Mexico oil sector plans look highly optimistic

2022 ◽  
Keyword(s):  
Exchange Rate ◽  
Dollar Exchange Rate ◽  
Content Type ◽  
Rating Agencies ◽  
International Prices ◽  
Oil Exports ◽  
Oil Sector

Significance The aim is for all production to be processed at Pemex refineries, and for petrol imports to be eliminated from 2023, making Mexico’s oil sector completely self-sufficient. Impacts The zero-exports strategy may prompt further downgrading of Pemex’s debt by rating agencies. Reduced oil exports would push Mexico’s trade and current accounts into deeper deficits, affecting the peso-dollar exchange rate. Crude export reduction by Mexico would have little to no effect on international prices.

Macroeconomic fundamentals and dynamics of the Indian rupee-dollar exchange rate

2015 ◽  
Vol 7 (4) ◽  
pp. 301-326 ◽  
Author(s):  
Chandan Sharma ◽  
Rajat Setia
Keyword(s):  
Exchange Rate ◽  
Structural Break ◽  
Cointegration Analysis ◽  
Least Square ◽  
Dollar Exchange Rate ◽  
Content Type ◽  
Macroeconomic Variables ◽  
Indian Rupee ◽  
Macroeconomic Fundamentals ◽  
The Impact

Purpose – This paper aims to examine the relationship between Indian rupee-US dollar exchange rate and the macroeconomic fundamentals for the post-economic reform period. Design/methodology/approach – The authors have used an empirical model which includes a range of important macroeconomic variables based on the basic monetary theories of exchange rate determination. At the first stage of the analysis, they have tested structural break in the data. Subsequently, they have employed the fully modified ordinary least square, Wald’s coefficient restriction and impulse response functions (IRF) to estimate the monetary model in the long- and short-run horizons. Findings – Results of analyses indicate that the macroeconomic fundamentals determine exchange rate in a significant way, but their effect varies sizably across the periods. The IRF illustrate the importance of interest rate in controlling exchange rate volatility. Practical implications – The analysis of the behavior of inter-relationship among macroeconomic variables will help policymakers in a deep-rooted understanding of this complex and time-varying relationship. Originality/value – Most of the existing studies have tested the impact of a single or a few macroeconomic fundamentals on exchange rate. But in the present study, we have tested the impact of a range of important variables, i.e. money supply, real income or output, price level and trade balance. Further, considering the importance of structural breaks in data, they authors have employed standard tests of structural break and incorporated the issue in the cointegration analysis.

Pemex business plan draws scepticism in Mexico

2019 ◽  
Keyword(s):  
Federal Government ◽  
Oil Prices ◽  
Business Plan ◽  
Content Type ◽  
Public Finances ◽  
Rating Agencies ◽  
Insurmountable Obstacle ◽  
Oil Sector ◽  
The Government ◽  
Substantial Drop

Significance It has proven a disappointment, failing to explain how ambitious targets will be met, while confirming the reversal of the oil sector liberalisation enacted by the Pena Nieto administration, which had been showing some promising results. Impacts The government cannot mount a massive rescue of Pemex without endangering its own finances. Any substantial drop in global oil prices could present an insurmountable obstacle for Pemex, and a significant blow to public finances. A downgrade of Pemex’s debt could push rating agencies to do the same with the bonds of the federal government.

South Sudanese oil production could remain low

2016 ◽  
Keyword(s):  
Oil Prices ◽  
Oil Production ◽  
Oil Exploration ◽  
National Unity ◽  
Content Type ◽  
Revenue Sources ◽  
South Sudanese ◽  
Oil Revenue ◽  
Oil Exports ◽  
Oil Sector

Subject The outlook for South Sudanese oil production. Significance South Sudanese exports are dominated by oil production. The end of the 2013-15 civil war and establishment of a national unity government could signal an improved outlook for the oil sector, but transportation and infrastructure barriers, low prices, a fragile peace and poor local management may hinder the sector's revitalisation efforts. Impacts Donors and the IMF will pressure authorities to increase non-oil revenue sources. No new oil exploration is likely before 2017. Further disruptions in oil production are possible. Lower oil prices will affect South Sudan more than most oil states given its overwhelming reliance on oil exports.

