The International Monetary Fund announced Friday it had reached an agreement with Ukraine on economic policies that would unlock a new loan deal that will provide nearly $4 billion.

The new 14-month standby loan deal replaces an existing four-year financial aid package agreed in March 2015 and due to expire in five months, the IMF said in a statement.

The agreement must be approved by the IMF board, which will come later in the year after authorities in Kyiv approve a 2019 budget “consistent with IMF staff recommendations and an increase in household gas and heating tariffs,” a step the government had agreed on but never implemented.

But the deal also stresses the need for “continuing to protect low-income households.”

Ukraine Prime Minister Volodymyr Groysman had been seeking the additional financing from the Washington-based lender to help his crisis-hit nation.

Groysman on Friday announced a gas price increase of 23.5 percent to take effect November 1.

He said the “incredible efforts” of Ukrainian negotiators managed to reach a compromise with the IMF and reduce the initial demand to raise prices by 60 percent.

“If we are not able to continue cooperation with our international partners … this could lead to the country being put into default,” he said.

Ukraine has not received any money from the IMF since April 2017, when the fund released $1 billion for the cash-strapped country to repay loans. It had received less than $9 billion of the original $17.5 billion package.

Talks on economic reform measures that would satisfy IMF requirements and allow the release of further aid had been hung up for months, as the fund awaited the government’s approval of a budget, pension reform and an anti-corruption court.

A gas price hike is a sensitive issue for the cash-strapped country as its pro-Western leadership faces presidential and parliamentary elections in 2019.

The IMF said the new loan “will provide an anchor for the authorities’ economic policies during 2019.”

Building on progress under the previous financing package, the loan will “focus in particular on continuing with fiscal consolidation and reducing inflation, as well as reforms to strengthen tax administration, the financial sector and the energy sector,” the IMF said.

An IMF lifeline helped the country to recover from crises sparked by a Russian-backed war in the separatist industrial east that began in April 2014 and has claimed more than 10,000 lives.

The loss of industries in the war zone and flight of foreign investors saw the former Soviet republic’s economy shrink by 17 percent in 2014-2015.

The IMF now forecasts the economy will grow by 3.5 percent this year and 2.7 percent in 2019.

Following the announcement, debt rating agency Standard and Poor’s affirmed the country’s credit score at “B-” with a stable outlook.

“We expect the new arrangement will aid Ukraine’s efforts to cover sizable external debt obligations maturing next year, and also help to anchor macroeconomic policies through the 2019 presidential and parliamentary elections,” S&P said in a statement.

The IMF loan is also likely to unlock credit from other international donors, the ratings agency said.
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A women-to-women investment fund is coming to Britain next month to boost financing for female-owned businesses, its founder said Thursday, as efforts grow to close the gender investing gap.

SheEO has lent more than $2 million to 32 female social entrepreneurs in the United States, Canada and New Zealand to grow their businesses since 2015 in an attempt to address a global gender investment gap.

“Most of the people writing checks and investing are men,” founder Vicki Saunders told the Thomson Reuters Foundation. “SheEO wants to fund female innovators with great ideas to create stronger communities and a better world.”

Support for female entrepreneurs

It is the latest venture to support female entrepreneurs around the world, who often face more obstacles than men, including a lack of access to finance, business networks, international markets and role models.

Three out of 10 U.S. businesses are owned by women but they only receive $1 in investment for every $23 that goes to male-led businesses, the Senate Small Business and Entrepreneurship Committee found in 2014.

A Goldman Sachs-World Bank Group partnership to provide capital to women entrepreneurs in emerging markets reached $1 billion in investments in May.

How it works

SheEO brings together 500 women each year who contribute $1,100 each, which they pool and lend, interest-free, to five women-led businesses of their choice.

The loans are paid back over five years and then loaned out again, creating a perpetual fund that SheEO hopes will grow to $1 billion, with 1 million investors supporting 10,000 women-led ventures.

More than 300 women in Britain wrote to SheEO asking it to launch there, Saunders said ahead of a visit to London where she hopes that 500 female investors will come on board.

Workplace gender equality is in the spotlight in Britain, where just 6 percent of the biggest publicly listed companies are headed by women and pay disparities were revealed at major institutions last year.

Twenty One Toys founder Ilana Ben-Ari, one of the first to get SheEO funding in 2015, said it changed her business, enabling her to push ahead with production and hire staff to help with a stressful workload. Her revenue has now doubled.

“It was easy to get my foot in the door and have a meeting but it was near impossible to have a serious conversation about my business,” she said, describing her efforts to get financing from venture capitalists. “Halfway through that meeting you find out — this isn’t a meeting, this is a date.”
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U.S. stocks fell more than 1 percent on Thursday as the European Commission issued a warning regarding Italy’s budget and concerns mounted about the possibility of strained relations between the United States and

Saudi Arabia.

