Inflation beats target
Inflation reached 19.9 percent this year, the central bank said in a preliminary estimate on Saturday, beating its official target thanks to strict price controls that business leaders say are unsustainable in the long term. The government of President Hugo Chavez has capped prices for a wide range of consumer goods, helping contain inflation that has traditionally been the highest in Latin America. The 2012 target had been between 22 percent and 25 percent. However, inflation is seen accelerating next year because Venezuela is expected to devalue the bolivar currency after heavy campaign spending this year that helped ensure Chavez’s re-election.
African smartphone unveiled
A Congolese inventor has unveiled what he says is the first African-designed smartphone. Verone Mankou, 27, said that the so-called Elikia, which means “hope” in the local language, went on sale the day before in the Democratic Republic of the Congo (DR Congo). Mankou, head of the company VMK, said the Android-powered device was on sale only in the DR Congo for now, but he planned to launch it in other countries. The phone was initially due to go on sale in October, but its launch was delayed “because of an explosion in demand,” he said. Though the phone is Congolese by design, it is manufactured in China. It costs about US$170 — a considerable sum in the DR Congo. The phone has a touchscreen, 512 megabytes of RAM and a 650Mhz processor. Its camera is 5 megapixels, and it also comes with GPS and Bluetooth.
Order reversal appealed
Authorities are asking a US appeals court to reverse an order for the country to pay US$1.33 billion to “holdout” creditors who refused to join two swaps for the country’s defaulted debt. Government lawyers said in papers filed on Friday that the order violates the country’s sovereignty. The lawyers said the order also threatens service on at least US$24 billion of the county’s restructured sovereign debt, impairs the rights of third parties and puts global debt markets at risk. The US 2nd Circuit Court of Appeals in New York ordered the country on Oct. 26 to pay the holdouts an equal amount whenever it makes payments on other debt that has been restructured since the country’s economic collapse 11 years ago. It agreed with US District Judge Thomas Griesa, who ruled that with more than US$40 billion in foreign reserves, Argentina can afford to pay. The ruling gave the country a difficult choice: Pay all bondholders equally, or pay none of them and risk going into default.
Bank to start auctions
The central bank said it would start foreign currency auctions yesterday to conserve reserves that have fallen to a critical level, pointing to a deepening economic crisis as President Mohamed Morsi tries to calm political turmoil. The announcement was posted on the bank’s Web site on Saturday just two hours after Mursi used a major policy speech to declare the economy was showing signs of improvement. “This is a massive, massive setback for them,” an economist based outside Egypt said. “If the Egyptian pound is no longer freely convertible, then you’re bound to undo eight years of successful and effective currency management.” The central bank said reserves fell by US$448 million last month to only US$15.04 billion, 60 percent down on their level on the eve of the uprising that swept president Hosni Mubarak from power in February last year.