BBC News - Argentina defaults for second time

Argentina has defaulted on its debt - for the second time in 13 years - after last-minute talks in New York with a group of bond-holders ended in failure.

So-called "vulture fund" investors were demanding a full pay-out of $1.3bn (£766m) on bonds they hold.

Argentina has said it cannot afford to do so, and has accused them of using its debt problems to make a big profit.

A US judge had set a deadline of 04:00 GMT on Thursday for a deal. The crisis stems from Argentina's 2001 default.

Late on Wednesday evening, Argentina's Economy Minister Axel Kicillof said the investors had rejected the government's latest offer.

"Unfortunately, no agreement was reached and the Republic of Argentina will imminently be in default," Daniel Pollack, the court-appointed mediator in the case, said in a statement on Wednesday evening.

The fresh default is not expected to affect Argentina's economy in the same way it did in 2001, when dozens were killed in street protests and the authorities froze savers' accounts to halt a run on the banks.

"The full consequences of default are not predictable, but they certainly are not positive," Mr Pollack said.

Speaking at a news conference in New York, Mr Kicillof said Argentina would not do anything illegal.

Bond reaction

The investors, also known as "hold-outs", are US hedge funds that bought debt cheaply after Argentina's economic crisis.

They never agreed to the restructuring accepted by the majority of bond-holders.

President Cristina Fernandez de Kirchner has described as vultures the minority bond-holders - including Aurelius Capital Management and NML Capital.

She accuses them of taking advantage of Argentina's debt problems to make large profits.

Ratings agency Standard & Poor's (S&P) downgraded the country to "default" earlier on Wednesday, although the price of the bonds did not react.

S&P noted that it could revise the rating if Argentina were to find some way to make the payments.

The hedge funds are demanding Argentina make interest payments on debt which it defaulted on in 2001, even though it was bought at less than face value.

Supporters of President Cristina Fernandez de Kirchner protest against hedge funds in Buenos Aires

The US courts have blocked payments to other bondholders who agreed a separate deal with Argentina, until agreement with the "hold-outs" is reached.

Mr Kicillof said he planned to return to Argentina after the news conference, saying the country would do what is needed to deal with what he called an unfair situation.

He reiterated that Argentina could not pay the hedge funds without triggering a clause that would force it to renegotiate with bondholders who accepted new debt agreements.

Reuters News - IMF warns of potential risks to global growth

(Reuters) - Sharply higher interest rates around the world could combine with weaker growth in emerging markets to slice as much as 2 percentage points off global growth in the next five years, the International Monetary Fund said on Tuesday.

In a report assessing how individual national policies could interact to undermine the world economy, the IMF also warned the conflict between Russia and Ukraine could reverberate to the rest of the region if sanctions against Russia escalate, hittingnatural gas supplies to Europe and weakening European banks.

The resulting impact could prompt further gyrations in financial markets, in contrast to the recent period of market calm, the IMF said in its 'spillovers' report.

In its worst-case scenario, the IMF said the United States and United Kingdom could tighten monetary policy sooner than expected, leading to higher borrowing costs worldwide, even as key emerging market growth slows a further 0.5 percentage point over the next three years.

The two developments would reinforce each other, prompting slower growth and hurting in particular those emerging markets with large economic imbalances, such as Argentina, Brazil, Russia and Turkey.

As in past reports, the IMF said monetary tightening in rich nations would have limited negative impact on the rest of the world if it was well-communicated and prompted by better growth prospects. The impact could also be muted if higher U.S. and UK rates come as the euro zone and Japan continue monetary easing, though this "asynchronous" tightening could cause more global exchange rate volatility.

Central banks in the United States, Japan, the euro zone and Britain sharply lowered rates to boost growth in the wake of the global financial crisis, but Britain and the United States are now preparing to reverse course.

The IMF said the more sluggish expansion in the developing world, long the engine of the global recovery, was increasingly likely due to structural, not cyclical, factors.

The IMF has downgraded growth projections for emerging markets by a cumulative 2 percentage points over the last four years. It now expects their annual growth to slow to a 5 percent rate over the next five years, from an average of 7 percent growth from 2003 to 2008.

"Given the significant and rising contribution of (emerging markets) to the global economyover the past few decades, their recent slowdown could have far-reaching implications," the IMF said.

Emerging markets affect the rest of the world largely through trade and financial channels; a 1 percentage point slowdown in emerging markets leads to a quarter of a percentage point loss in advanced economies, the IMF said.