Angolan oil sector reform will require innovation

2018 ◽  
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Oil Price ◽  
Structural Reforms ◽  
Medium Term ◽  
Short Term ◽  
Sector Reform ◽  
Content Type ◽  
Oil Sector ◽  
Oil Company

Subject Sonangol priorities. Significance Early structural reforms by new President Joao Lourenco and more positive economic projections for 2018 suggest a potential uptick in Angola’s fiscal fortunes. Since assuming power in September, Lourenco has overhauled the leadership of state-owned oil company Sonangol and dismissed several prominent officials associated with his predecessor Jose Eduardo dos Santos. Separately, Lourenco has moved to tackle the overvalued kwanza. While this will raise debt-servicing costs, this will be partly ameliorated by the recent oil price of over 60 dollars per barrel. Impacts Scrapping the dollar currency peg will help ease the foreign exchange crisis and end payment constraints in the aviation and oil sectors. A more realistic exchange rate will fuel inflation in the short term but will likely improve medium-term economic prospects. Urban support for the People's Movement for the Liberation of Angola (MPLA) could decline further if reforms remain elite-focused.

Libyan oil exports will remain hostage to conflict

2020 ◽  
Keyword(s):  
Oil Production ◽  
Military Leader ◽  
Content Type ◽  
International Support ◽  
Oil Exports ◽  
Oil Export ◽  
Budget Crisis ◽  
Oil Sector ◽  
The Government

Significance In January, eastern-based military leader Khalifa Haftar forced the closure of oil export terminals in the Gulf of Sirte, causing oil production and exports to plummet by 80-90%. The retreat of Haftar’s forces from western Libya as units supporting the Government of National Accord (GNA) advance towards Sirte raises questions about how control of the hydrocarbons sector will evolve. Impacts Some increases in oil exports are likely, but they may be short-lived. If oil exports do not rise this year, fears of a budget crisis will grow. The NOC is unlikely to support the GNA trying to use more oil sector promises to mobilise international support, for example from Turkey.

Returns and volatility spillover between food prices and exchange rate in Nigeria

2020 ◽  
Vol 10 (3) ◽  
pp. 307-325
Author(s):  
Lateef Olawale Akanni
Keyword(s):  
Exchange Rate ◽  
Design Methodology ◽  
Empirical Studies ◽  
Food Prices ◽  
Volatility Spillover ◽  
Dollar Exchange Rate ◽  
Content Type ◽  
Volatility Transmission ◽  
Domestic Prices ◽  
Domestic Food

PurposeEmpirical studies have documented the linkage between exchange rate movement and food prices. However, the purpose of this study is to investigate the degree and direction of returns and volatility spillover transmission between exchange rate and domestic food prices in Nigeria.Design/methodology/approachThe study uses weekly data from January 2010 to January 2019. Also, the study adopts the improved Diebold and Yilmaz (2012) approach to evaluate the return and volatility spillover between food price and naira to dollar exchange rate. The study also account for 2016 exchange rate crash in the interconnectedness between food prices and naira to dollar exchange rate.FindingsThe paper finds evidence of directional interdependence among the considered food prices and exchange rate based on the obtained spillover indexes. In addition, exchange rate returns and volatility transmission to food prices is more than it receives, particularly after the exchange rate crash.Research limitations/implicationsThe high consumption of staple foods requires policies on price stabilisation such as massive investment in local production and reduction in import dependence, in order to cushion the effects of exchange rate depreciation on domestic prices of food.Originality/valueThis study is the first empirical study to investigate the interconnectedness between exchange rate and domestic food prices for a food import–dependent developing country using the Diebold and Yilmaz approach.

