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Twin terror may spell reelections Turkey suddenly became the target of PKK and ISIS, as the former escalated attacks against police and alleged members of Islamist organizations, while the latter attacked Turkish NCOs at the border. As I write these lines, Turkish F16s had just struck ISIS target...

Ukraine is expected to pay $120 million coupon today

UKRAINE · In Brief · 24 Jul 2015

Scarce information is available on negotiations with creditors. What we know is that no agreement was reached so far while the IMF promised to pay money whatever happens on debt operations. In this context the main question was whether Finance Ministry will dare to impose moratorium on debt repay...

Hopeful Wait for Disinflation Continues

TURKEY · Report · 23 Jul 2015

The Monetary Policy Committee left all key short-term rates unchanged as expected today – one-week repo rate at 7.5% and the O/N lending and borrowing rates at 10.75% and 7.25%, respectively (see chart). The content of the statement is exactly the same with the previous one except for one minor m...

The Benchmark Interest Rate Goes Up

SOUTH AFRICA · Report · 23 Jul 2015

The South African Reserve Bank (SARB)’s Monetary Policy Committee (MPC) decided to increase the repo rate from 5.75 to 6.0% per year, effective Friday, July 24, 2015 (see Graph 1). Graph 1 Repo rate, South Africa, Jul ’13 – Jul ‘15 Source: SARB and PAIRS Today’s MPC decision appears to be largely...

The MNB reduced the base rate but also ended its recent easing cycle on July 21

HUNGARY · In Brief · 22 Jul 2015

In our monthly report of July, we predicted that at the Monetary Council's next meeting, the MNB would end its most recent series of base rate cuts, which was started in March from 2.1% and was carried out in 15 bps steps over four consecutive months since then. This was in the face of an average...

Politics: An Unforgivable Mistake

MEXICO · Report · 22 Jul 2015

Executive Summary When Mexico’s most famous drug kingpin and high-security prisoner broke out of the country’s top maximum security facility, it was just the latest example of how much a culture of government corruption and official indifference has left the entire criminal justice system vulnera...

Economics: Household Income and Spending

MEXICO · Report · 22 Jul 2015

Executive Summary Last week’s report on the National Survey of Household Income and Spending for 2014, which tracks general totals as well as the origin and distribution of such income and spending, showed that current monetary incomes fell 3.1% including transfers, and 0.9% without transfers. In...

Dilma Rousseff Administration

BRAZIL POLITICS · Report · 22 Jul 2015

CNT/MDA:Considerable wear on the image of Dilma and Lula The CNT/MDA poll released yesterday presents a worrisome scenario for the Planalto: Disapproval of the Dilma Rousseff administration has surpassed 70%, while only 7.7% evaluate it positively, confirming the trend anticipated by Ibope – appr...

Growth Slows Amid Loss of Confidence

ECUADOR · Report · 22 Jul 2015

Executive SummaryEcuadorians are already seeing the painful effects of falling oil prices. Though Q1 economic growth was 3% y/y, but it was down 0.5% from Q4 2014, deepening the downtrend that started in 2013. Household consumption fell 0.57% q/q, government consumption by 1.7%, and gross capital...

Medina Commands Wide Lead, Controversies and All

DOMINICAN REPUBLIC · Report · 21 Jul 2015

Executive Summary Inflation is returning to normal, after a period in negative territory as oil prices declined. Inflation in June was 0.41%, up from 0.29% in May. Yet low inflation in the first four months of 2015 will keep the annual figure very low. Monetary authorities continue to pursue a po...

Terror and coalition

TURKEY · In Brief · 21 Jul 2015

I apologize for delaying this update on the horrific terror attack in the town of Suruc, Sanliurfa Province, only miles away from the Syrian border, to cover Tuesday’s AKP-CHP meeting, as well. The terror attack confirms what has been claimed in our Weekly Trackers many times: Turkey has become p...

The Recession Deepens

BRAZIL ECONOMICS · Report · 21 Jul 2015

A new set of information published last week confirms that GDP in 2015 will contract by around 2% (or a bit more). Although the IBC-Br for May remained stable (after a decline of 0.9% in the previous month), the carry-over to the second quarter indicates a dip of 1.6% (or 6.4% in annualized terms...

Annual Ramadan Pilgrimage

INDONESIA · Report · 21 Jul 2015

Executive Summary In June and July, the Indonesian economy started to move higher, driven principally by the season of the Muslim fasting month of Ramadan. At the same time, the more extensive implementation of government spending now taking place can also drive the economy faster. Ramadan has...

Week of July 20

BRAZIL POLITICS · Report · 20 Jul 2015

President Dilma Rousseff has until Wednesday to explain the “2014 Fiscal Maneuvers” to the TCU. The report on expenses and revenue, which is expected confirm the government’s difficulties in meeting the primary surplus goal for 2015, will also be released. A presidential veto of the salary increa...

Weekly Tracker: July 19-25

TURKEY · Report · 19 Jul 2015

Executive Summary PM Davutoglu’s visit to MHP and HDP failed to produce viable coalition partners, but CHP appeared willing, with many experts claiming that trust has been established between the two parties.AKP and CHP set up a joint exploratory committee to negotiate the nuts and bolts of the c...