S&P 500 technology stocks fell more than 2 percent, as did the tech-heavy Nasdaq.

Wall Street’s major indexes pared early losses in morning trading but reversed course to fall further as European markets closed. Italian bond yields jumped after the European Commission deemed the country’s 2019 budget draft to be in breach of EU rules.

U.S. stocks declined further after U.S. Treasury Secretary Steven Mnuchin pulled out of an investor conference in Saudi Arabia as the White House awaited the outcome of investigations into the disappearance of Saudi journalist Jamal Khashoggi.

“It’s a function of a lot of things coalescing into a concern,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Pittsburgh. “The market continues to struggle in the aftermath of the bigger drawdown a week ago.”

Mnuchin’s decision sparked worries of potential strain in U.S.-Saudi relations, especially if Saudi leaders were found to have been involved in Khashoggi’s disappearance. Investors raised concern that if Saudi Arabia were sanctioned, it could restrict oil supply, prompting a rise in energy prices.

Shares of military contractors such as Lockheed Martin Corp. and Raytheon Co. also fell on concerns that U.S. lawmakers may block arms deals with Saudi Arabia.

U.S. stocks had opened lower as weak earnings reports from companies such as Cessna business jet maker Textron Inc. and equipment rental company United Rentals Inc. raised concerns about the impact of tariffs, climbing borrowing costs and rising wages on corporate profits.

Textron shares fell 10.8 percent and United Rentals shares sank 14.7 percent, while Sealed Air Corp. shares slid 8.7 percent after the packaging company cut its full-year profit outlook because of higher raw material and freight costs.

Worries about rising interest rates following Wednesday’s release of the Federal Open Market Committee’s minutes from its September meeting also pressured U.S. stocks.

“The market is coming to grips with the reality that the Fed may make financial conditions a little tighter than they originally thought,” said Paul Zemsky, chief investment officer of multi-asset strategies and solutions at Voya Investment Management in New York.

The Dow Jones industrial average fell 417.17 points, or 1.62 percent, to 25,289.51; the S&P 500 lost 47.59 points, or 1.69 percent, to 2,761.62; and the Nasdaq composite dropped 168.31 points, or 2.2 percent, to 7,474.39.

Among the few bright spots was Philip Morris International Inc., which rose 3.4 percent after the Marlboro cigarette maker topped analysts’ estimates for quarterly profit and sales.

Declining issues outnumbered advancing ones on the NYSE by a

3.72-to-1 ratio; on Nasdaq, a 3.43-to-1 ratio favored decliners.
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Several major Russian companies are exploring ways to do deals abroad without using dollars, spurred on by a U.S. threat to broaden sanctions that have impeded access of some Russian firms to the international banking system.

The Kremlin has been pushing companies to conduct more deals using other currencies to reduce reliance on the dollar.

Russian Alrosa, the world’s biggest producer of rough diamonds in carat terms, said it had completed a pilot deal with a Chinese client using yuan in the summer and another non-dollar transaction with an Indian client.

Other companies working on similar transactions include energy firm Surgutneftegaz, agricultural company Rusagro and miner Norilsk Nickel.

Russia’s central bank said this week the amount of non-dollar dealings was growing, with the share of rouble settlements in the Russia-China and Russia-India goods trade now between 10 and 20 percent.

The share was higher in the service industry, it added.

But there are limits to how much business can be shifted.

Major companies still rely heavily on dollar deals and most of Russia’s foreign earnings come from oil sales priced in dollars.

In addition, foreign banks with major U.S. activities may still be wary of business with any entity under U.S. sanctions even if transactions are not in dollars, bankers say.

The United States and its allies imposed sanctions on Russia in 2014 over Moscow’s annexation of Crimea. Washington said in August more measures could follow, after accusing Moscow of using a nerve agent against a former Russian agent and his daughter in Britain.

The new steps, which could be announced in November, may target dollar dealings, U.S. lawmakers have said.

Speed helps

One challenge facing companies dealing in the rouble is the Russian currency’s volatility. Between April 6 and 11, after Washington imposed sanctions on Russian billionaire Oleg Deripaska and some of his companies, the rouble lost almost 13 percent of its value against the dollar.

Alrosa said it avoided the fluctuation risk by completing the Chinese deal in a day. U.S. dollar deals tend to take longer due to associated compliance checks required.

“An increase in the speed of operations is an advantage in such an operation,” the company said in an emailed statement.

Alrosa did not give a value for its China and India deals but said the Chinese buyer had bought a lot at its auction of diamonds of 10.8 carats or larger in Hong Kong. Alrosa data indicates that its lots are on average worth about $100,000.