Optimistic Mexico budget maintains fiscal tightness

2021 ◽  
Keyword(s):  
Exchange Rate ◽  
Interest Rates ◽  
Current Account ◽  
Federal Budget ◽  
Oil Price ◽  
Fiscal Deficit ◽  
Short Term ◽  
Dollar Exchange Rate ◽  
Content Type ◽  
High Inflation

Significance It contains the federal budget and revenue legislation, as well as key macroeconomic domestic and international assumptions and projections, several of which look highly optimistic. Impacts Banxico will probably increase interest rates further due to relatively high inflation levels. Tight fiscal and monetary conditions will probably arrest short-term growth. The peso-dollar exchange rate should remain broadly stable as the fiscal accounts present manageable deficits in 2021-22. The current account is expected to show a small surplus during 2021 as a whole, and a marginal deficit next year. Legislators may raise the expected oil price for 2022 to boost spending in some areas without increasing the fiscal deficit target.

Iran oil sector faces slow recovery from sanctions

2015 ◽  
Keyword(s):  
Saudi Arabia ◽  
Market Share ◽  
Foreign Investment ◽  
Oil Production ◽  
Oil Industry ◽  
Slow Recovery ◽  
Content Type ◽  
Oil Exports ◽  
Oil Sector ◽  
Final Agreement

Significance Iran has agreed to restrict its nuclear programme in return for the lifting of sanctions, including on its oil and financial sectors. However, prices recovered slightly after the realisation that sanctions would take time to be lifted following the conclusion of a final agreement expected by June 30. Impacts Iranian oil production and export will increase by some 0.8 million b/d over a 6-9 month period from the start of the deal's implementation. Sanctions on Iran's repatriation of oil earnings would be lifted or suspended by US presidential waiver. Iran would seek foreign investment into its oil industry to sustain and increase production in the longer term. Increased oil exports could raise an additional 9.2 billion dollars in revenues in 2016. Saudi Arabia would avoid making production cuts in a bid to retain market share.

Argentine energy efforts will not end short-term woes

2018 ◽  
Keyword(s):  
Renewable Energy ◽  
Buenos Aires ◽  
Trade Deficit ◽  
Oil Prices ◽  
Energy Sector ◽  
Energy Matrix ◽  
Short Term ◽  
Content Type ◽  
International Prices ◽  
Oil Sector

Subject Outlook for the energy sector. Significance President Mauricio Macri’s administration inherited significant bottlenecks in the energy sector, with a gap between the supply of and demand for electricity and natural gas that fuelled energy imports and boosted the trade deficit. Oil production also declined on falling investments and reserves. Macri’s market-friendly approach, which included utilities tariff hikes, has attracted new investments in electricity, but low international oil prices still discourage oil-sector investment. Impacts Renewable energy investments will help diversify the energy matrix, but at a slower pace than expected. Frequent power failures in Buenos Aires will undermine tolerance for tariff increases. With low international prices discouraging oil investments, energy imports will continue to increase the trade deficit.

Fiscal squeeze will slow Iraq oil sector expansion

2015 ◽  
Keyword(s):  
Islamic State ◽  
Content Type ◽  
Oil Companies ◽  
Financial Difficulties ◽  
Oil Exports ◽  
Trade Sanctions ◽  
Oil Sector ◽  
State Group ◽  
Oil Revenues ◽  
The Impact

Subject The impact of a fiscal squeeze on oil sector investment. Significance Despite continuing turmoil in parts of the country, Iraq's oil exports are rising, averaging close to 3 million barrels a day (b/d) in March, the highest since 1990 when financial and trade sanctions were imposed after the occupation of Kuwait. April exports are on course to top 3 million b/d. Yet financial difficulties caused by the decline in global oil prices and the high cost of the war against the Islamic State group (ISG) are affecting the government's ambitious investment plans for the sector, prompting the oil ministry to request international oil companies (IOCs) in southern Iraq to scale back their expansion plans. Impacts Government plans to increase southern production from almost 3 million b/d to 8 million b/d by 2020 will need to be revised. Introduction of new heavy grade oil expands Iraq's oil marketing potential. Decline in oil revenues will lead to reduced government spending and a higher fiscal deficit in 2015.

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