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Repo Rate Remains Unchanged
SOUTH AFRICA - Report 23 Sep 2015
The South African Reserve Bank (SARB)’s Monetary Policy Committee (MPC) voted to keep the repurchase (repo) rate unchanged at 6% today during its September meeting. This follows July’s decision that saw the repo rate increase from 5.75 to 6%.

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MNB decided to loosen monetary conditions further on September 22-23
HUNGARY - In Brief 23 Sep 2015
The MNB decided to keep its base rate at 1.35% yesterday, but the bank changed the main sterilization instrument on which the base rate is paid, from 2-week deposits to a new 3-month deposit facility, with unlimited access. This morning, the Bank held an auction for 2-week deposits, at which it l...

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The impact in China and abroad of slowing growth
CHINA FINANCIAL - Report 23 Sep 2015
-Given China’s size, and the ways in which its domestic imbalances have been reflected in external markets, the way in which China adjusts is likely to have major impacts both on domestic economic sectors and those abroad. It is important to work through the consequences of an adjustment to deter...

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MPC: On Autopilot a While Longer
TURKEY - Report 22 Sep 2015
The Monetary Policy Committee left all interest rates unchanged today, as expected.The economics of the statement is also very similar to the previous ones except for a few minor additions (e.g., “the composition of growth is expected to shift gradually towards net exports in the upcoming periods...

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Hungary's standing within the EU regarding the refugee crisis has improved recently
HUNGARY - In Brief 21 Sep 2015
A week ago, we launched a somewhat pessimistic analysis on Hungary's outlook in the ongoing refugee crisis, suggesting that the government has essentially no good choice in trying to solve the problem. This conclusion is still valid for the longer run, but the government used the few tactical cha...

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Week of September 21
BRAZIL POLITICS - Report 21 Sep 2015
President Dilma Rousseff announces an administrative reform, with a reduction in the number of ministries and the number of public posts. In Congress, we highlight the analysis of the presidential vetoes, especially the one dealing with salary increases for the Judiciary. On Wednesday, September ...

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Scary Year Ahead
COLOMBIA - Report 21 Sep 2015
Q2 GDP expansion of 3% was pretty much in Iine with expectations, and showed slowdown to be modest, compared with the predicament of other Latin American economies. We expect 2.9% expansion for 2015, just over the Central Bank’s forecast of 2.8%. But the government is projecting 3.5% growth. That...

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A New Chapter in the Fiscal Adjustment Drama
BRAZIL ECONOMICS - Report 21 Sep 2015
Recognizing the serious error of sending to Congress a budget bill with a primary deficit of 0.5% of GDP, which prompted S&P to downgrade Brazil’s credit rating, the administration sent a package of measures to Congress aiming to achieve a primary surplus of 0.7% of GDP in 2016. It did not obtain...

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Local Debt Risk Contained
CHINA - Report 21 Sep 2015
Fixed asset investment increased 9.2% y/y in real terms in August, reaching its lowest level since this cycle of investment slowdown. Industrial output was up 6.1% y/y, but price-adjusted actual growth was even lower. The PMI index published by the National Bureau of Statistics shows August PMI a...

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Weekly Tracker: September 20-26
TURKEY - Report 20 Sep 2015
Our political analyst-cum-Cosmic strategist has opted for a different format in this Tracker, laying out his somewhat controversial albeit optimistic post-election scenario and thoughts. Please read on… We defer a detailed analysis of the week’s data releases to our monthly report to be publis...

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Dollarization At All Cost
ECUADOR - Report 17 Sep 2015
Dollarization at all costs was Finance Minister Fausto Herrera’s promise during a recent press conference – where listeners responded with a standing ovation. Herrera said the government would do whatever it takes to maintain the dollarized regime, by increasing the inflow of dollars, and protect...

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Economics: An Insufficiently Austere Budget
MEXICO - Report 15 Sep 2015
The Ministry of Finance handed Congress its 2016 budget proposals on Tuesday, September 8. The budget package includes both the revenue and spending bills along with the document containing the general economic assumptions that underpin the budget proposals. The various components of the 2016 pac...

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Politics: Peña’s Ratings Tank as Distrust Grows
MEXICO - Report 15 Sep 2015
As it approaches the midway point in its six-year term of office, the administration of President Enrique Peña Nieto faces its lowest approval ratings to date. The economy’s sluggish performance, growing perceptions of official corruption and the public’s sense that conditions of public security ...

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​Concerned about escalating political risk
TURKEY - In Brief 15 Sep 2015
I was about to fire off a post about rising political risks, when an astute reader beat me to it with a couple of questions. As per my time-honored custom, s/he shall remain anonymous, but her/his questions and my answers shall live forever in memories like a beacon of hard-nosed strategic analys...

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The Current Account Deficit Continues to Contract
SOUTH AFRICA - Report 15 Sep 2015
The seasonally adjusted annualized current account balance posted a figure of minus R124 billion, bringing the current account balance as a percentage of GDP to -3.1% in Q2 2015. This represents a contraction in the current account deficit as a percentage of GDP from -4.7% in Q1 2015. This contra...