China will slowly move to target risks instead of GDP

2017 ◽  
Keyword(s):  
Central Bank ◽  
Financial Risks ◽  
Xi Jinping ◽  
Domestic Activity ◽  
Content Type ◽  
Producer Prices ◽  
Central Bank Governor ◽  
China’S Economy

Significance China's economy grew by 6.9% year-on-year in the April-June quarter of 2017, in line with the 6.5-7.0% target. Marked growth in exports drove GDP expansion and combined with higher producer prices and profitability to encourage domestic activity. At the Financial Work Conference on July 14-15, President Xi Jinping committed to tackling the financial risks. Impacts Above-target growth creates scope for more measures to reduce financial risks. Higher profitability, helped by rising factory-gate prices, should help to reduce the reliance on debt. China's central bank governor, an outspoken reformer, is expected to announce his retirement soon; his successor's role will be crucial.

Libya's economic track could undo political progress

2021 ◽  
Keyword(s):  
Central Bank ◽  
Trade Barriers ◽  
Content Type ◽  
Military Commander ◽  
Central Bank Governor ◽  
Business Ties

Significance Unifying the budget would in effect guarantee funding to eastern Libya for the year -- a prospect unpalatable to western Libyans who suffered from eastern military commander Khalifa Haftar’s assault on Tripoli in 2019-20. However, the dialogue is also essential to unify the country and begin rebuilding. Impacts Turkey is banking on the incoming government to enhance business ties. If a new central bank governor is more friendly to Egypt, or Cyrenaica, then Turkey could lose privileges and find new trade barriers. President Mohamed Mnefi will aim to grow his own constituency in Cyrenaica, opposing Haftar and Parliament Speaker Aguila Saleh.

Prospects for East Asia in the third quarter of 2015

2015 ◽  
Keyword(s):  
South China Sea ◽  
East Asia ◽  
South China ◽  
Political System ◽  
Prime Minister ◽  
The South China Sea ◽  
Xi Jinping ◽  
Content Type ◽  
The Third ◽  
China’S Economy

Subject Prospects for East Asia in the third quarter of 2015. Significance China's economy is still slowing, and President Xi Jinping is further tightening his hold over an increasingly illiberal political system, but few grave consequences are visible yet. In Japan, Prime Minister Shinzo Abe's leadership remains unchallenged. Tokyo's relations with Beijing and Seoul have warmed slightly, but tensions in the South China Sea have risen.

Party fractures will hinder Mozambique peace talks

2016 ◽  
Keyword(s):  
Central Bank ◽  
Humanitarian Aid ◽  
External Audit ◽  
Content Type ◽  
Local Resources ◽  
Legislative Changes ◽  
Central Bank Governor

Significance Talks stalled on August 22 when both sides rejected the mediators' peace proposal. Since then, government forces have overrun a RENAMO base in the central Morrumbala district. Impacts Drought in the three southern provinces could render 1.8 million people dependent on humanitarian aid. An influx of refugees into Zimbabwe will pressure local resources, exacerbating the already dire conditions there. The appointment of a former IMF official as central bank governor may help to smooth relations with multilateral creditors. Maputo will resist calls for an external audit of its 'secret' loans since this may reveal damaging details of the military's finances. Devolution of greater powers to provinces would involve complex legislative changes, which many FRELIMO lawmakers would oppose.

IMF unlikely to resolve Zambia's debt conundrum

2020 ◽  
Keyword(s):  
Private Sector ◽  
Central Bank ◽  
Global Markets ◽  
Debt Restructuring ◽  
Debt Sustainability ◽  
Content Type ◽  
Common Framework ◽  
Drying Up ◽  
To Come ◽  
Central Bank Governor

Significance While the G20's new Common Framework for Debt Treatments provides a new mechanism for debt restructuring, it also requires Zambia to convince the IMF that it has disclosed all of its obligations and has a path to debt sustainability -- something President Edgar Lungu and the ruling Patriotic Front (PF) are unwilling to do before next year’s elections. Impacts Zambia’s inability to borrow on global markets will hasten the kwacha's depreciation, which has dropped sharply against the dollar in 2020. With forex drying up, the new Lungu-aligned central bank governor is likely to come under more pressure to print kwachas before the polls. A protracted legal dispute with bondholders could make Zambia a poster child for Western campaigners demanding private-sector debt relief.

