Market

As the rupiah hits Asian crisis lows, Indonesia steps in.
25Mar mmBy Walter ParezNo Comments
Asia, Market, World

As the rupiah hits Asian crisis lows, Indonesia steps in.

Indonesia's central bank stepped into the currency market to defend the rupiah on Tuesday (Mar 25), as growing concerns over politics, government spending and capital flight pushed the rupiah to its lowest levels since the Asian financial crisis. The rupiah weakened as much as 0.54 per cent to a low of 16,640 rupiah per dollar in morning trade, extending a slide that has been driven by global market uncertainties and concerns over Indonesia's fiscal health and growth outlook. A central bank official told Reuters that Bank Indonesia (BI) had intervened in the spot currency, bond markets and in domestic non-deliverable forwards as the rupiah careened towards its lowest point in 25 years. Its all-time low was 16,800 rupiah per dollar in June 1998 during the Asian Financial Crisis, a...
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Turkey rushes to halt the financial disaster
24Mar mmBy Walter ParezNo Comments
Market, World

Turkey rushes to halt the financial disaster

Turkey’s financial authorities scrambled Monday to stop a rout in the currency and stock market, after the country lurched toward a full-blown political crisis at the weekend with the imprisonment of a rival to President Reçep Tayyip Erdoğan. The lira fell nearly 2 percent against the dollar and the government bond market was also hit by heavy selling as markets reopened after the weekend, but by midday there were signs that emergency measures from the Central Bank of Turkey (TCMB) and stock exchange regulator (SPK) had contained the fallout, at least in the short term. Turkey’s currency had slumped to a new all-time low against the dollar and euro last week after Istanbul Mayor Ekrem İmamoğlu — the man who was set to challenge Erdoğan for the presidency at the next election in 2028...
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Global Debt Crisis
22Mar mmBy Walter ParezNo Comments
Market, World

Global Debt Crisis

“The Romans had a god named Janus – deity of thresholds, beginnings, and transitions, famously depicted with two faces, one looking back, the other forward. Debt management demands that same duality. Like that ancient god, we too must look in two directions at once: backward at the debts we’ve accumulated, and forward to the futures they will shape,” said UN Trade and Development (UNCTAD) chief Rebeca Grynspan in her opening remarks at UN organised 14th International Debt Management Conference last week in Geneva. A perfect illustration showcasing that debt management requires countries to balance their past borrowings with the impact they will have on the future. Several developing nations are currently struggling with a severe debt crisis. UNCTAD Report indicates that in 2023, their ...
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Amid a migration and economic crisis, the president of Tunisia fires the prime minister.
21Mar mmBy Walter ParezNo Comments
Market, World

Amid a migration and economic crisis, the president of Tunisia fires the prime minister.

Tunisian President Kais Saied sacked Prime Minister Kamel Maddouri less than a year after his appointment amid a faltering economy and a growing number of migrants arriving from countries in sub-Saharan Africa. Maddouri was replaced by Sara Zaafarani, who is an engineer and has been minister of equipment and housing since 2021. She is Tunisia's third prime minister in less than two years. In recent months, Saied has sharply criticised the performance of ministers, saying many have not met the required standards and that the expectations of the Tunisian people are high. Last month, he sacked Finance Minister Sihem Boughdiri. In a meeting broadcast on the presidency's Facebook page, Saied called on Zaafarani "to further coordinate government action and overcome obstacles to meet th...
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China’s Debt to Africa: A Balancing Act Between Development and Dependency
8Mar mmBy Walter ParezNo Comments
China, Market

China’s Debt to Africa: A Balancing Act Between Development and Dependency

China’s financial engagement with Africa has increased significantly over the past few decades, making it one of the continent’s most influential economic partners. This relationship, characterized by extensive loans and investments, has fuelled infrastructure development across Africa but has also sparked intense debate over the risks associated with rising debt levels. Critics warn of potential economic dependency and “debt-trap diplomacy,” while proponents argue that Chinese financing has been a crucial driver of Africa’s modernization. As of 2020, Chinese lenders accounted for approximately 12% of Africa’s external debt, which had grown more than fivefold since 2000, reaching $696 billion. Between 2000 and 2023, Chinese financial institutions extended 1,306 loans, to...
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China Rejects Pakistan’s $2 Billion Loan
8Mar mmBy Walter ParezNo Comments
China, Market

