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Policy & Government

China Unlikely to See Swift Recovery Despite Industrial Activity Resuming

Tentative signs of an impending recovery as factories reopen should not overshadow the reality that COVID-19’s impact on the Chinese economy will far exceed that of SARS or the global financial crisis, IIF warns.

27 Mar 2020

Bips & Pieces Policy & Government Coronavirus

COVID-19 Could Restart US-China Trade Tensions – Control Risks

With the US likely to fall into a recession combined with widespread social disruption caused by the lockdown, Trump’s re-election this November appears uncertain. Far from soothing tensions between the US and China, the pandemic has heightened them.

27 Mar 2020

Russian Banks Come Under Pressure as Kremlin Tweaks Taxes to Support Pandemic-Hit Economy

The Russian government introduced sweeping changes to the tax regime in order to support businesses and SMEs, while seeking to secure additional revenue streams elsewhere. But while the country’s ample FX reserves should see it fare better than many EM peers, its banking sector – subject to a massive and prolonged consolidation over the past five years – is also feeling the squeeze.

27 Mar 2020

Somalia Lands IMF Funding Deal in Huge Boost to Reform Effort

The IMF has agreed to lend Somalia SDR292.4mn (approx. USD395.5mn) as part of a three-year Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) in a significant boost to the war-torn country’s reform efforts.

26 Mar 2020

World Bank Approves USD500mn Loan to Ethiopia

The World Bank has approved a USD500mn loan to Ethiopia, in order to support the government’s ‘Homegrown Reform Agenda’, underpinned by the Second Ethiopia Growth and Competitiveness Development Policy Operation (DPO).

26 Mar 2020

Kenyan Bond Yields Spike Due to Pandemic, Locust Disruption – Cytonn Investments

As the COVID-19 pandemic wracks emerging and developed economies alike, market have gone into overdrive with shares and bonds both suffering heavy sell-offs as investors flee to the safety of US dollars. Kenya’s local currency treasury bonds (TBs) and outstanding Eurobonds have been no exception to this trend.

26 Mar 2020

Ashmore: Assessing the EM Policy Reaction-Function in the Context of a COVID-19 Induced Recession

Ashmore's Deputy Head of Research Gustavo Medeiros assesses the policy reactions in emerging and developed world to the COVID19 pandemic and its impact on the global economy, concluding that EMs - lead by a gradual recovery in China and intra-EM trade - will regain strength and resilience as the crisis subsides.

25 Mar 2020

City of Tshwane Defaults on Bond – Nedbank

On 24th March, the City of Teshwane Metropolitan Municipality, a local government municipality covering Pretoria and the surrounding areas, defaulted on a ZAR5.5bn local currency medium-term note. According to Jones Gondo, Senior Credit Analyst, and Nthulleng Mphahlele, Analyst at Nedbank, it is a technical default caused by government issues.

25 Mar 2020

Mexico Growth Outlook Sinks as Focus Shifts to Healthcare, Support for Most Vulnerable

The impact of the COVID-19 pandemic is expected to generate a significant GDP contraction, BBVA analysis indicates, as care and support for the most vulnerable should be given priority over immediate fiscal objectives.

25 Mar 2020

The Gambia Secures USD47.1mn in Credit from IMF

The Gambia has secured a USD47.1mn extended credit facility (ECF) from the International Monetary Fund (IMF) this week, with the proceeds from the funding going towards the development of policies to help contain the spread of COVID-19 and mitigate its economic impact.

24 Mar 2020

UAE Bank to See Asset Quality Weaken – Fitch Ratings

The impact of the coronavirus is being felt by countries and sectors worldwide, but the UAE is particularly sensitive as key sectors like oil & gas and logistics feel the disruption more severely. For the country’s banking sector, the pandemic looks set to place additional pressure on banks’ credit profiles by reducing asset quality, according to a note from Fitch Ratings.

24 Mar 2020

Which SSA Economies are Most Vulnerable to COVID-19?

Africa appears so far – at least according to official statistics – to have contained the spread of COVID-19, with SSA reporting fewer than 300 confirmed cases. But this does not mean the region will be able to ride out the storm and avoid the economic and health impact seen elsewhere.

24 Mar 2020

Indonesia Inks USD300mn Financial Reform Deal with World Bank

The World Bank has approved a USD300mn loan deal with Indonesia that will see the South Asian country fund financial sector reforms.

23 Mar 2020

Do Current Valuations Compensate Investors for Increased Default Risk?

As COVID-19 and the ongoing oil price spat between Riyadh and Moscow continues to wreak havoc on markets across the world, the spreads on high yield assets in both EM and DM have widened significantly. With many companies seeing their revenues take a beating at countries go into lockdown, and with many sovereigns juggling their need for fiscal stimulus with already lopsided public finances, Iain…

23 Mar 2020

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