Politics will undermine Algerian economic policy

2016 ◽  
Keyword(s):  
Economic Policy ◽  
Central Bank ◽  
The Political ◽  
Economic Policies ◽  
Foreign Exchange Reserves ◽  
Content Type ◽  
Political Struggles ◽  
International Borrowing ◽  
The Government ◽  
Central Bank Governor

Subject The effect of the sacking of the central bank governor. Significance The Algerian cabinet decided on May 31 to replace the long-serving governor of the central bank, Mohammed Laksaci, with Mohammed Loukal, the CEO of the government-owned Exterior Bank of Algeria. The cabinet did not explain the decision, which was issued in the name of President Abdelaziz Bouteflika, but the governor had come under criticism from political figures because of the sharp depreciation of the Algerian dinar, and the erosion of foreign exchange reserves. Impacts Loukal will come under pressure to ease import controls, while defending the dinar. Given weak external accounts, further depreciation of the dinar on the black market is likely, along with further erosion of reserves. The government will soon need to resort to international borrowing, which will bring fresh scrutiny of its economic policies. The central bank governor sacking is most likely related to the political struggles within the establishment on who will succeed Bouteflika.

Philippines' Duterte could reshape courts and banks

2017 ◽  
Keyword(s):  
Political Economy ◽  
Central Bank ◽  
Interest Rates ◽  
Supreme Court ◽  
Legal System ◽  
The Philippines ◽  
Content Type ◽  
The Supreme Court ◽  
Legal Challenges ◽  
Central Bank Governor

Subject Bank and judiciary appointments in the Philippines. Significance This year, President Rodrigo Duterte has the chance to shape the future of the Philippine economy and legal system through his power of appointments, with implications stretching well beyond the conclusion of his single presidential term in 2022. Who the president selects as the central bank's next governor will affect perceptions of the Philippines' political economy and market risk. Duterte's appointments to the Supreme Court will influence the outlook for the Philippines' judiciary and legal system. Impacts A politically motivated central bank governor appointment would put pressure on the Philippines peso and interest rates. The Supreme Court is likely to become more pro-Duterte, even though his two latest appointees will have short tenures. This is likely to diminish the success of legal challenges against the drug crackdown, insulating Duterte's team politically.

Turkey's new central bank governor may loosen policy

2016 ◽  
Keyword(s):  
Central Bank ◽  
Financial Markets ◽  
Interest Rates ◽  
Commercial Banks ◽  
Prime Minister ◽  
Economic Conditions ◽  
Content Type ◽  
Lending Rate ◽  
Inflation Targets ◽  
Central Bank Governor

Significance Cetinkaya is an apparent compromise between President Recep Tayyip Erdogan and Prime Minister Ahmet Davutoglu. The MPC cut the overnight lending rate by 50 basis points to 10%, leaving other rates unchanged. Financial markets welcomed the decision in the hope that Cetinkaya would avoid more radical rate cuts that could make the lira plummet and further endanger inflation targets. Impacts Policy rate cuts will have little impact on growth given other risks and factors, particularly external financial and economic conditions. No serious effort will be made to reduce inflation to 5%, until and unless this becomes a government priority. Given better dialogue between government and TCMB, blame for high interest rates may fall increasingly on commercial banks.

Oil firm's demise lays China's crony capitalism bare

2018 ◽  
Keyword(s):  
Financial Risks ◽  
Private Companies ◽  
Content Type ◽  
Energy Company ◽  
Recent Deal ◽  
Apparent Loss ◽  
Crony Capitalism ◽  
Illegal Activities ◽  
The Military ◽  
China’S Economy

Subject The downfall of China CEFC Energy Company. Significance Chinese officials confirmed in late March that Chairman Ye Jianming of the China CEFC Energy Company is under investigation on suspicion of unspecified illegal activities. The energy and finance conglomerate, believed to be the world’s 222nd-largest company by revenue in 2017, has been on a worldwide investment spree. Its most recent deal was to acquire a 9.1-billion-dollar stake in Russia’s state-owned oil firm, Rosneft. However, with the apparent loss of political backing in China, the future of another of China’s largest private companies is in doubt. Impacts Ye will almost certainly be found guilty and receive a jail sentence. Some of the company’s backers in the Communist Party and the military will face investigation. China's government will seek an orderly reorganisation or breakup of the company, potentially involving a substantial bailout. Financial risks in China's economy may be revealed as further details of CEFC’s operations emerge.

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