean itself off Russian energy, some factories are shutting down after failing to find alternatives. Last month, as part of its response to the invasion of Ukraine, the European Union encouraged member nations to set energy-saving targets of 13% to limit Russian oil and gas revenues. European producers of chemicals, fertilizer, steel and other heavily energy-dependent products now face acute challenges, with some forced to close. Bloomberg News energy and commodities opinion columnist Liam Denning said such sacrifices were necessary in the West’s “energy war.” (Sources: Bloomberg, The Wall Street Journal)

British retail and commercial giant Lloyds Bank Plc is set to pay £1,000 ($1,216) in addition to wages to combat the surging cost of living in the U.K. Last month, the Bank of England predicted that national inflation would reach 10% by year’s end owing to increased energy and food costs. As consumers face higher monthly expenses, Lloyds will make the one-time payment of £1,000 to each of its 64,182 employees in August, Bloomberg News reports. (Source: Bloomberg)

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