But a slowdown in key emerging markets, especially Brazil, Russia, China and Venezuela, would also have a big impact on their immediate regions through avenues like oil prices and remittances.

Austrian, French, Italian and Swedish banks are particularly exposed to turmoil in Russia, in addition to holders of foreign bonds and underwriters for credit default swaps, which are affected when credit quality worsens.

BBC News - Bankers 'must swear oath' after scandals, says report

An oath for bankers should be introduced to raise accountability and standards in banking, said the think tank ResPublica.

An oath would prioritise the needs of bankers' customers

It said the lack of public trust in banking after numerous scandals was an "ongoing concern" for the industry and the government.

In a new report, ResPublica called for an oath for bankers to "fulfil their proper moral and economic purpose".

Small businesses should also be treated as consumers, said the report.

'Road to absolution'

The think tank said this could ensure banks treated struggling firms fairly.

Director at ResPublica, Philip Blond, said: "As countless scandals demonstrate, virtue is distinctly absent from our banking institutions.

"Britain's bankers lack a sense of ethos and the institutions they work for lack a clearly defined social purpose."

He said an oath would "finally place bankers on the road to absolution".

The think tank said the British Bankers' Association, Building Societies Association and the new Banking Standards Review Council should adopt the oath for their members.

An extract from the oath says: "I will do my utmost to behave in a manner that prioritises the needs of customers.

"It is my first duty to provide an exemplary quality of service to my customers and to exhibit a duty of care above and beyond what is required by law."

'Part of answer'

Another part adds: "I will confront profligacy and impropriety wherever I encounter it, for the conduct of bankers can have dramatic consequence for society."

BBA executive director for financial policy and operations, Paul Chisnall, said: "Restoring trust and confidence is the banking industry's number one priority.

"But meaningful cultural change in an industry as complex and diverse as banking takes time."

He said a banking oath "very well could be part of the answer".

ResPublica also said bank shareholders should have more responsibility to make sure banks are held to account.

Its full report, Virtuous Banking: Placing ethos and purpose at the heart of banking, will be launched on Tuesday by the chairman of the Banking Standards Review Council, Sir Richard Lambert

Bloomberg News - Australian Regulators Watch as Debt Drives Up Prices: Mortgages

Photographer: Ian Waldie/Bloomberg

Today’s report showed new dwelling purchases climbed 1.6 percent.

Central banks from Scandinavia to the U.K. to New Zealand are sounding the alarm about soaring mortgage debt and trying to curb risky lending. In Australia, where borrowing is surging, regulators are just watching.

Australian household debt is at a 25-year high, according to statistics bureau figures, and a government inquiry this month found housing to be a significant source of risk to the financial system. The average mortgage is at least four times household income in almost 80 percent of the country, research by Digital Finance Analytics shows.

While the U.K., Denmark and New Zealand introduce measures including loan limits, caps on interest-only mortgages and repayment tests, the Reserve Bank of Australia and the country’s banking regulator are holding their fire, saying risky loans haven’t increased significantly. The central bank also has said the price gains so far are spurring needed construction, easing housing shortages in some areas.

“If we think there is a need for higher construction, which we do, an environment of declining prices is probably not conducive to that outcome,” RBA Governor Glenn Stevens said in a speech in Hobart on July 3. “Some pick-up in housing prices as a result of lower interest rates was to be expected.”

Overvalued Housing

Australia has the third-most overvalued housing market on a price-to-income basis, after Belgium and Canada, according to the International Monetary Fund. The average home price in the nation’s eight major cities rose 16 percent as of June 30 from a May 2012 trough, the RP Data-Rismark Home Value Index showed.

In Sydney, the most populous city, where price growth has been strongest, values soared 15 percent over the past 12 months. That compares with a 5.4 percent increase in New York City in April from a year earlier and a 26 percent jump in London prices in June quarter from a year ago.

“There’s definitely room for caps on lending,” said Martin North, Sydney-based principal at researcher Digital Finance Analytics. “Global house price indices are all showing Australia is close to the top, and the RBA has been too myopic in adjusting to what’s been going on in the housing market.”

Australian regulators are hesitant to impose nation-wide rules as only some markets have seen strong price growth, said Kieran Davies, chief economist at Barclays Plc in Sydney.

Home values in cities including Adelaide, Hobart and Canberra rose less than 3 percent over the year to June 30, and house prices in areas outside the major cities gained less than 4 percent in the 12 months to May, according to RP Data.

