Aid for Trade by International organizations

Presented by
A.RAJASEKHAR 1226211201(IBF)

Topics discussed ERBD extends Trade finance aid to VTB Kazakhstan The Financial crisis and Trade Finance EU’s Aid for Trade in developing countries Trade Finance in Latin America and the Caribbean Euro zone debt crisis poses serious threat to emerging markets  ADB offers Trade Finance in Chinese Yuan and Indian Rupee .

With this VTB Kazakhstan will be able to support more importers and exporters in Kazakhstan and increase the volume of trade between Kazakhstan and other countries in the region. To enhance trade finance services and facilitate transactions with longer maturities of Kazakhstan’s exporters and importers.ERBD extends Trade finance aid to VTB Kazakhstan EBRD plans to offer $20 million trade finance guarantee facility to VTB Kazakhstan. .

This was not the case in developing countries. . bank-intermediated trade finance largely held up. even as it came under several sources of strain. Availability of trade finance was different in developed and developing countries during the crises. In Advanced and emerging economies.The Financial crisis and Trade Finance Post crisis(2009) the world experienced the largest drop in global trade volumes with world trade of goods falling by 23 percent . This is because of lack of trade finance.

So banks in developing countries became more risk-averse in light of the drastic reduction in global liquidity and a decline in the number of intermediary players. . the World Bank conducted a firm and Bank survey in 14 developing countries across five regions. In particular. Found that the global financial crisis constrained trade finance in developing countries for exporters and importers alike.In 2009 and 2010. the survey showed that small and medium firms (SMEs) were more affected than larger firms because of their weak capital bases and bargaining power.

Guatemala. and Uruguay. Brazil. Transactions commonly average $1. . supporting mainly agribusiness and infrastructure industries. Honduras. The most active banks are in Argentina.2 million for pre-export and import financing.IFC's Global Trade Finance Program (GTFP) in Latin America and the Caribbean IFC’s network in the region includes 58 issuing banks in 21 countries.

family-owned business in San Jose. Lost about 15 transactions each year because did not have relationships with banks in other parts of the world. gained access to a global network of international banks (representing approximately 70 percent of Costa Rica’s GDP). especially in Asia and India After joining the program . India . First transaction. which imported notebooks from an SME in Mumbai.Costa Rica-based Banco Improsa was at a distinct disadvantage.financed a small.

.6 billion in 2010. Aid for Trade in 2010 by maintaining the all-time high registered the year before and totaling some €10.EU’s Aid for Trade to developing countries The EU and its Member States is the largest provider of Aid for Trade in the world . Sub-Saharan Africa continues to be the main beneficiary of EU Aid for Trade.7 billion committed. making up 60% of global commitments. In 2008 and 2009 met their €2 billion target and reached €2.

. and demand for Yuan trade finance from a number of countries including Vietnam. euros and yen which supported more than $3. The ADB’s trade finance program until now operated only in dollars.  To support intraregional trade and combating dollar liquidity shortages.ADB offers Trade Finance in Chinese Yuan and Indian Rupee The Asian Development Bank(ADB) has decided to offer trade finance in Chinese Yuan and Indian Rupees.5 billion worth of transactions. The ADB had received demand for rupee trade finance from Bhutan and Nepal.

The gaps in trade finance are persistent in these challenging markets and seem to be growing because of the financial deleveraging that’s taking place.The program provided loans and guarantees to businesses through a network of 200 partner banks and are expanded by 40% in the first half of 2012. compared to the same period last year. and treating Trade Finance Basel III regulatory requirements is more difficult compared to Basel II But that effort threatens to raise the cost of trade finance . The requirement for banks to raise more capital.

. because exporters in developing countries rely on international banks to provide them with credit until they are paid. lowest quarterly volume since the third quarter of 2009 ($24. A decline in trade finance affects the trade in goods.4bn). But banks are becoming increasingly reluctant to provide such credit because of their growing aversion to risk against the backdrop of the euro zone crisis.Euro zone debt crisis poses serious threat to emerging markets The euro zone crisis poses a greater threat to developing economies than the 2008 financial crisis.8bn in the first quarter of 2012. Total global trade finance volume fell to $26.

This affected projects. not just infrastructure. Gulf States are unable to step up in a big way.8tn in assets over the next few years. are likely to sell off as much as $3. Chinese banks tend to work with Chinese companies or state-owned outlets. China and the rich Gulf States are not making up for lower financial flows from Europe.European banks. but mining and manufacturing . which provide almost 80% of commodity trade finance.

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