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☆ Economic asphyxiation puts Russia in China’s orbit
▼ + stars: | 2023-03-20 | by ( Pierre Briancon | ) www.reuters.com time to read: +7 min

Cut off from foreign markets by sanctions, Vladimir Putin’s government is at pains to finance budget deficits that would have been manageable in peacetime. The financial difficulties are pushing Russia further into the sphere of influence of China’s President Xi Jinping, who visits Moscow this week. Dipping into the fund, though, will push Moscow further into China’s financial orbit, Russian economist Alexandra Prokopenko has noted. In the short term, financial hope for Russia can only come from a significant increase in oil and gas prices. Trade between China and Russia increased by 34% last year as Chinese imports of oil and gas jumped 50%.

Some industry executives said the central bank should prioritize financial stability now. “Go fast and hard on financial stability; go gradual and slow on price stability,” said Peter Orszag, chief executive of financial advisory at investment bank Lazard Ltd (LAZ.N). The central bank declined to comment. Others have joined in, with the European Central Bank raising rates by 50 basis points earlier this week. The events this past week correspond to a 1.5% increase in the Fed funds rate, Slok wrote.

☆ IDB Invest, Banco de Bogota announce $230 mln sustainability bond
▼ + stars: | 2023-03-17 | by ( ) www.reuters.com time to read: +2 min

March 17 (Reuters) - The private investment arm of the Inter-American Development Bank's parent group on Friday announced alongside Colombia's Banco de Bogota the issue of a sustainability bond worth $230 million funding social and climate projects. Sustainability bonds are a form of debt instrument in which the proceeds are used to finance or re-finance a combination of both green and social projects. Banco de Bogota will use the funds to finance a portfolio of micro, small and medium-sized enterprises led and owned by women, it added, as well as low-income and priority housing. The Washington-based Inter-American Development Bank, along with its subsidiaries, is among the top providers of development finance in Latin America. IDB Invest said the funds generated by the new sustainability bond will also be used to pay for green buildings, renewable energy, energy efficiency projects, circular economy and sustainable agriculture.

☆ SVB Crisis Tests India’s New Finance Hub Potential
▼ + stars: | 2023-03-17 | by ( Megha Mandavia | ) www.wsj.com time to read: +1 min

Many Indian startups rushed this week to open new bank accounts in India’s Gujarat International Finance Tec-City, known as GIFT city. The swift collapse of Silicon Valley Bank has cast an aspiring Indian finance center into sudden relief. India, which has long been a bit player in global finance, has a chance to boost its role—but only if it moves swiftly to rectify some regulatory barriers. This week, many Indian startups rushed to open new bank accounts in India’s Gujarat International Finance Tec-City, known as GIFT city, once they regained access to their SVB deposits. Accounts set up within the hub’s International Financial Services Center, or IFSC, are free of India’s stringent capital controls since the funds are held in U.S. dollars.

☆ Stocks making the biggest moves premarket: Credit Suisse, Lennar, PacWest & more
▼ + stars: | 2023-03-15 | by ( Pia Singh | ) www.cnbc.com time to read: +2 min

Axel Lehmann, chairman at Credit Suisse Group AG, speaks during the Institute of International Finance (IIF) annual membership meeting in Washington, DC, on Friday, Oct. 14, 2022. Credit Suisse — Shares of Credit Suisse were down 21.5% after the firm's biggest backer, Saudi National Bank, said it won't provide it with further financial help. Credit Suisse and several other European banks, including Societe Generale , Italy's Monte dei Paschi and UniCredit , were halted from trading as prices plummeted. Bank of America , Morgan Stanley , Wells Fargo — Shares of larger financials were in lower early Wednesday as the Credit Suisse tumble sent ripples across the global banking sector. Bank of America lost 2.9%, Morgan Stanley dropped 3.2% and Wells Fargo declined by nearly 4.2%.