The central bank has reduced its benchmark interest rate to a record-low 2.5 percent to aid a recovery in non-mining industries, including residential construction, as the nation’s resources boom slows.

The interest rate cuts and subsequent home price gains have helped building approvals climb 14 percent in May from a year earlier, according to the Australian Bureau of Statistics.

Necessary Evil

“The RBA’s probably got at the back of its mind that we’re only in the early stages of the adjustment in the mining sector,” Davies said. “Mining investment still has a long way to fall, and also the job losses to flow from that. So to some extent, the house price growth is a necessary evil.”

The central bank in its quarterly monetary policy update called declining resources investment a “significant headwind,” for the economy.

As prices climb, the value of new mortgages also rose 16 percent in May from a year ago, and overall housing credit increased 6 percent in the quarter ended March 31 from 12 months earlier, statistics bureau data show. The average new home loan grew 6.7 percent to A$433,960 in June from a year ago, according to broker Australian Finance Group, which processes about A$4 billion in home loans every month.

The increase in new mortgages, while significant, doesn’t appear “imprudent,” Stevens said in his speech in Hobart. With total credit growth only slightly above the increase in incomes, “it’s hard to mount the soap box to complain about that pace,” he said.

Low Rates

Spurring the rise in loans are the lowest mortgage rates in almost five years, after the RBA cut the cash rate by 2.25 percentage points since late 2011. The average rate on variable mortgages, which about 85 percent of Australians borrowers are on, is 5.95 percent, the lowest since September 2009.

Fixed rates are also on their way down. Commonwealth Bank of Australia, National Australia Bank Ltd. and Westpac Banking Corp. last week cut their five-year fixed rates to 4.99 percent, a record low for CBA, the least in 20 years for NAB, and a five-year low for Westpac. Australia and New Zealand Banking Group Ltd. cut its five-year fixed rate by 30 basis points to 5.49 percent.

Rising Debt

Stevens this month urged investors in Sydney to be cautious, after loans to buy rental properties in the city’s home state, New South Wales, surged 30 percent to a record A$5.2 billion in May from a year ago, doubling from February 2013, according to statistics bureau data. He also warned that loans to investors covering more than 80 percent of a property’s value have been climbing.

Australians owed almost 1.8 times their 2013 pretax disposable incomes, higher than Canada, France, Germany, Italy, Japan, U.K. and the U.S., the statistics bureau said in a report last month. Household debt was equivalent to A$79,000 per person at the end of 2013, and has risen at almost double the pace of assets over the past 25 years, it said.

Government Inquiry

Since 1997, when Australia held its last major financial system inquiry, household debt has almost doubled as a proportion of income, with more than 90 percent of that due to housing, the government inquiry found. Mortgages make up two-thirds of banks’ loan books, from 47 percent in 1997, it said.

“A large enough disruption to the housing market could have significant implications for household balance sheets, financial stability, economic growth, and the speed of recovery in household spending and broader economic activity following a shock,” the inquiry’s report said.

New Zealand’s central bank last year required loans for more than 80 percent of a property’s value to account for less than 10 percent of a bank’s new lending. In response, home sales fell 11 percent between October and March, the bank said in May.

Global Measures

The Bank of England last month proposed capping mortgages of 4.5 times a borrower’s income at no more than 15 percent of a lender’s new home loans, and required banks to reject those who fail a new repayment test. Governor Mark Carney in May called surging home prices the No. 1 risk to the economy, and Deputy Governor Jon Cunliffe this month warned low borrowing costs hide the real extent of Britons’ mortgage burden.

Denmark’s central bank is pushing to require interest-only loans to be no more than 60 percent of a property’s value, from 80 percent. In Sweden, lenders are in talks to require borrowers to cut mortgage debt to less than 70 percent of home values, and have capped borrowing at five times household income.

Across Australia, the average mortgage is at least four times pretax annual income in more than 2,200 postal codes out of a total 2,800, according to Digital Finance Analytics. Loan-to-income ratios are spread between 2.5 times and 8 times, compared with 0 and 6 times in the U.K., the data show.

“So the loan-to-income ratio in Australia is more stretched than in the U.K.,” DFA’s North said.

The RBA, in response to an e-mailed request for comment, referred to speeches and papers by Head of Financial Stability Luci Ellis.

