Country Insights

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Weekly Tracker: June 14-20
TURKEY - Report 14 Jun 2015
Executive Summary An air of unreality surrounds the nation, with pundits trying to convince us that coalition formation would be easy, as parties shut the door to any compromise. Unless reality sets in and each party makes very unpleasant sacrifices, early elections are more likely. We shall get ...

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MNB Policy: Defying Headwinds
HUNGARY - Report 12 Jun 2015
Executive SummaryThe MNB stepped up efforts to ease policy over the past month. In late May, it cut the base rate by another 15 bps to 1.65%, and then in early June, it announced quantitative easing through a reform of its regulatory instruments and mechanism, effective late September. The latter...

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IMF relaxes on debt restructuring
UKRAINE - In Brief 12 Jun 2015
It looks like on debt restructuring everything develops in line with our expectations. The IMF mission arrived in Kyiv and was pretty much pleased to see serious progress on many directions. Reforms are gradually moving on disregard incredible resistance. What more, it looks like the general situ...

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Week of June 11
BRAZIL POLITICS - Report 11 Jun 2015
Issues regarding the relationship between the Legislative and Executive remain on the agenda this week. Congress will discuss presidential vetoes, changes in procedures for provisional measures and the compulsory budget. President Dilma, after a trip to Portugal, announces measures for the Minha ...

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Liquid reserves boosted by SDRs
VENEZUELA - In Brief 10 Jun 2015 2 responses
Blanca Vera reported today in El Nacional Web that BCV drew $1.5 billion from the IMF in recent days. This news would confirm our hypothesis that BCV sought funds to shore up foreign reserves ahead of the $798 million decline on June 3. Otherwise, liquid reserves would have fallen to $10 million....

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Economics: Cost-push and further peso spike
MEXICO - Report 10 Jun 2015
Executive Summary The depreciation and volatility that the Mexican peso has experienced in relation to the dollar since late last year is something that one would be ill-advised to try to minimize. As is widely known, much of the peso's recent depreciation (and volatility) is explained not only b...

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Growth: Good Headline, Poor Dynamics
TURKEY - Report 10 Jun 2015
GDP growth came in at 2.3%, y/y, in the first quarter of the year, better than both the consensus (1.6%, CNBC-e) and our even weaker (1%-1.5%) forecasts. But this hardly changes the fact that the underlying growth dynamics or momentum remains weak. It looks like private consumption drove growth i...

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Monetary Policy Where It Belongs
PHILIPPINES - Report 09 Jun 2015
Executive SummaryThe BSP has been telling markets that it will be moving into an interest rate corridor approach in implementing monetary policy. The plan, expected to be in place by early next year, will involve first putting in place a new deposit auction system to augment existing liquidity ma...

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Politics: First Analyses of the Electoral Results
MEXICO - Report 09 Jun 2015
Executive summaryThere were no changes in the relative weights of the three main parties in Congress. However, the amount of votes they gathered has diminished constantly and importantly. The coalition PRI-Green party will not have a majority in the Chamber of Deputies: based on available data, t...

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Continuing With the Adjustment Despite the Costs
BRAZIL ECONOMICS - Report 08 Jun 2015
Executive Summary There's no way to escape from the costs of the fiscal adjustment under way in Brazil. Besides sharp declines in industrial production and fixed capital investments, to name just two components of GDP, the unemployment rate is trending upward and real wages downward. The reces...

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Week of June 8
BRAZIL POLITICS - Report 08 Jun 2015
Several important events are scheduled for this week. There are expectations regarding the infrastructure package, which will be announced by President Dilma Rousseff on Tuesday, June 9. The House resumes the debate on political reform and discusses payroll tax exemptions. The PT holds its party ...

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The National Assembly voted YES on a Constitutional ammendment to allow re-election. A second and definitive vote will be on Friday
DOMINICAN REPUBLIC - In Brief 08 Jun 2015
On Saturday, the National Assembly voted YES on the proposal to amend the Constitution in order to allow a current President to run for re-election. The proposal passed with 183 votes out of 222. The assembly will meet again on Friday for a second and definitive vote. If finally approved, the ame...

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General Elections: Turkey enters the era of political instability
TURKEY - In Brief 08 Jun 2015 4 responses
General Elections: Turkey enters the era of political instability General elections shed light on several questions that vexed experts’ minds, but immediately kindled new ones which are proving to be intractable. My current guess is that it will be very difficult to form a coalition of any kind, ...

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Monetary Tightening and Recession: What Does the Central Bank Want?
BRAZIL ECONOMICS - Report 08 Jun 2015
At its last meeting, the COPOM decided to raise the SELIC rate by 50 basis points, to 13.75% a year. This decision was widely expected by the market, so it caused no surprise. But there was also an expectation of a change in the tone of the communiqué, indicating that the end of the tightening cy...

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Start of the Big Game
RUSSIA / FSU POLITICS - Report 08 Jun 2015
With the last regional elections ahead of the national parliamentary elections taking place in September 2015, a 2016 campaign is almost underway. A changed voting system, a five-year gap after the last Duma election and other factors make next year's election a decisive moment requiring great ef...