Alrosa said the banker for its Chinese deal was Shanghai office of VTB, Russia’s second-largest bank. An industry source, asking not to be named, said Russia’s biggest bank lender Sberbank worked on the Indian deal.

VTB and Sberbank declined to comment.

The Chinese client settled its purchase in yuan, which VTB converted into roubles and transferred to Alrosa.

“We carried out the transaction itself in one day, in several hours,” Alrosa said, adding that on this occasion the currency move was in the client’s favor.

No currency hedging was required because of the speed of the deal, the company said, but the client had to open an account in VTB’s branch in Shanghai to complete the transaction.

Alrosa said it was also considering settlement for future deals in Hong Kong dollars, adding that other Chinese clients had shown interest in non-dollar transactions.

Non-dollar limits

But there are limits on how much of Alrosa’s business can switch to other currencies. China accounts for just 4 percent of its sales, while India accounts for 17 percent.

Among initiatives by other Russian firms, Surgutneftegaz has been pushing buyers to agree to pay for oil in euros instead of dollars, Reuters reported in September.

Russian farming conglomerate Rusagro told Reuters that some of its trading operations were in yuan and said this would increase with the expansion of business with China.

Russian nickel and palladium producer Norilsk Nickel said it was discussing the option of rouble payments with foreign customers which have rouble revenue, although it said it had not secured deals under those terms.
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Hundreds of taxis on Thursday drove at a snail’s pace across the Polish capital Warsaw in protest at the ride-sharing app Uber and other unlicenced competitors.

Other cab drivers gathered in front of the justice ministry to call for legislation to regulate the industry.

Traditional cab operators argue that the Uber app and others like it represent unfair competition because their drivers can dodge the rules and restrictions that regulate professionals.

“There are 12,500 legal taxis in Warsaw and around 8,000 to 9,000 unregistered working for Uber, Taxify and a couple dozen other similar app-based operators,” said Jaroslaw Iglikowski, head of the Warsaw Taxi Drivers union.

“The app-based operators are taking around 30-35 percent of our overall business and up to 70 percent of night-time fares, especially on weekends,” he told AFP.

The protesting cab drivers claim in a petition they gave the justice minister that the country is losing more than 700 million zloty (160 million euros, $190 million) annually in unpaid taxes because of Uber and others like it.

The taxis dispersed in the early afternoon before rush hour, as the drivers had promised they would not cause traffic problems for city residents.

Uber has become one of Silicon Valley’s biggest venture-funded startups and has expanded its ride-sharing services to dozens of countries.

It does not employ drivers or own vehicles, but instead relies on private contractors using their own cars, allowing them to run their own business.

The app claims it is a service provider, connecting passengers with these freelance drivers directly and cheaply.

But critics and competitors around the globe say this allows it to flout costly regulations such as stringent licensing requirements for taxi drivers, who undergo hundreds of hours of training.

 
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U.S. Treasury Secretary Steve Mnuchin has pulled out of an investment conference next week in Saudi Arabia, as Riyadh continues to face questions about its involvement in the disappearance and alleged killing of a U.S.-based Saudi journalist in Turkey.

Mnuchin made the announcement Thursday on Twitter, following numerous Western corporate chiefs who have dropped out of the three-day gathering that starts Tuesday in Riyadh.

As reports from Turkey have mounted alleging Saudi agents tortured, killed and dismembered Jamal Khashoggi two weeks ago inside Riyadh’s consulate in Istanbul, the chief executives announced they will not be attending the Future Investment Initiative conference.

Saudi Arabia has denied killing Khashoggi, a critic of the country’s de facto leader, Crown Prince Mohammed bin Salman.

Khashoggi wrote about Saudi Arabia in columns for The Washington Post.

Saudi Arabia says it says it will disclose the results of its investigation into his disappearance.

The investment conference is being organized by Saudi Arabia’s mammoth sovereign wealth fund and was being billed as a showcase for economic reforms advanced by Salman as he attempts to diversify the kingdom’s economy, for decades focused on its role as the world’s leading oil exporter.

The gathering had been dubbed “Davos in the Desert,” after the annual meeting of world economic leaders in Switzerland.

International Monetary Fund managing director Christine Lagarde said she is skipping the conference. JP Morgan chief executive Jamie Dimon and the heads of two top U.S. investment firms — BlackRock and Blackstone — have dropped out of the gathering. Top executives at the Ford auto manufacturing company and the MasterCard credit company have said the won’t be going, while the Google internet search engine company said that the head of its cloud computing business also would not be at the event.

The chiefs of European bankers BNP Paribas, Credit Suisse, HSBC, Standard Chartered and Societe Generale also rescinded acceptances to the conference.

 
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