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Policy & Government

Ashmore: The Case for a Global Macro-Prudential Policy

The tendency for global capital to flee ‘risky’ Emerging Markets (EM) countries indiscriminately in favour of ‘risk free’ developed markets during outbreaks of global risk aversion is one of the great international market failures of our time. This behaviour has been ubiquitous in past crises and the 2020 Coronavirus Crisis is no exception. EM countries have experienced indiscriminate outflows,…

24 Apr 2020

Indonesia Enlists Central Bank to Backstop Government Sukuk Sales in Effort to Fund Additional COVID-19 Spending

The Central Bank of Indonesia participated in domestic government long-term sukuk sales this week following a rule change that allows it to directly access the securities through primary auctions. The move enables Bank Indonesia to backstop domestic sukuk sales as the government seeks to raise additional funding to help tackle the COVID-19 pandemic.

24 Apr 2020

Turkey’s Central Bank Cuts Rates More than Expected, Raising Concerns Over FX-Denominated Debt

Turkey’s Central Bank cut the policy rate by a full percentage point to 8.75% this week in a bid to lower the cost of domestic borrowing, but analysts warn the move could pile additional pressure on the country’s corporate sector by making it harder to pay back foreign currency debt.

23 Apr 2020

GCC States’ Deficits Set to Rise Sharply Due to Pandemic Disruption - Fitch

The twin shock of coronavirus and plummeting oil prices have put the brakes on global growth. Combined with widespread outflows, a strengthening US dollar and a global recession, emerging markets face an unprecedented flurry of headwinds. According to a recent report from Fitch, weaker rated GCC sovereigns may be vulnerable to a downgrade in the current market conditions.

23 Apr 2020

IMF Approves USD274mn Support Package to Paraguay

The IMF’s Executive Board has approved a USD274mn emergency support package for immediate disbursement to Paraguay in order to alleviate the economic shock caused by COVID-19.

23 Apr 2020

Land Bank Potentially Triggers Default

South African government-owned Land Bank may have triggered a default under the terms of its ZAR30bn domestic medium-term note (DMTN) programme after failing to make a payment on a revolving credit facility (RCF), despite previously reporting a strong liquidity profile.

22 Apr 2020

South Africa’s ZAR500bn Fiscal Bazooka Risks “Chasing a Growing Hole”

South African President Cyril Ramaphosa unveiled a ZAR500bn (approx. USD26.5bn) fiscal support package this week in a bid to help ease some of the economic pressures caused by the spread of COVID-19 and the lockdown designed to contain it. Analysts say South Africa, which was already in a precarious fiscal position before the lockdown began, was right to jump off the fiscal cliff – but now risks…

22 Apr 2020

Chile, Colombia Enlist Banking Sector to Help Channel Relief for Businesses and SMEs

The Andean nations are relying on banks to help disburse pandemic support packages into the wider economy – but will near-zero interest rates feed through to borrowers?

21 Apr 2020

China Registered Negative Quarterly Growth for the First Time in 40 Years

China’s economy contracted for the first time in nearly 40 years due a coronavirus-inflicted slowdown through the first quarter of this year, although green shoots have started to emerge in March.

21 Apr 2020

IMF Debt Relief Programmes May Lead to More Defaults in Private Sector – Moody’s

This week the IMF announced plans to provide USD500mn in debt relief to some of the world’s poorest countries under its Catastrophe Containment and Relief Trust. All countries eligible for concessional financing from the World Bank are targeted by the G7’s debt service payments.

20 Apr 2020

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