‘Some Skepticism’

“The RBA has expressed some skepticism and is unlikely” to introduce measures similar to other countries in the near term, Glenn Levine and Fred Gibson, economists at Moody’s Analytics, a unit of Moody’s Investors Service, wrote in a report last week. “Instead, a microprudential approach is preferred whereby the Australian Prudential Regulatory Authority engages in closed-door discussions with individual banks to address risks through bespoke rules such as interest-rate buffers.”

APRA, which oversees banks, in May issued draft guidelines urging lenders to conduct mortgage book stress tests, ensure brokers’ compensation doesn’t encourage risky lending and ascertain borrowers can repay loans, especially when rates rise.

“APRA is seeing increasing evidence of lending with higher risk characteristics and it does not want this trend to continue,” the regulator’s former chairman, John Laker, said in a statement then.

Requests to large lenders’ boards for explanations on how they’re monitoring risk have already led to more prudent standards, APRA Chairman Wayne Byres told a parliamentary hearing on July 18. Andrew McCutcheon, a spokesman for APRA, declined to comment further.

Shifting Stance

While regulators haven’t yet introduced firm lending controls, their resistance to such measures has softened. The RBA’s Ellis in October 2012 said she didn’t see a need for “elaborate” rules, and “a culture of cooperation, dialog and mutual respect” is more important than formal arrangements. In contrast, Stevens said after his speech in Hobart that the RBA is “quite happy” for limits on lending and capital requirements on banks to be imposed where they make sense.

The RBA and APRA have acknowledged potential benefits of loan limits “but at this stage they don’t believe that this type of policy action is necessary,” said David Ellis, a Sydney-based analyst at Morningstar Inc. “If the housing market was out of control and if loan growth, particularly investor credit, grew exponentially then it’d be introduced.”

To contact the reporter on this story: Nichola Saminather in Sydney atnsaminather1@bloomberg.net

BBC News - SA to fast-track bill to block land sales to foreigners

The South African government has announced plans to fast-track a bill barring foreigners from buying land.

The weaker rand has helped make cities like Johannesburg attractive to overseas buyers

The Regulations of Land Holdings Bill would mean foreigners will only be able to lease land for 30 years.

However it will not allow for the expropriation of land currently owned by people from outside the nation. An estimated 7% of land in South Africa is owned by foreigners.

The government hopes that the bill will become law within five years.

Popular property choice

The weaker rand and lenient property laws make the country, which prides itself as the most developed economy in Africa, a top choice for property buyers from abroad.

But now the government is looking to put a stop to that trend.

Minister of Rural Development and Land Reform, Gugile Nkwinti, announced that within the next five years, purchase of new land would be restricted to locals only under the new bill.

The department said the bill would be submitted to parliament in November, and could come into law in 2019.

Mr Nkwinti assured existing foreign landowners that the bill would not mean the annexing of their current properties, saying that applying the law retrospectively would be unconstitutional.

"We cannot act in an arbitrary manner," he said.

Who is foreign?

Mr Nkwinti said the government would use the legal definitions currently applied by the Department of Home Affairs to determine who was a foreigner.

"We don't have to reinvent the wheel, we will just use the definition of what a foreign national is in the country," he said.

The ruling ANC government has been criticised over its two decade rule for not fully addressing the issues of land reform.

Critics believe the current system of willing buyer, willing seller is not enough to reconsolidate centuries of unequal land ownership.

The situation was made worse by the 1913 Land Act, which restricted ownership by the black population, who made up 67% of the population, to only 7% of the land.

Extreme government critics, such as the newly formed Economic Freedom Fighters - who hold 10% of seats in parliament - have called for expropriation of land without compensation.

Bloomberg News - World’s Biggest Wealth Fund Reviews $8 Billion Russian Stake

Photographer: Remko De Waal/AFP via Getty Images

A convoy of hearses carrying coffins containing the remains of victims of the downed Malaysia Airlines flight MH17, drives from the Eindhoven Airbase to Hilversum on July 23, 2014.

Norway’s $890 billion sovereign wealth fund, the world’s biggest, is reassessing its holdings in Russia as the European Union considers expanding sanctions against the country.

Since the July 17 downing of Malaysia Airlines flight MH17 by a missile that the U.S. says was probably supplied by the Russian military, sentiment toward assets based in Russia has soured further. The government of Norway, which isn’t an EU member, said it’s ready to adjust the fund’s holdings to reflect the changing geopolitical climate. The European Commission will present proposals for more “targeted measures” to national officials today.