☆ Analysis: China paves Sri Lanka's way to IMF funds, but debt talks remain uncertain
▼ + stars: | 2023-03-08 | by ( Jorgelina Do Rosario | ) www.reuters.com time to read: +4 min

Cash-strapped nations such as Zambia and Ghana are also facing talks on reworking debt with Chinese lenders, and Sri Lanka's negotiations showed that international efforts to standardize some debt rework parameters are failing. China is the biggest bilateral creditor to Sri Lanka, which defaulted on its international debt last year. Sri Lanka owed China's EXIM $4.1 billion, or 11% of the country's foreign currency debt, at the end of 2022, according to government data. Reuters GraphicsBOARD APPROVAL VS DEBT DEALAn executive board approval unlocks IMF financing, though it doesn't necessarily mean it will expedite debt talks. Once the executive board approval is secured, the IMF will publish Sri Lanka's debt sustainability analysis.

☆ BlackRock says the Federal Reserve could hike interest rates to a peak of 6%
▼ + stars: | 2023-03-08 | by ( Jihye Lee | ) www.cnbc.com time to read: +1 min

Rick Rieder, managing director and chief investment officer of fundamental fixed income for BlackRock Inc., speaks during the Institute of International Finance Annual Membership Meeting in Washington, D.C., U.S., on Friday, Oct. 11, 2013. The world's largest asset manager sees the U.S. federal funds rate peaking at 6% after Fed Chair Jerome Powell warned interest rates are likely to head higher than the central bank previously expected. "We think there's a reasonable chance that the Fed will have to bring the Fed Funds rate to 6%, and then keep it there for an extended period to slow the economy and get inflation down to near 2%," BlackRock's chief investment officer of global fixed income Rick Rieder wrote in response to Powell's testimony before the Senate Banking Committee on Tuesday. The economy is more resilient than expected, Rieder said, pointing to the most recent jobs report and consumer price index reading. "This is partly due to the fact that today's economy is no longer as interest-rate sensitive as that of past decades, and its resilience, while a virtue, does complicate matters for the Fed," he wrote in the note.

☆ Sao Paulo govt to hire World Bank to study privatizing water utility
▼ + stars: | 2023-03-03 | by ( Rodrigo Viga Gaier | ) www.reuters.com time to read: +1 min

RIO DE JANEIRO, March 3 (Reuters) - Sao Paulo's state government will hire the World Bank's International Finance Corporation (IFC) in the next few days for studies on the possible privatization of state water utility Sabesp (SBSP3.SA), Governor Tarcisio de Freitas said on Friday. "The privatization of Sabesp is a very complex matter," Tarcisio told Reuters after attending an event in Rio de Janeiro. Freitas said utility would only be privatized "if we reach the conclusion that we are going to increase efficiency, have upsides, reduce tariffs." "I think that all these objectives are possible and I understand that studies will show this," he said. The board of directors of Sao Paulo's state privatization program had earlier this week authorized the body to commission studies on Sabesp's possible privatization.

☆ World Bank's IFC to provide Sri Lanka with $400 mln financing
▼ + stars: | 2023-02-27 | by ( ) www.reuters.com time to read: +1 min

COLOMBO, Feb 27 (Reuters) - The International Finance Corporation (IFC), the World Bank's investment arm, said it will provide Sri Lanka a $400 million cross-currency swap facility to help fund essential imports. Three private banks, which together deal with over 30% of Sri Lanka's remittances and exports, will receive the facility to fund essential imports, including medicine, food and fertiliser, the IFC said in a statement on Monday. The funds will provide a much needed foreign exchange cushion for Sri Lanka, which is grappling with its worst financial crisis in over seven decades partly triggered by a severe shortage of dollars. IFC is also working on further plans to support client banks with other long-term funding and advisory services in the future, the statement added. Sri Lanka signed a preliminary agreement with the International Monetary Fund (IMF) for a $2.9 billion bailout last September but has to put its debt on a sustainable repayment track before the funds can be disbursed.

☆ New French fund with 87.5 mln euros targets African solar development
▼ + stars: | 2023-02-24 | by ( ) www.reuters.com time to read: +2 min

PARIS, Feb 24 (Reuters) - A new investment fund with 87.5 million euros ($92.63 million) will finance solar power production across Africa, with a focus on West and Central Africa, French fund manager RGREEN INVEST and investment adviser ECHOSYS INVEST said on Friday. The AFRIGREEEN Debt Impact Fund's first closing will finance on- and off-grid solar power plants for small- and medium-sized commercial and industrial consumers across the continent, the statement said. The groups are looking to have a portfolio of twenty to thirty investments, with aim of meeting long-term debt financing needs of between 10 and 15 million euros, with an average of around 5 million euros over eight to ten years, the statement said. RGREEN INVEST and ECHOSYS INVEST said that the first closing included commitments from the European Investment Bank (EIB) and the International Finance Corporation (IFC). The group is aiming to raise a total of 100 million euros from development finance institutions and private investors.

