Juan Jose Echavarria, the new Governor of Colombia’s Central Bank, has come into the job at a time of uncertainty for global markets. With inflationary pressures simmering, countered by the need to boost growth through tightening, Bonds & Loans asked the country’s top banker about the legacy he has inherited and how the Bank plans to navigate the challenging economic landscape ahead.
Argentina, Latin America’s third largest economy, came roaring back to the markets in 2016 after a 15-year hiatus following its historic default on US$95bn of debt, and the first months of 2017 has shown few signs of deal flow letting up. But some investors are growing increasingly concerned that softer than expected growth and persistently high inflation may threaten the ability of Argentinian entities to repay investors.
While it's still a long way off, we believe markets will become increasingly focused on Mexico's July 1st 2018 presidential elections. Of note, in Mexico’s electoral system one need only win a plurality of the vote in a single round.
The government is making efforts to correct past economic mistakes and advance the reforms, seeking to stabilize the macroeconomic environment. For some observers, the strategy is just another mistake, while for others it is insufficient, since a healthy macroeconomic environment does not guarantee sustained growth. But it is the foundation. We may be surprised by the results of efforts to stabilise the economy.
Nigeria’s economy was hit hard in 2016 as the naira tumbled and revenues from oil imports dwindled, the result of a dramatic shift in monetary policy and persistently low oil prices, respectively. We speak with Access Bank CFO Seyi Kumapayi about the bank’s landmark bond sale in this challenging landscape.
Since the attempted military coup in July last year, Turkey’s political turmoil has caused significant damage to its economic stability. A systemic purge of opposing views in policy making has intensified tensions within society and security risks have heightened, unsettling investor confidence and weighing on already subdued economic activity while pushing the lira to record lows in the first few weeks of the new year.
As one of the worst-performing economies in the MENA region last year moves down the path of recovery, skyrocketing inflation is pounding the country’s impoverished population. Nevertheless, following the approval of an IMF loan tranche in November, subtle signs of an upturn are encouraging.
Emerging market debt took a significant hit after the surprising victory of Donald Trump last November, which was followed by a US interest rate hike weeks later. Concern over the President-Elect’s protectionist policies provoked capital outflows and a significant spike in borrowing costs for US-linked EMs, freezing almost US$10bn worth bonds that were supposed to be issued by Latin American corporations at the end of 2016. Those deals have come roaring back.
Divisive politics and persistently low energy prices will cast a pall over the entire Andean region in 2017, even while each country within the region represents a unique storyline for investors. The lack of political unity in each Andean market is further challenged by a global environment that has turned hostile with rising interest rates, depressed commodity prices and anti-trade rhetoric proliferating in the US and Western Europe.
- Capital Outflows Threaten China’s Transition to Demand-Driven Model
- Mexico Central Bank Intervenes as Peso Drops Amid Trump Woes
- Venezuela Raises Eyebrows with Surprise US$5bn International Bond
- BRAZIL: Sharpening the Instruments to Break the Vicious Circle
- Volatility Subsides but Hedging Products Still on the Menu in Russia
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