“If the oil fund’s investments become affected by economic sanctions against Russia that Norway supports,” the fund “will need to make the necessary adjustments to accommodate the new situation,” Runar Malkenes, a Finance Ministry spokesman, said in an e-mailed response to questions.

The fund is monitoring the situation in Russia, spokeswoman Marthe Skaar said. The investor has “significant” holdings there, Chief Executive Officer Yngve Slyngstad said in April. It held about $3.6 billion in stocks and $4 billion in corporate and government bonds in Russia at the end of 2013, its annual report shows. Skaar declined to say whether the fund has already started to scale back that stake.

Russian ‘Threat’

“Russia seems to be a threat to foreign investment,” said Hans Olav Syversen, the head of Norway’s parliament finance committee, which oversees the fund.

While it’s a member of the EU-affiliated European Economic Area, Norway isn’t obliged to comply with EU sanctions, according to the government in Oslo.

“It’s important that the restrictive measures we support have the broadest possible base,” Frode Andersen, a spokesman at the Foreign Ministry, said by phone. “We therefore will carefully consider new restrictive measures from the EU and consult the parliament as necessary.”

The EU said July 22 it will consider restricting Russia’s access to capital markets and sensitive technologies unless PresidentVladimir Putinexpedites the investigation of the downing of the Malaysia Air flight over eastern Ukraine.

Russian Losses

Europe’s biggest equity investor, into which Norway channels its oil and gas wealth, already saw first quarter results suffer as the escalating conflict between Russia and Ukraine eroded returns.

The fund lost 9.7 percent on its investments in Russian government bonds in the first three months. Its total return for the quarter was 1.7 percent, or 78 billion kroner ($13 billion), it said in April.

The wealth fund has 65 investments in Russia. Its largest holding is a 4.6 percent stake in VTB Bank OJSC worth $888 million, according to its 2013 annual report. It also owns 0.5 percent of Gazprom OAO.

As of the end of last year, it held $3.98 billion of Russian government debt and bonds in AK Transneft OAO, Lukoil International Finance BV and Rosneft Finance SA.

The U.S. is pushing Europe to toughen its stance on Putin. Any European move on capital markets would follow a U.S. decision last week to prevent some Russian companies from accessing U.S. equity or debt markets for new financing with a maturity beyond 90 days.

U.S. Sanctions

The U.S. last week imposed sanctions on selected Russian banks, military, and energy companies, including OAO Rosneft, the country’s largest oil company. Norway’s wealth fund owned a 0.6 percent share of Rosneft at the end of last year, according to its annual report.

“We observe that there’s a different risk profile,” Slyngstad said in April after Standard & Poor’s cut Russia’s credit rating to BBB-, one step above junk. “We are at any given time also considering conditions that have dimensions of geopolitics and geopolitical risk.”

Syversen of the parliament finance committee said he’s not planning to pressure the government to take action regarding its interests in Russia. “I take for granted that the oil fund will continuously assess the risk of investments,” he said.

The benchmark Russian Micex index has lost about 7 percent this year, while the ruble has depreciated some 6.4 percent against the dollar over the same period. The wealth fund is due to report second-quarter results on Aug. 20.

There may be a case for the fund to cling on to its Russian investments if it’s legally able to do so.

“There’s obviously a great risk connected to any investment in Russia at the moment,” said Erik Bruce, senior economist at Nordea Bank AB, Scandinavia’s largest lender. “With as diverse investments as the oil fund has, you have to take into account that sometimes you have political risk and the thing to do is to keep the investment.”

To contact the reporter on this story: Saleha Mohsin in Oslo at smohsin2@bloomberg.net

Reuters News - U.S. judge orders Argentina, creditors to meet until deal reached

(Reuters) - A U.S. judge ordered Argentina and investors who did not participate in the country's past debt restructurings to meet "continuously" with a court-appointed mediator until a settlement is reached, warning of the threat of a new default.

U.S. District Judge Thomas Griesa in New York told Argentina and lawyers for investors who declined to restructure their bonds after the country defaulted on about $100 billion in 2002 that time was running out to reach a deal and avert a fresh default.

"That is about the worst thing I can envision. I don't want that to happen," the judge said.

Jonathan Blackman, a lawyer for Argentina, Latin America's No. 3 economy, said even with around-the-clock talks, it would be "unlikely, if not impossible, to result in settlement."

"It simply can't be done by the end of the month," he said.

Griesa ordered the parties to meet with Daniel Pollack, a New York lawyer appointed to oversee settlement talks, "continuously until a settlement is reached." Pollack scheduled a meeting Wednesday at 10 a.m. EDT (1400 GMT).

