Damascus will likely fail to stem currency collapse

2020 ◽  
Keyword(s):  
Financial Support ◽  
Fiscal Deficit ◽  
Exchange Market ◽  
Treasury Bills ◽  
Content Type ◽  
Limited Impact ◽  
Gulf Countries ◽  
Entire Country ◽  
Official Rate ◽  
The Government

Significance The Syrian pound’s weakening beyond 1,000 to the dollar on the parallel market has exposed the chronic weakness of the economy, even as President Bashar al-Assad’s forces move ever closer to realising his goal of winning back control over the entire country. The government and central bank have maintained the official rate and resorted to a mixture of deterrents and inducements, seeking to stem the currency slide. Impacts The pressure on the parallel exchange market will push up living costs, despite government efforts to control prices. The government’s first issue of Treasury bills since 2011 will help finance the fiscal deficit but have limited impact on the exchange rate. The clampdown on informal transactions and suspension of licensed exchange houses may not draw more foreign exchange into official channels. Assad may seek to restore relations with Gulf countries to garner financial support, possibly in return for loosening ties with Iran.

Import obstacles will slow Argentine economic rebound

2021 ◽  
Keyword(s):  
Spillover Effect ◽  
Exchange Market ◽  
Luxury Goods ◽  
Content Type ◽  
Product Availability ◽  
Regulatory Changes ◽  
High Inflation ◽  
Red Tape ◽  
The Government

Significance In January, the Central Bank of Argentina restricted access to the official exchange market for imports of some luxury goods, while the government asked companies to present their foreign trade estimates for 2021 and suggested that it would not approve any rise in imports unless this was offset with higher exports. Importers are facing mounting delays, which raise costs and hamper domestic production by restricting access to inputs. Impacts Higher import costs due to red-tape delays and shortages of product availability will fuel already high inflation. Frequent regulatory changes will discourage long-term investments and damage importers’ relations with foreign suppliers. Import controls will hit the auto sector hard, with a negative spillover effect in manufacturing more broadly.

India’s 5G auction will boost Reliance’s digital plans

2021 ◽  
Keyword(s):  
Public Sector ◽  
Business Strategy ◽  
Financial Support ◽  
Content Type ◽  
Public Sector Banks ◽  
Spectrum Auction ◽  
Floor Price ◽  
The Government

Significance This came after the government announced plans for a 4G spectrum auction in March 2021, after a five-year gap. There is growing speculation that this will be followed by an auction of 5G spectrum later in the year. Impacts Reliance’s lead on 5G will boost its broader digital business strategy. New financial support to indebted telcos will help to avoid further strain on public sector banks. Data tariffs are likely to remain competitive in India, even after a new floor price.

Argentine elections will drive monetary expansion

2015 ◽  
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Policy Framework ◽  
Close Monitoring ◽  
Exchange Market ◽  
Content Type ◽  
Official Exchange Rate ◽  
The Government ◽  
Nominal Anchor ◽  
Monetary Policy Framework

Subject The Central Bank's 2015 monetary programme. Significance The Central Bank's (BCRA) 2015 monetary programme indicates that the main features of the current monetary policy framework -- characterised by an expansionary bias, foreign exchange controls and close monitoring of the informal exchange market -- will continue this year. Impacts The government will prioritise exchange rate stability, at the expense of economic activity. The BCRA will continue using the official exchange rate as a nominal anchor. Foreign exchange controls may be extended to discourage devaluation expectations and to protect international reserves.

Nigerian banks will struggle to repeat 2017 results

2018 ◽  
Keyword(s):  
Small Businesses ◽  
Banking Sector ◽  
Oil And Gas ◽  
National Elections ◽  
Treasury Bills ◽  
Content Type ◽  
Balance Sheets ◽  
Domestic Debt ◽  
The Government ◽  
Run Up

Subject Nigerian banking sector. Significance Some of Nigeria’s largest banks made significant profits in 2017 despite the country’s recession, benefitting mainly from high-yielding Nigerian Treasury Bills. This is unlikely to be repeated this year, with yields falling as the government replaces expensive domestic debt with cheaper Eurobonds, and banks attempt to shore up their balance sheets. Higher oil prices will help this process, yet many smaller banks are struggling to replicate their larger rivals' success. Impacts A restructuring of telecommunications company 9Mobile’s loan would benefit banks' non-performing loan numbers. Any uptick in Niger Delta insecurity could negatively impact banks, as most have significant loans with the upstream oil and gas sector. The CBN may issue more loans via commercial banks to small businesses and farmers in the run-up to next year's national elections.