China Rejects Pakistan’s $2 Billion Loan

China rolled over a $2 billion loan to Pakistan, the adviser to the finance minister of Pakistan, Khurram Schehzad, told Reuters in a text message on Saturday. Pakistan is working to strengthen its finances after securing a $7 billion International Monetary Fund bailout in September 2024. The first installment of the loan is currently under review, and if successful, Pakistan will receive an additional $1 billion. Securing external financing has previously been a key condition for the IMF to approve bail-out deals for the cash-strapped nation. The South Asian nation needs to repay over $22 billion in external debt in fiscal year 2025, including nearly $13 billion in bilateral deposits, Fitch said
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Everything Regarding the 2018 Italian Economic Crisis
4Mar mmBy Walter ParezNo Comments
Market, World

Everything Regarding the 2018 Italian Economic Crisis

The eurozone, also called the euro area, is a union of 20 European Union member states that have officially adopted the euro as their primary currency and sole legal tender. These member states exist under one monetary authority, the Eurosystem. At the beginning of 2018, Italy was the third-largest economy in the currency bloc. When Italy entered into a deep political and economic crisis, it was a concern for the European Union (EU) and the global markets. At the time, Italy accounted for 11% of the EU's gross domestic product (GDP). At the end of September 2018, the ruling coalition comprising the Five Star Movement (M5S)—a political party that espoused a populist, anti-establishment view (and was critical of the EU)—and the Lega Nord—also a political party in Italy—submitted their...
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China is expected to experience a protracted slump.
4Mar mmBy Walter ParezNo Comments
China, Market

China is expected to experience a protracted slump.

The risk of China spiralling into an unprecedentedly prolonged recession is increasing. Its economy is experiencing deflation, with the price level falling for a second consecutive year in 2024, according to recent data from the National Bureau of Statistics of China. It’s on track for the longest period of economy-wide price declines since the 1960s. Coupled with the collapse of the property sector, a looming trade war with the United States and demographic and debt overhang challenges, much of the Chinese public has lost confidence in the economy and its leadership. The country has the ingredients for a recession, and not a short one. It has spent too much on investment and needs to turn to consumption as a source of demand, but people are unwilling to spend. They have long had...
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China might collapse due to a trade war. For Beijing, Trump’s timing couldn’t be worse.
5Feb mmBy Walter ParezNo Comments
China, Market

China might collapse due to a trade war. For Beijing, Trump’s timing couldn’t be worse.

Even though it is Chinese New Year this week, Beijing has wasted no time in hitting back at Trump’s additional 10% tariff on all US imports from China. For now, though, this remains a mere skirmish, yet to escalate into a full-blown trade war — it could yet lead to some sort of negotiation and agreement. We’ve seen this already in Mexico and Canada. The risk, though, is that while these north American countries are neighbours and supposedly America’s allies, China is a strategic adversary. Trade conflict is a symptom of deeper political and economic tensions. The problem for China is that its economy is not well positioned to weather a new major external shock.For now, a 10% tariff increase would have a minor impact, maybe subtracting about 0.2% from Chinese GDP in 2025 — a fairly trivial...
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Singapore becomes a haven for companies and investors fleeing tensions between the US and China.
24Jan mmBy Brian ThompsonNo Comments
China, Market, Singapore, USA

Singapore becomes a haven for companies and investors fleeing tensions between the US and China.

Its reputation of political neutrality — and strength in life sciences — is making Singapore a favoured launchpad for western investors and Chinese startups. Two years ago, Polaris Partners, the investment arm of US pharmaceutical company Polaris, opened an office in Singapore as it started to ramp up investments in the Asian country. “Singapore has an extraordinary ecosystem,” says Amy Schulman, managing partner at Polaris Partners. “It has first rate science that gets a good amount of government support. It has terrific intellectual property protection, and it has organised rule of law system that makes things very appealing.” Singapore’s favourable tax system and English-speaking business community have also made it an ideal jumping off point for international companies se...
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