News
Thursday 19th September 2024.
September 18, 2024
The half-point cut in the reference interest rate in the United States, announced by the Federal Reserve, will have an impact not only in that country, but also in dollarized economies such as Panama.
The Minister of Economy and Finance, Felipe Chapman , reacted immediately to the news and said through the social network X that it will be the beginning of a downward trend in the cost of money.
“The announcement by the United States Federal Reserve to reduce the reference interest rate target (Fed Funds) by 0.50 percentage points is good news for the world and Panama. It may be the beginning of a downward trend in the cost of money in dollars in the global economy,” said the head of the MEF.
Panama, being a dollarized economy, tends to be affected by the Fed’s decisions regarding the cost of financing, although not immediately, as it has a delayed effect of between one and a year and a half.
The CEO of the Panamanian Banking Association, Carlos Berguido, said it is too early to know what the effect will be on the cost of financing and active interest rates, that is, those on loans and credit cards.
“This seems to be the beginning of the end of the bullish cycle, at the commercial level. We will have to monitor the market to see how the Fed’s announcement is being assimilated by the commercial banks in the United States and later, in Panama,” said Berguido.
The banking union executive said that the impact of the Fed’s announcement of rate changes has a delay of around 180 days in Panama.
He recalled that just as the rise in interest rates began late in the country, so will the reduction.
Economist Ernesto Bazán argues that in Panama approximately 50% of deposits in the banking system are fixed-term and are issued for periods of 6 to 18 months, so he believes that the effect of the Fed’s half-point interest rate reduction will not be felt so quickly in the country.
“Today we cannot expect interest rates in Panama to fall. I don’t think that will happen, because for that to happen, passive rates, that is, the rates that banks pay for deposits, would have to fall, but since there is a large concentration of fixed-term deposits, we have to wait between 6 and 18 months for these rates to begin to normalize to international levels,” he explained.
Additionally, Bazán pointed out that while these passive rates, that is, savings rates, do not fall, active rates, that is, loan rates, will probably not decrease either.
“The situation in Panama is different from what happens in the international market, and this happens both when rates rise and when rates fall. There is no proportionality as immediate and as exact or precise as there is in international financial markets,” he said.
Participants in the debate to address the crisis of the Social Security Fund (CSS) have until next Monday, September 23 to present and support their proposals regarding health services and the Disability, Old Age and Death (IVM) program.
Adequate time has been set for receiving the information to produce a bill that will allow the institution and the retirement structures to continue to operate.
In this regard, it is expected that the draft law document will be ready by October 31.
The information was provided at a press conference today, Wednesday, September 18, after the meeting of the two working groups, the one referring to the IVM and health program.
Francisco Bustamante, appointed advisor to the new general management of the CSS and rapporteur of the IVM table, indicated that five proposals have been presented: four in writing and one digitally.
In addition, a website was created so that the population can monitor the discussion panels. In this way, all the information, proposals, databases and documents that will be used will be available to the Panamanian people.
The website is https://conversatoriocss.aig.gob.pa/ . The status of the various programs and the report on the current financial situation of the CSS can be consulted on that same site.
Bustamante highlighted that some of the points discussed at the IVM roundtable included the presentation of an international consultant, who addressed the issue of the positioning of pension systems in Latin America and, within that context, the reality of Panama. In addition, the presentation of the route to follow was scheduled for the next few days, as well as progress in the presentation of the current situation of the CSS and a matrix was given to each group for the review of the proposals, where comparisons will be made.
Once the meeting was over, the Aeve representatives presented their evaluation of the second meeting to discuss the situation of the CSS. They pointed out some situations that concern them as a worker’s union regarding the methodology of the two working groups, the established hours of the groups, who will evaluate the proposals presented, as well as how to define whether it is a discussion group, a negotiation group, or a listening group.
The Treaty on Mutual Legal Assistance in criminal matters between Panama and Switzerland was approved in the first debate by the Foreign Relations Committee of the National Assembly and sent to the legislative plenary for ratification.
