Financial Sorcery

What has been happening in Sri Lanka?  Sri Lanka has declared a state of emergency after the crisis-hit nation's president fled to the Maldives, with protesters also demanding the prime minister quit. What led to the economic crisis? Sri Lanka's vital tourism sector was first hammered by extremist bomb attacks on churches and hotels    in 2019 and again the next year by the coronavirus pandemic. Its coffers were further depleted by government tax cuts, and Sri Lanka ran out of foreign currency needed to import everything from medicines to food and fuel. However, many experts blame President Rajapaksa's poor economic mismanagement. What went wrong? The country owes more than $51 billion to foreign lenders, its foreign debt pile and has been in bailout talks for months with the International Monetary Fund. The United Nations had warned that Sri Lanka is facing a dire humanitarian crisis, with millions already in need of aid. What happens when a country runs out of money? Mo...

As of Tuesday morning, one Euro is exactly equal to one dollar. Euro is at its weakest against the dollar since the winter of 2002, twenty years ago.  The euro has been significantly weakened due to two major reasons The first is Europe’s energy crisis due to the war in Ukraine. Russia supplied nearly 40 per cent of Europe’s gas before the war with Ukraine. Europe attempted to source fuel from other countries bypassing sanctions and partial bans against Russian gas and fuel in the EU. In retaliation, Russia has cut back supplies of fuel to European countries that depend on it. The Nord Stream pipeline, which links Russia to Germany, was shut down. In addition to the fuel crisis, inflation has also contributed to the euro’s drop in value. The European Central Bank (ECB) has stated that it will increase interest rates for the first time since 2011. In Addition to this, The US Federal Reserve increased interest rates by 75 points and is expected to raise them even further, causing inv...

China recorded   its weakest growth rate   in more than two years after months of harsh Covid lockdowns wreaked havoc across the country. What’s happened? Gross domestic product in the world's second-largest economy expanded by just 0.4% in the three months to June 30. It was the weakest performance since the first quarter of 2020 when China's economy came to a near standstill as it battled to contain the initial coronavirus outbreak that started in Wuhan. In that quarter, GDP contracted 6.8%. For the first half of this year, the economy expanded 2.5%, way below the 5.5% annual target set by the government. compared with the same period last year, according to the National Bureau of Statistics (NBS) on Friday. What caused the economic slowdown? Shanghai, which contains the world's busiest port, was shut down in late March. Economists and business groups say China's trading partners will feel the impact of shipping disruptions over the following months. The slowdown redu...