☆ Global debt sees first annual drop since 2015 - IIF
▼ + stars: | 2023-02-22 | by ( Marc Jones | ) www.reuters.com time to read: +2 min

The Institute of International Finance report published on Wednesday estimated that the nominal value of global debt declined by some $4 trillion, bringing it fractionally back under the $300 trillion threshold breached in 2021. Stronger economic activity and higher inflation meanwhile, both of which erode debt levels, saw the global debt-to-GDP ratio drop over 12 percentage points to 338% of GDP, marking the second annual drop in a row. Again, though, the improvement was driven by developed markets which saw an overall 20 percentage points fall to 390%. The emerging market debt ratio rose by 2 percentage points meanwhile to 250% of GDP, largely driven by China and Singapore. the IIF said, adding that it had pushed international investor demand for local currency EM debt to multi-year lows, "with no sign of imminent recovery".

A year from Russia's invasion of Ukraine, fracturing geopolitics seems to be rolling back world trade links and financial interdependence at speed. But global financial conditions - and the strength of the U.S. dollar as a proxy for that - may be playing a bigger part than the more dramatic political narrative lets on. "A stronger dollar tends to go hand in hand with tighter global financial conditions and more subdued supply chain activity." Compensating somewhat for dollar exchange rate strength over the decade were historically low real dollar borrowing rates. There's little doubt that the pandemic and the geopolitics surrounding Ukraine and Taiwan have been major potential disruptions to world trade by themselves.

☆ A.P. Moller Capital plans $750 mln infrastructure deals in South, Southeast Asia
▼ + stars: | 2023-02-20 | by ( Anshuman Daga | ) www.reuters.com time to read: +1 min

Moller Capital, the asset management unit of Danish transportation and logistics giant A.P. Moller Group, said on Monday it aims to invest more than $750 million in the high-growth markets of South and Southeast Asia. Moller Capital and our investment business in Asia, where we see significant opportunity...," said Dhruv Narain, partner at A.P. Moller Capital and head of its Asia team. Moller Capital manages more than $1.5 billion and has invested in 16 projects.

☆ Egypt court to rule soon in case over Intesa's local unit - sources
▼ + stars: | 2023-02-20 | by ( ) www.reuters.com time to read: +2 min

It did not mention AlexBank, though a sale of its remaining stake to Intesa is a possibility, one of the sources said. The sale was challenged in court by activist group, the Egyptian Centre for Transparency, local media reported. Egypt's constitutional court in mid-January ruled to uphold that law rejecting a challenge brought against it. A number of cases, including that centred around the sale of AlexBank, had been put on hold pending the decision on the law. Reporting by Patrick Werr in Cairo and Valentina Za in Milan; Editing by Emelia Sithole-MatariseOur Standards: The Thomson Reuters Trust Principles.

☆ A former BlackRock stock chief says he thinks the S&P 500 will fall another 17% as investors ignore a growing mountain of tell-tale recession signals
▼ + stars: | 2023-02-18 | by ( William Edwards | ) www.businessinsider.com time to read: +6 min

Doll says the S&P 500 will drop to 3,400 if a mild recession unfolds. If a more normal recession (more severe than a mild downturn) comes, Doll said the index could fall to 3,000. The Fed's recession probability tracker based on the yield curve also now puts the odds of a recession at 57%. Subramanian expects the S&P 500 to fall as low as 3,000, a view shared by Morgan Stanley's Mike Wilson. If trouble hits, like Doll and much of Wall Street expects, stocks could extend their fall to new lows.

☆ African countries are charged 'extortionate' rates on debt, U.N. chief says
▼ + stars: | 2023-02-18 | by ( Dawit Endeshaw | ) www.reuters.com time to read: +3 min

"We need a new debt architecture that provides debt relief and restructuring to vulnerable countries," he said. "The global financial system routinely denies (developing countries) debt relief and concessional financing while charging extortionate interest rates." Governments on the continent, including Ethiopia, sought debt restructuring deals under an IMF programme to help them navigate the crisis, but conclusion of the process has been delayed. Others, which have not sought to restructure their debt, like Kenya, have seen their debt sustainability indicators worsen after the pandemic hit their finances. "African countries cannot... climb the development ladder with one hand tied behind their backs," he said.

