Country Insights

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All Eyes on the Fed and the SARB
SOUTH AFRICA - Report 16 Sep 2013

This week the Federal Open Market Committee of the US Federal Reserve Bank meets to discuss the conduct of monetary policy. Expectations are that an announcement will be made concerning the timing and extent of the reduction of the stimulus program, also known as “quantitative easing”.


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Weekly Tracker: September 15-21
TURKEY - Report 15 Sep 2013

Executive Summary

An American military intervention in Syria is off the table, which leaves Ankara out in the cold.

The milestone event in the Kurdish Peace Process is the announcement of the Reform Package during the coming week. Will PM Erdogan bite the electoral bullet an...

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Heads Up
VENEZUELA - In Brief 14 Sep 2013 2 responses
Rumors about conversations between the IMF and the Venezuelan government are emerging. We don’t know if there's any basis for these rumors. However, thinking out of the box, we see both parties having incentives to engage in conversations. 

For the IMF, this would be an opportunity t...

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DOMINICAN REPUBLIC - Report 14 Sep 2013

Executive Summary

The Central Bank’s abrupt reversal of its expansionary monetary policy, amid concerns over sharp currency depreciation and prospective inflation, unnecessarily compromised economic recovery. Those worries dominated economic policy decisionmaking, and pointed once ag...

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Emergence of Rupee Denominated Bonds as a Globally Investable Asset Class
INDIA - Report 13 Sep 2013

Executive Summary

Investment into rupee denominated debt in India has faced a cumbersome auction mechanism, in which a foreign investor must first buy the right to buy government bonds. This auction mechanism was eliminated on September 13 for government bonds. It had been eliminated f...

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Labor and Credit Markets Do Not Favor Consumption
BRAZIL ECONOMICS - Report 13 Sep 2013

Last week the data for August on the labor and credit markets were announced. The indications on both counts are that the growth of consumption will continue being lethargic.

In August the unemployment rate fell to 5.3% in the seasonally adjusted series, but this does not mean the job ...

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Ksenia Yudaeva Appointed to be First Deputy CBR Governor
RUSSIA ENERGY / FINANCE - In Brief 12 Sep 2013
Ksenia Yudaeva, a prominent Russian economist, will oversee monetary policy as First deputy CBR governor. The position was vacant after Alexey Ulyukaev has left the post to become Minister for Economic Development in the government. Previously Ms Yudaeva was a head of head of the presidential adm...

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Unchanged Monetary Policy Stance
PHILIPPINES - In Brief 12 Sep 2013
Amidst greater financial market volatility and fund outflows from emerging markets, the Monetary Board of the BSP kept its overnight and special deposit account rates unchanged today.  The decision to maintain the overnight borrowing and lending rates at 3.5% and 5.5%, respectively and the S...

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Retail Sales: Better Growth Than Expected
BRAZIL ECONOMICS - Report 12 Sep 2013

Real retail sales in July grew 1.9% in the restricted sense and 0.6% in the augmented concept, which includes cars and construction materials (Graph 1). The respective variations over the past 12 months were 6.0% and 3.7%. One of the reasons for the surprising result was the strong sales of fu...

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Mexico's Expected Fiscal Reform
MEXICO - Report 12 Sep 2013

Executive Summary

The most significant news last week included the surprising rate cut announced by Mexico’s central bank on Friday. Banco de Mexico lowered its benchmark lending rate by 25 basis points to 3.75%, the lowest level since the key rate was introduced in early 2008. The ...

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Dilma’s Approval Rating Remains Stable
BRAZIL POLITICS - Report 11 Sep 2013

On Tuesday, September 10, CNT/MDA released a new poll on the approval rating of the Dilma Rousseff administration, conducted between August 31 and September 4. Approval of her government increased from 31.1% to 38.1% (7 percentage points). The CNT poll shows that the president’s popularity ha...

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Peace for Another Time?
PHILIPPINES - In Brief 10 Sep 2013
In our Quarterly Report ("In a good place," Aug.. 8, 2013), we said that "bringing the Moro National Liberation Front (MNLF) fully into the fold" is a key activity for meeting a tight timetable for the peace process in Mindanao and the creation of a  Bangsamoro political entity before the en...

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The Current Account Deficit Deteriorated in the Second Quarter of 2013
SOUTH AFRICA - Report 10 Sep 2013

Figures released today by the South African Reserve Bank (SARB) show that the current account balance deteriorated in the second quarter of 2013 (Q2 2013). The deficit on the current account increased from R190.9 billion in Q1 2013 to R216.2 billion in Q2 2013, partly due to weak export growth...

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Government, stocks drive Q2 growth
TURKEY - Report 10 Sep 2013

Today’s Q2 GDP growth came in at 4.4%, y/y, which was higher than the consensus forecast of some 3.5%, and our even softer estimate of 2.5%. Growth was driven by private consumption, government spending (notably investment) and inventory build-up, all of which turned out fairly stronger than o...

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A Note on PKK and Gezi Parki Demonstrations
TURKEY - In Brief 10 Sep 2013
PKK suspended the withdrawal of its guerilla force from Turkey, accusing AKP of planning a war on Kurds. Essentially, the Peace Process is dead.  AKP’s much-advertised reform package is delayed and is unlikely to satisfy even the minimum of Kurdish demands. I don't expect a return to insurge...