GlobalSource Partners | Country Insights

The markets were taken by surprise with the Fed’s decision to maintain the pace of asset purchases. US Treasury rates immediately fell, with the 10-year bond closing last week at 2.73% after having reached 2.99% before the meeting. Internationally, there was an immediate reversal in the behavior ...

Weekly Tracker: September 22-28

TURKEY · Report · 22 Sep 2013

Executive Summary If the Turkish press is to be believed, the Reform Package to be unveiled on the final day of September will contain concrete human rights reforms. The Kurdish actors already denounced the reform efforts. They now want PKK leader Ocalan to be bestowed with the status of official...

RBI Statement Failed to Reduce Uncertainty

INDIA · Report · 20 Sep 2013

Today RBI said they will: reduce the marginal standing facility (MSF) rate by 75 basis points from 10.25 per cent to 9.5 per cent with immediate effect;reduce the minimum daily maintenance of the cash reserve ratio (CRR) from 99 per cent of the requirement to 95 per cent effective from the fortni...

Lots of Talk, Little Action

VENEZUELA · Report · 20 Sep 2013

Executive Summary The government sorely needs to adopt credible and sustainable policies to stabilize exchange rates, prices, and expectations. An immediate priority is to patch up the exchange rate regime. The administration is planning to set up a new foreign exchange mechanism to run alongside...

PSB Exits The Allied Base

BRAZIL POLITICS · Report · 19 Sep 2013

The Brazilian Socialist Party (PSB) announced on September 18 that it is delivering all posts it occupied in the Dilma Rousseff (PT) administration. The PSB occupied the Ministry of National Integration, the Secretariat of Ports, three directorships in the Development Company for the São Francisc...

The Benchmark Interest Rate Remains Unchanged

SOUTH AFRICA · Report · 19 Sep 2013

Today’s decision by the Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) continues a period of no change in the benchmark interest rate. Cognizant of the upside nature of inflationary risks and the underlying hesitant economic recovery in South Africa, the MPC kept the rep...

Regressive Pitfalls of Tax Reform

MEXICO · Report · 18 Sep 2013

Executive Summary The government of President Enrique Peña Nieto unveiled its budget proposals for 2014 along with closely related pieces of legislation that imply major changes to tax and fiscal policy while greatly expanding social security coverage. The stated purpose of such a reform would be...

Clearing Another Hurdle

MEXICO · Report · 18 Sep 2013

Executive Summary In the run-up to the official Mexican Independence Day Celebrations, which traditionally center on Mexico City’s main square, the government reached an agreement with the main organization of teachers to dismantle the protest encampment they have maintained for many weeks in the...

An uneventful MPC, as expected

TURKEY · Report · 17 Sep 2013

As expected, the MPC kept all rates unchanged today (see graph), while its assessment of the economy (e.g., mild recovery in domestic demand, a contained CAD thanks to current policy framework) was also broadly unchanged. The Bank chose not to alter the F/X ratios (that would help to transfer som...

Political Insights

BRAZIL POLITICS · Report · 16 Sep 2013

An intense week of political negotiation ahead: The National Congress analyzes President Dilma’s vetoes, with the government’s effort focused on sustaining the veto on the end of the 10% fine on the FGTS in case of unfair dismissal. The STF decides on the possibility of a new trial for 12 of the ...

Thanks, Mr. President

PERU · Report · 16 Sep 2013

Executive Summary President Ollanta Humala’s announcement that “the crisis has arrived” depressed confidence in Peru—according to a recent poll, 61% of Peruvians think the country is already in economic crisis. So the government’s main near-term task is to avoid hitting the brakes too hard. Unfor...

Noise in the Economic Activity Indicators

BRAZIL ECONOMICS · Report · 16 Sep 2013

The extreme volatility of the data lately has been hampering the task of gauging the economic activity trend. In previous reports we have already indicated this has been happening with the figures on industrial production, where the monthly variations in recent months have been alternating betwee...

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”.Against thi...

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 and give Kurds what they...

Overkill

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 again to risks ...