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At today's meeting the Monetary Policy Committee (MPC) cut the one-week repo rate (policy rate) by 250 bps to 14% down from 16.5%, bringing the cumulative cuts over the past three meetings to 1000 bps, which takes the policy rate down to its lowest level since May 2018 (see chart below). Today’s ...

The NBU cuts rate by 100 bps down to 15.5%

UKRAINE · In Brief · 24 Oct 2019

The NBU Board approved policy rate cut by 100 basic points down to 15.5%. Disinflation trend, strong hryvniaas well as encouraging news around Privatbank issue are behind this decision. Initially, the NBU Head Yakiv Smoliy has been defending gradual policy rate cut by 50 bps on every step. But gr...

South Africa’s main opposition party in a leadership crisis as three leaders resign in one week

SOUTH AFRICA · Report · 24 Oct 2019

South Africa’s main opposition party is the Democratic Alliance (DA), and yesterday its leader, Mmusi Maimane, resigned as party leader. His resignation follows this week’s earlier resignation by DA’s Herman Mashaba as mayor of Johannesburg (the country’s most prosperous region), of which the DA ...

Minister of Finance resigns

CENTRAL AMERICA · In Brief · 23 Oct 2019 · 1 response

The Finance Minister Ms. Rocio Aguilar resigned irrevocably today. Her resignation is not surprising for us. We have been criticizing the government ambivalence in several specific issues related to fiscal discipline and the principles promoted and defended by Ms. Aguilar. Two events were announc...

Strong message from President Office: no revisions on Privat

UKRAINE · In Brief · 23 Oct 2019

We have the most awaited news of the recent months. President Office, finally, stated openly that “…there is no reason to return the state-owned PrivatBank to its former shareholders”. Here is the statement.It took incredibly long for Zelenskiy to formulate this wording. And the most symbolic thi...

CHILE: Piñera's offer. Too little, too late?

CHILE · In Brief · 23 Oct 2019

President Sebastián Piñera took to national television on Tuesday night to announce a series of measures that seek to do two things; to respond to the demands of protesters who have been on the streets since last Friday, and to save his skin. Whether he succeeded is not, at this point, entirely c...

Sochi Agreement: Conventional wisdom is dead wrong, but markets are probably right

TURKEY · In Brief · 23 Oct 2019

I intended to pen this Market Brief much earlier in the day, but the commentary on the Sochi agreement between Presidents Putin and Erdogan is so contrary to how I interpret it, I had to do serious fact checking to make sure my convictions would stand the scrutiny and respect of my audience. At t...

Gulf support likely if Lebanon's budget mollifies other donors

GULF COUNTRIES · Report · 22 Oct 2019

The cabinet approval of an ambitious 2020 budget is an important step but it still needs parliamentary approval and many details remain unclear, particularly on cutting interest on local debt. Its proposal to cut the deficit by 10 percentage to -0.6% of GDP is unrealistic but even going half this...

Macroeconomic conditions and update on the current financial stress situation

INDIA · Report · 22 Oct 2019

Values of +10% for the coincident indicator indicate a big boom in activity. The latest value, for Apr-Jun 2019, shows -1.93%. The leading indicator has deteriorated sharply. The latest value, for Jul-Sep 2019, shows -14%. (The units are not comparable with those of the coincident indicator). ...

No policy change from the MNB today, with a little footnote

HUNGARY · In Brief · 22 Oct 2019

The October rate-setting meeting of the Monetary Council, held today, did not produce any change in interest rates and other MNB policies, or in the evaluation given by the Council's post-meeting statement. This was just as expected: indeed, it would have been rather surprising if the Council cha...

A fat tail

PHILIPPINES · In Brief · 22 Oct 2019

In our conference call last July, we spoke of necropolitics and the tail risk of the death of the President in office. Long-rumored to be sick, the 74-year old President reportedly fell off his motorbike last Thursday, felt well enough to go to Japan to attend the enthronement of the emperor toda...

Hopes for an economic rally rise

UKRAINE · Forecast · 22 Oct 2019

People are calling the new Verkhovna Rada the “green (or mad) printer”: green for the Sluha Narodu’s party colors, and printer due to the speed at which this legislature is spitting out bills. Debates over legislation are very brief and largely token, which means that Ukraine will likely discover...

Oslo talks, uncertainty, and sanctions will continue

VENEZUELA · Report · 22 Oct 2019

After two months of silence, the regime seems to have presented a counteroffer to Norwegian diplomats mediating Venezuelan regime–opposition talks. The details aren’t public, but it’s likely that it follows the agreement the regime reached with the four minority ‘loyal” opposition parties. That a...

Essential CIS Politics: October 2019

RUSSIA / FSU POLITICS · Report · 21 Oct 2019

The Russian economy is growing only very modestly, but public finances are sound. The Ukrainian conflict has slowed down, and Kyiv and Moscow have agreed to the Steinmeier Formula, which has caused protests in Ukraine. Belarus and Russia have agreed in principle to tangible progress on reunificat...

Low risk of alteration in the Pension Reform proposal and other weekly topics

BRAZIL POLITICS · Report · 21 Oct 2019

President Bolsonaro will spend the week travelling through Asia and the Middle East. The Senate votes on the second round of Pension Reform. The government has promised to announce a post-Pension Reform agenda on Wednesday, October 23. The STF discusses arrests following conviction by a higher co...