Pandemic will take heavy economic toll in Colombia

2020 ◽  
Keyword(s):  
Central Bank ◽  
Interest Rates ◽  
Economic Impacts ◽  
Fiscal Deficit ◽  
Slow Recovery ◽  
Content Type ◽  
Fiscal Incentives ◽  
Second Year ◽  
The Government

Significance This has triggered a series of economic setbacks. The economy showed modest growth in the first quarter of 2020 before plummeting 15.7% in the second, year-on-year. Various industries and sectors have all but ground to a halt. Unemployment reached 20.3% in the second quarter. Impacts Fiscal incentives implemented by the government to mitigate the pandemic’s economic impacts will widen Colombia’s fiscal deficit. Interest rates will probably drop further as the Central Bank tries to add liquidity into the economy. Fiscal pressures imply a slow recovery for the economy in coming years, rolling back two decades of social improvements.

New Zimbabwean currency will struggle for traction

2019 ◽  
Keyword(s):  
Public Relations ◽  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Exchange Market ◽  
Short Term ◽  
Content Type ◽  
International Reputation ◽  
Funding Programme ◽  
The Government ◽  
Recent Extension

Significance After a month of fuel protests and a violent military crackdown, Mangudya on February 20 effectively acknowledged Zimbabwean bond notes and electronic RTGS bank balances as part of a new currency scheme. The authorities' latest attempt to stabilise the parallel foreign exchange market, the RTGS dollar, will trade on a new interbank foreign exchange market on a ‘willing-buyer, willing seller’ basis. Impacts The recent extension of US sanctions will likely delay the prospect of a new IMF funding programme over the short term. The government will struggle to improve its international reputation despite a heightened public relations drive. Recent public protests are likely to have delayed the introduction of a brand-new national currency for now.

Paraguay's COVID-19 response may lose initial lustre

2020 ◽  
Keyword(s):  
Fiscal Deficit ◽  
Bond Issue ◽  
Fiscal Responsibility ◽  
Content Type ◽  
Timely Response ◽  
Global Spread ◽  
The Government ◽  
The Impact

Subject The impact of COVID-19. Significance In response to the COVID-19 outbreak, the government has ditched the Fiscal Responsibility Law (LRF), in force since 2015, at the same time launching a 1-billion-dollar bond issue in order to cover a surging fiscal deficit. Paraguay has won plaudits for its timely response to the global spread of the pandemic with the introduction of a strict quarantine. Impacts Fiscal limits may continue to be breached as elections draw nearer. Business pressures will continue to tilt the balance towards increased borrowing rather than increased taxes. The government could lose the momentum gained from its COVID-19 response if related corruption allegations mount.

Costa Rica protests to hinder Alvarado’s reforms

2019 ◽  
Keyword(s):  
Costa Rica ◽  
Value Added ◽  
Social Spending ◽  
Fiscal Deficit ◽  
Value Added Tax ◽  
Content Type ◽  
Form Part ◽  
Evangelical Movement ◽  
The Government

Significance The demonstrations form part of a broader backlash against the government’s newly introduced value-added tax (VAT) and indicate the depth of popular feeling building against President Carlos Alvarado. Impacts The risk of watering down the new VAT regime will raise concerns among investors about the government’s commitment to fiscal rigour. Delaying VAT implementation would also force the government to cut social spending in order to hit its fiscal deficit goals. The evangelical movement will demonstrate its strength in further protests throughout Alvarado’s term.

Peace deals will not reduce illegal mining in Colombia

2017 ◽  
Keyword(s):  
At Risk ◽  
Financial Support ◽  
Large Scale ◽  
Gold Mining ◽  
Armed Forces ◽  
Content Type ◽  
Illegal Mining ◽  
Legal Challenges ◽  
The Government ◽  
Trump Administration

Subject Illegal mining. Significance The army this month announced the capture of two suspected members of the Clan del Golfo crime group (otherwise known as the Urabenos) in Buritica, Antioquia. The group is thought to be attempting to revive illegal mining in the area, which the government has targeted as part of a recent drive to tackle the crime. Despite increased security efforts nationwide, and the demobilisation of rebels from the Revolutionary Armed Forces of Colombia (FARC), however, little immediate improvement is anticipated. Impacts Gold mining firms are particularly at risk of illegal miners and will invest heavily in security. Gaining project licences may become more difficult if communities associate mining with destructive, unregulated operations. Environmental activism may contribute to the spread of illicit mining as permits for large-scale projects face mounting legal challenges. Security funding could come under further strain should the Trump administration curtail US financial support to Colombia.

Weather clouds agricultural outlook in Argentina

2017 ◽  
Keyword(s):  
Agricultural Sector ◽  
Fiscal Deficit ◽  
Agricultural Export ◽  
Content Type ◽  
Export Taxes ◽  
The Government

Subject Outlook for the agricultural sector. Significance Floods and drought affecting Argentina’s agricultural heartland could lead to a reduction of 1.3 million hectares in the previously estimated sowing area (34.3 million hectares) for the 2016-17 harvest. Impacts The government expects GDP to expand by 3.5% this year, after an estimated 2.3% decline last year. The fiscal deficit will delay further cuts in agricultural export taxes. This harvest will not achieve the record output reached last season.

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