Pollack, who was appointed June 23 as a mediator, has been holding meetings with the parties, publicly acknowledging talking twice with Argentine officials.

Argentina is sending a delegation to meet with Pollack, but a government source saidEconomy Minister Axel Kicillof would not be among the group.

The presidency of Argentina said in a statement that "Judge Griesa ... resolved absolutely nothing on any of the issues which had been brought before him." A lead holdout creditor, Elliott Management's NML Capital Ltd, said in a statement it was prepared to meet with Pollack to resolve the dispute.

"We are confident this matter could be resolved quickly if Argentina would join us in settlement discussions," NML said.

Argentine over-the-counter dollar-denominated bonds slid following the hearing, before recovering some of the losses. The bid price on the Discount bond was down 1.1 percent on a day earlier at $86.65 at 1725 local time (2025 GMT) while the Par bond was 0.8 percent lower at $50.80.

"Clearly Argentina is running out of time," said Ignacio Labaqui, an analyst for consultancy Medley Global Advisors. "Today is the first time I have seen the market believing that Argentina might default. It's up to Argentina to decide what it will do."

Argentina has been pushed to the brink of a fresh debt default by U.S. court decisions that it pay $1.33 billion plus interest to bondholders who did not participate in debt swaps in 2005 and 2010. The holdouts are led by NML and Aurelius Capital Management.

The country argues paying the holdouts would open it up to as much as $15 billion in claims from other investors and further strain its financial condition.

At Tuesday's hearing, Argentina renewed its request that the judge stay enforcement of his orders. Griesa said the step was not necessary, as there are "ways to do something to avoid default."

A lawyer for Aurelius, Edward Friedman, meanwhile urged him to reconsider part of a decision last month allowing Citigroup Inc to process payments Argentina made for bonds governed by the country's local laws. Friedman said payments should not be allowed on U.S. dollar-denominated bonds.

Bank of New York Mellon Corp asked the judge to allow it to hold onto $539 million Argentina deposited last month for a payment to the restructured bondholders. Griesa previously ordered the sum returned, saying it violated his orders.

Griesa on Tuesday issued no ruling on the Citigroup issue, and told BNY Mellon and the holdouts to see if they could reach an agreement.

New York financial trial lawyer Daniel Pollack exits the U.S. District Court for the Southern District of New York in Lower Manhattan, June 27, 2014

BBC News - China's President Xi Jinping signs Venezuela oil deal

Chinese President Xi Jinping shakes the hand of Venezuelan President Nicolas Maduro

Chinese President Xi Jinping has signed a series of oil and mineral deals with Venezuela.

They include a $4bn (£2.34bn) credit line in return for Venezuelan crude and other products.

The agreements came on the latest stop of a four-country visit to Latin America.

Mr Xi has already signed key deals in Argentina and Brazil. He has now departed from Venezuela and will visit Cuba next.

In Argentina the Chinese leader agreed to an $11bn currency swap providing much needed money for the government of President Cristina Fernandez de Kirchner.

Argentina has been locked out of the international capital markets since a default in 2001.

Mr Xi also helped launch a new development bank alongside the other emerging powers of the Brics group - Brazil, Russia, India and South Africa - at a summit in Brazil.

The new bank is intended to create an alternative to the Western-dominated World Bank.

Chinese trade with Latin America has grown rapidly. It is now the second-largest trading partner in Argentina and Cuba, and has been Brazil's largest since 2009.

China is the second-largest market for Venezuelan oil after the United States.

Analysts say the underlying purpose of the visit has been to secure more natural resources from Latin American countries to fuel China's long term economic expansion.

The Chinese president is now on his way to Cuba where he will meet President Raul Castro.

The Communist-led island and China are long-term close political allies and China has given Cuba generous trade credits in the past.

Reuters News - China signs currency swap worth 150 billion yuan with Switzerland

(Reuters) - China's central bank said on Monday it has signed a bilateral currency swap agreement worth 150 billion yuan ($24.17 billion) with the Swiss central bank.

The three-year swap will "provide liquidity support for bilateral economic and trade exchanges and help maintain financial stability," the People's Bank of China said in a statement on its website, www.pbc.cn.

The swap deal will provide liquidity support for the further development of the onshoreyuan market in Switzerland and will be extended if needed, it said.

(Reporting by China economics team; Editing by Jacqueline Wong)