Country Insights

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Anti-crisis package approved: IMF money to come shortly
UKRAINE - In Brief 28 Mar 2014
Yesterday IMF announced about positive results of technical mission. The Executive Board of the Fund was to decide regarding support to Ukraine. Though the message was positive, the main question was – what were the pre-conditions for the first wire? Given that the Cabinet promptly submitted to t...

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The SARB Catches a Breath on its Hiking Journey
SOUTH AFRICA - Report 27 Mar 2014
Following a 50-basis point increase in the benchmark interest rate in January 2014, the South African Reserve Bank (SARB)’s Monetary Policy Committee (MPC) decided to pause the interest rate hiking process. The repo rate will, for now, remain at 5.5% per year. Graph 1 Headline and Core Annual Inf...

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Credit: Little Stimulus to Consumption
BRAZIL ECONOMICS - Report 27 Mar 2014
The total volume of credit to individuals has been growing in real terms by around 10% a year since the start of last year. However, this does not mean that credit has been propelling consumption. On the contrary, as will be shown in this note, except for a few modalities, the supply of credit to...

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Konda Poll Stoked Wednesday’s Turkish Rally
TURKEY - In Brief 27 Mar 2014
A few hours ago, one of Turkey’s premier polling agencies KONDA, released its local election survey conducted on 22-23 March—in contravention of High Election Council regs forbidding such activity. KONDA heralds a clear win for AKP with 46%. The cover letter presenting the poll is dated 26 March,...

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PHILIPPINES - In Brief 27 Mar 2014
Monetary and fiscal policies have diverged with the former on a tightening track and the latter loosening up some more. Revealing its primary concern at this time, i.e., of liquidity-driven increases in risk appetites, the Monetary Board opted to raise the reserve requirement on bank deposits by ...

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Brazil Presidential Election
BRAZIL POLITICS - Report 27 Mar 2014
Ibope: President’s popularity wanes The most recent CNI/Ibope poll, conducted from March 14-17 and released earlier today, showed a sharp drop in the approval ratings of the Dilma administration. Such a change has not occurred since the widespread protests in June of last year. The poll also show...

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Expect Continuity, Not Change
INDIA - Report 26 Mar 2014
Executive Summary The media has anointed the BJP as a frontrunner in the spring elections, amid palpable disappointment with the ruling UPA, due to anemic growth, high inflation, and corruption. The UPA neglected all three of these issues in favor of focusing on subsidies. The election will serve...

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Buying Time
VENEZUELA - Report 26 Mar 2014
Executive Summary Two months of protests have left dozens dead, hundreds injured, over 1,800 arrested, assets damaged, and daily life disrupted. Government repression has been severe. Constitutional violations have set dangerous precedents. This turmoil has hurt the government’s image abroad but ...

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Slowing of Growth in Bank Credit
MEXICO - Report 25 Mar 2014
Executive Summary Bank lending to the private sector slowed during the second half of 2013 and early 2014 at least partially in response to a less dynamic internal market and consumer pessimism regarding the economy. As of January 2014, consumer credit was growing at its slowest pace since 2010. ...

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Recovery by Yearend?
INDIA - Report 25 Mar 2014
Executive Summary Our report of December 2, 2013 projected export buoyancy and a fall in companies’ interest rate payments, and said this would lead to better performance for large firms in 2013. Q4 data bears out all three predictions -- though the improvements were less robust than we expected....

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New Hurdles for Reforms
MEXICO - Report 25 Mar 2014
Executive Summary The road to structural reforms just keeps getting longer and bumpier. The administration of President Enrique Peña Nieto had promised to hand lawmakers its bills for the secondary laws on telecommunications and energy reform by early February, but with just over a month left in ...

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CORRECTED - Sicad II started at last. No surprises.
VENEZUELA - In Brief 24 Mar 2014
In line with Rafael Ramírez’s unofficial announcements, the average price of the dollar in Sicad II in its first day of operations was 51.86 Bs/$, as BCV reported at 6:00 PM. No information was given on trading volume. However, we believe volume today was low. Participants and banks have had litt...

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Inflation: Uptick Prevents Ending the Tightening Cycle
BRAZIL ECONOMICS - Report 24 Mar 2014
Until recently the signals from the Central Bank were that since inflation was decelerating, the end of the monetary tightening cycle was nearing. But the period of decelerating inflation was short lived. The resistance of some free prices, especially of services, combined with the sharp rise of ...

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Slowdown Against Government Target
CHINA - Report 24 Mar 2014
Executive Summary People’s Bank of China Governor Xiaochuan Zhou announced in a March 11th press conference that deposit interest rates would likely be “liberalized” in one or two years. Four days later, the Bank announced on its website that the daily trading band for the RMB would broaden to...

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Democracy or Monarchy?
ECUADOR - Report 24 Mar 2014
Executive SummaryThe president’s Alianza Pais suffered a major political setback in the February 23rd local elections, losing control of nearly all key municipalities. Rafael Correa recognized the sectarianism of some party members, and expressed disappointment over his party’s apparent lack of p...