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Country Insights

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Petronas' Departure from Venezuela
VENEZUELA - In Brief 09 Sep 2013 2 responses
According to Reuters, Malaysian state oil company Petronas announced it quit its participation in Petrocarabobo, a 400,000 b/d Orinoco Oil Belt project in which Petronas held 11%. The other partners are PDVSA (60%), Repsol (11%), ONGC Videsh (11%), Oil India (3.5%) and Indian Oil Corp (3.5%).  Pe...

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Encouraging July Fiscal Numbers
PHILIPPINES - In Brief 09 Sep 2013
There are a number of positive signals that can be gleaned from the July fiscal performance report, including: 1. Commendable increases in tax revenues, with BIR and BoC collections rising 20% and 13.5%, both above their first half growth rates of 14% and 1.2% respectively.  Coming from its flatt...

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Political Insights: Week of September 9
BRAZIL POLITICS - Report 09 Sep 2013
All eyes are on the Supreme Court (STF), which may conclude the Mensalão (monthly payoff scandal) trial this week.On Monday, President Dilma Rousseff meets with allied leaders to discuss the presidential vetoes to be analyzed on September 17. The cycle of roadway concessions starts this week. CNT...

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Fiscal Policy Remains Expansionary
BRAZIL ECONOMICS - Report 09 Sep 2013
The big surprise in the minutes of the last COPOM meeting was the claim that there are “conditions, over the horizon relevant to monetary policy, for the public sector balance sheet to shift to the neutral zone.” This is especially strange after the recent statements by COPOM members of concern o...

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Draft Reform of FX Law
VENEZUELA - In Brief 09 Sep 2013 2 responses
The available draft of the new Forex Law (Ley Contra los Ilícitos Cambiarios, LCIC) is a move towards a more flexible and open foreign exchange regime.The project brings few substantive changes to the definition of offenses and significantly increases penalties. The fundamental change, in our vie...

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Inflation and Growth: Where to?
BRAZIL ECONOMICS - Report 09 Sep 2013
Executive Summary Inflation in July was near zero, but this does not represent a trend reversal. The 12-month forward-looking expectations continue to rise, at more than 6% a year; the 12-month inflation of non-tradables is still growing above the upper limit of the target interval; and even thou...

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Gross Reserves Fell to 5% in August
UKRAINE - In Brief 09 Sep 2013
Gross foreign reserves declined $1.1 billion (4.7% m/m) in August down to $21.65 billion or 2.4 months of future imports, according to the Central bank report on September 6th.It is the lowest level of gross foreign reserves over the last seven years.  Still in 2006 when Ukraine had reserves near...

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Mexico's Fiscal Reform and Economic Package for 2014: Back to Deficit Financing
MEXICO - In Brief 09 Sep 2013
The government announced today a very significant fiscal package for 2014, as well as an ambitious fiscal reform. In essence, both proposals are oriented to increase public sector revenues in order to augment spending in four distinct areas, two traditional and two new ones. The former include mo...

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Weekly Tracker: September 8-14
TURKEY - Report 08 Sep 2013
Executive Summary Obama is not guaranteed to receive the go-ahead for Syria from the House.An airstrike on Assad’s assets will degrade his capacity to execute the war and give the rebels the upper hand. Yet, the threat of Shia Axis taking revenge on Turkey can’t be dismissed. Ankara is on the ver...

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Minor Rotations
RUSSIA / FSU POLITICS - Report 06 Sep 2013
The Ministry of Economic Development, the Central Bank and the Presidential Administration are currently engaged in a process of widespread top management rotation. New heads of agencies are bringing in their former employees, thereby significantly influencing the work of agencies as a whole. Alt...

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One Step Closer to Compensation
VENEZUELA - Report 06 Sep 2013
After almost six years, the International Centre for Settlement of Investment Disputes (ICSID) issued a ruling in the case ConocoPhillips vs. the Bolivarian Republic of Venezuela (ICSID Case No. ARB/07/30) on the expropriation of ConocoPhillips’ stake in Petrozuata, Hamaca and Corocoro. The rulin...

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Bold Move: Banco de Mexico Reduces Interest Rates
MEXICO - In Brief 06 Sep 2013
Banco de México announced an interest rate reduction (domestic interbank rate), of 25 basis points, to an annual 3.75%.The reasoning behind México’s central bank is based on two main factors: i) the fact that consumer inflation has diminished to an annual 3.5%, clearly below the upper bound of th...

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Money Supply Jumps 30%
PHILIPPINES - In Brief 06 Sep 2013
As expected, the mandated partial removal of trust funds from the BSP's SDA facility contributed to a substantial 30% increase in M3 in July compared with an already high 20% the previous month.  In addition to accelerated growth in deposit levels, the BSP also attributed the increase to higher f...

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Ground Prepped for Soft Landing?
INDONESIA - Report 05 Sep 2013
Executive Summary The Indonesian economy has shown signs of overheating over the past few months. The Consumer Price Index has risen significantly, given higher domestic fuel prices, the flawed trading system and Ramadan festivities. We’re seeing further economic pressures in the form of a con...

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Mexico’s State of the Union: 120 days to go
MEXICO - In Brief 05 Sep 2013
On Monday, President Pena Nieto gave his State of the Union address before a very small and select audience at the presidential residence of Los Pinos. He chose a smaller venue because since last week, Mexico City has been taken over by the dissident group of teachers who have been protesting aga...