Elías Vargas , head of legal affairs at the Ministry of Foreign Affairs, explained that the “novel” aspect of this treaty is that it facilitates cooperation and procedures for the repatriation of funds seized in judicial cases.
He indicated that this will allow the requesting State to recover money or property resulting from a crime, which is found or seized by the requested State.
Panama has 12 similar treaties in force, but Vargas said that none of them have this new feature included at the moment.
Agustín Almario, senior prosecutor for International Affairs of the Public Prosecutor’s Office , reported that more than $20 million have been seized in Switzerland as a result of investigations being carried out in Panama.
This treaty, he said, will allow for the recovery of that money.
“It is a fiscal tool for the fight against crime,” said Almario, while requesting approval from the deputies, since the country does not have an instrument of this type for cooperation and legal assistance.
He even pointed out that many countries would be eager to reach a type of agreement with Switzerland similar to the one reached by Panama.
According to investigations by the Public Prosecutor’s Office and information provided by Switzerland, as part of the Odebrecht investigation alone, $22 million has been frozen in Swiss banks that were allegedly moved by brothers Ricardo Alberto and Luis Enrique Martinelli Linares , which are supposedly the result of bribes paid by the construction company in exchange for contracts with the Panamanian State.
The Interpol Panama central office arrested an Italian citizen, who is on red alert and wanted in his country for cases related to financial crimes.
According to the National Police , the arrest of this person took place in the La Cresta sector, in the capital city, following an order issued by the Superior Prosecutor’s Office for International Affairs, as he is required by the Ordinary Court of Modena, Italy.
In a statement, the police said that the arrest for extradition purposes is due to the fact that the Italian citizen is wanted for a seven-year prison sentence for the crimes of misappropriation, fraudulent bankruptcy and tax evasion.
The Public Prosecutor’s Office (MP) will formally present an extradition request to the Spanish authorities against Franklin Jiménez Shuterland , alleged leader of the “Terror Killa” gang, which operates in the province of Colón.
Jiménez Shuterland was arrested in Spain following a red alert issued by Interpol.
According to a statement from the MP issued on the morning of Tuesday, September 18, 2024, the Spanish authorities will be asked to schedule a detention hearing for extradition purposes for Jiménez Shuterland, who is wanted for the crime of gang membership. “Terror Killa” is a gang active in the province of Colón, with a presence in the communities of Sabanitas, Irving Saladino, Nuevo México, Portobelo, and also in Chilibre, province of Panama. In August 2019, Jiménez Shuterland was sentenced to 80 months in prison for the crime against collective security, specifically for the illegal possession of weapons and explosives. This sentence was ratified by the Superior Court for the Liquidation of Criminal Cases and the Criminal Chamber of the Supreme Court.
The President of the Republic, José Raúl Mulino , will travel to New York, United States, next Saturday to participate in the 79th General Assembly of the United Nations (UN). It will be his first speech in this space, after having assumed office on July 1.
Mulino, a 65-year-old lawyer, will focus his speech on the following topics: the lists of countries that discriminate against Panama, the situation in Venezuela and irregular migration through the Darien Gap.
The president had already given some details about the focus of his speech at the UN. He did so on September 9 during a meeting with his diplomatic team, in which he announced: “The country that has us on these lists will not have the right to anything from Panama, not even a vote in favor, nor to contracts with the Nation, and much less to important tenders.”
On that occasion, Mulino pointed out that the rejection of the inclusion of Panama in these discriminatory lists is part of an international campaign that will begin with his speech at the UN, in which he will highlight “the injustice that is committed against the country.”
Fuel prices will continue to fall. The National Energy Secretariat reported that starting this Friday, September 20, there will be a decrease in 95-octane and 91-octane gasoline as well as low-sulfur diesel.
95 octane gasoline will drop seven cents and will be on sale at $0.87 cents per liter. Meanwhile, 91 octane gasoline will drop six cents and will be on sale at $0.78 cents per liter.
Low-sulfur diesel will be priced at $0.78 per liter.
These prices will take effect at 6:00 am this Friday, the Energy Secretariat said.