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The NBU Board left the prime rate unchanged at 8.5%. The decision went in line with the consensus forecast. At its last communication in September the NBU made it clear that a further prime rate increase is highly undesirable. The market reflected this message at the consensus forecast despite th...

The CBRT follows orders, as expected

TURKEY · In Brief · 21 Oct 2021

Writing belatedly here because of a prior commitment. There is really not much to add to what my colleague Atilla already said, but here are a few thoughts for the record. The cut was more than what the consensus – around 50 bps -- expected, but after the final round of changes at the CBRT, that ...

The emergency aid issue remains unresolved, the Auxílio Brasil program should start in November, and Senator Calheiros's final report should not cause any short-term issues for Bolsonaro

BRAZIL POLITICS · Report · 21 Oct 2021

According to the President, no family will receive less than R$ 400. The payments from Auxílio Brasil should have a positive impact on President Jair Bolsonaro's popularity among those in extreme poverty. However, inflation, the fuel issue, the water crisis and the lower growth of the economy may...

President Castillo reshuffles Cabinet; real GDP growth forecast revised up

PERU · Report · 21 Oct 2021

President Pedro Castillo reshuffled his Cabinet on October 6th. This followed a two-month period in which Castillo’s main challenges have originated in his own Cabinet, especially among representatives of his Perú Libre party, and the party’s head, pro-Cuban left-wing radical Vladimir Cerrón. Whi...

More key rate hikes as inflation accelerate

RUSSIA ECONOMICS · In Brief · 21 Oct 2021 · 1 response

According to Rosstat, in seven days to October 18, inflation w-o-w reached 0.26%, having accelerated from 0.22% seen in the preceding seven days. Inflation MTD reached 0.63% in eighteen days of October (5.98% YTD). Consumer price inflation beat all earlier expectations and is likely to be at leas...

CBRT rate decision: First impressions

TURKEY · In Brief · 21 Oct 2021

CBRT MPC just announced a 200 basis point rate cut, lowering the main policy rate to 16%. Depending on the survey, consensus was 50 basis points, though several participants didn’t exclude100 basis point rate cut. These are views of the Politics Author, and his alter ego Cosmic Strategist regardi...

China’s growth strategy

CHINA ADVISORY · Report · 21 Oct 2021

The harsh restrictions on the property sector have thrown in doubt the primary growth engine for the Chinese economy. The Politburo has three choices: reinflate the property market, accept radically lower growth, or switch to a new growth driver. Can China find a new source of economic growth to ...

Ukraine anti-oligarch law running into trouble

RUSSIA / FSU POLITICS · In Brief · 21 Oct 2021

On October 15 the head of the National Security and Defense Council told the press that 108 innocent people were on the sanctions list designed to hurt so-called "thieves in law". There are over 500 people on the list, and 400 of them remain on it. It was announced that 8 people who wrote the lis...

Non-working week in Russia to slow coronavirus

RUSSIA / FSU POLITICS · In Brief · 21 Oct 2021

On October 20 Putin approved October 30 to November 7 as time for non-essential workers to stay at home. People are dying of coronavirus at a rate of over 1,000 a day. The non-working week is up to the regions to implement or ignore. The federal government can alter the functioning of cultural an...

The government would like to increase the value of the Auxílio Brasil payments until December 2022, Senator Renan Calheiros should submit his final report on the Pandemic CPI, and the CPPI approved the modeling of the privatization of Eletrobras

BRAZIL POLITICS · Report · 20 Oct 2021

The government had planned on launching the Auxílio Brasil program yesterday but ended up postponing it. The rapporteur of the provisional measure that created the program made it clear that he disagrees with a temporary increase in the value of the payments. The government is planning on increas...

Volatility is everywhere

CHILE · Report · 20 Oct 2021 · 1 response

The Monthly Index of Economic Activity (IMACEC) in August again surprised on the upside. We are facing a level of activity unlikely to be sustainable in the long term, and which will continue to exert inflationary pressures. Consumption has played a central role in increasing demand, as a result ...

Central Asia faces winter of fuel and food shortages

RUSSIA / FSU POLITICS · In Brief · 19 Oct 2021

It has started snowing in Central Asia. Kyrgyzstan and Uzbekistan are using more coal than before for heating.Kyrgyzstan relies on hydropower. A drought in 2021 means water levels are so low that little electricity is generated by dams. National Energy Holding Company said that there will be rest...

The MNB tightened again, but government speakers stole the show

HUNGARY · In Brief · 19 Oct 2021

At its regular monthly rate-setting meeting, the Monetary Council caused no surprise, in the sense that it did exactly what it previously said it would do. It raised the base rate and the two ends of the interest rate corridor by another 15 bps, making the base rate 1.8% and the total rate hike 1...

Russia suspends its mission to NATO

RUSSIA / FSU POLITICS · In Brief · 19 Oct 2021

Earlier in October 2021 NATO expelled 8 Russian diplomats. NATO accused them of being undeclared intelligence officers. On October 18 Moscow's riposte was to withdraw its delegation temporarily. The move will take effect from November 1.Russia temporarily withdrew its ambassador to the USA earlie...

Pressure is building for the financing of the Auxílio Brasil program, truck drivers demand a solution to the fuel price issue, and the Special Committee on the court-ordered payments PEC meets today to vote on the rapporteur’s report

BRAZIL POLITICS · Report · 19 Oct 2021

President Jair Bolsonaro said he will make decisions on the emergency aid program and the diesel issues later this week. The economic team supports approving the court-ordered payments PEC and the income tax bill to make room for the Auxílio Brasil program. Financing of the Auxílio Brasil program...