☆ Debt-laden African countries charged 'extortionate' rates, U.N. chief says
▼ + stars: | 2023-02-18 | by ( Dawit Endeshaw | ) www.reuters.com time to read: +3 min

ADDIS ABABA, Feb 18 (Reuters) - African countries are getting a raw deal from the international financial system which charges them "extortionate" interest rates, the U.N. chief said on Saturday, as he announced $250 million in crisis funding, including for famine risk on the continent. "The global financial system routinely denies (developing countries) debt relief and concessional financing while charging extortionate interest rates," he said. The coronavirus pandemic pushed many poor countries into debt distress as they were expected to continue servicing their obligations in spite of the massive shock to their finances. Public debt ratios in sub-Saharan Africa are at their highest in more than two decades, the International Monetary Fund said last year. "African countries cannot... climb the development ladder with one hand tied behind their backs," Guterres said.

[1/3] A view of the destroyed village of Moshchun amid Russia's invasion, Kyiv region, Ukraine May 19, 2022. But before they can even begin to be answered, Kyiv is seeking billions just to ride out this year. After a 30% contraction in its economy in 2022, Ukraine will need $38 billion by the end of year to cover its budget deficit alone. "But to me, one of the surprises has been how the private sector has been so resilient." "Supporting Ukraine now is critical to avoid a devastating humanitarian crisis and to strengthen Ukraine for what it's doing for the rest of the world."

☆ Exclusive: World Bank's Malpass on surprise exit: Four years is a long time
▼ + stars: | 2023-02-16 | by ( Andrea Shalal | ) www.reuters.com time to read: +3 min

WASHINGTON, Feb 16 (Reuters) - World Bank President David Malpass on Thursday told Reuters he decided to leave before his five-year contract ended because he felt work was well underway on reforms aimed at expanding the bank's lending. Malpass, who was nominated by former President Donald Trump, said the end of the bank's fiscal year was a good time for a transition. Malpass will leave the bank by the end of June. Asked about suggestions he had been urged to leave, Malpass said he was leaving on his own terms and it made sense for him at this time. Malpass would not comment on whether it was time to end a longstanding tradition of having the bank's leader come from the United States.

☆ January flows to emerging markets largest in two years - IIF
▼ + stars: | 2023-02-15 | by ( Rodrigo Campos | ) www.reuters.com time to read: +2 min

The January figure of $65.7 billion net inflows outpaced the $30.9 billion for all of last year according to IIF data. Debt securities outside of China raked in $44.6 billion, the largest monthly figure on IIF records back to 2018. Reuters GraphicsThe first week of the year saw a record of about $28 billion in issuance from emerging market sovereigns and companies. Flows to Chinese equities also posted a strong rebound last month, bringing in the largest inflow since December 2020. Regionally, Asia and Latin America saw the largest inflows last month with $34.4 billion and $15.9 billion respectively.

☆ Kazuo Ueda is set to become Japan's next central bank governor. Here's what it means
▼ + stars: | 2023-02-14 | by ( Jihye Lee | ) www.cnbc.com time to read: +2 min

Bloomberg | Bloomberg | Getty ImagesKazuo Ueda is set to become the next governor of the Bank of Japan, succeeding current central bank chief Governor Haruhiko Kuroda. Kishida recently emphasized the need for the next central bank governor to have "global communication skills" and be able to coordinate closely with global peers, Reuters reported, citing his comments in parliament. He has led the central bank's ultra-dovish monetary policy, including maintaining a negative interest rate since 2016 – even as global peers have been hiking to tackle inflation. Bank of America Global Research expects gradual policy normalization under the central bank's new leadership instead of an abrupt change, according to the firm's economists led by Izumi Devalier. 'Well-suited' deputiesJapan's government also reportedly announced its nominees for other central bank roles including Shinichi Uchida, currently the central bank's executive director, and Ryozo Himino, the former chief of Japan's Financial Services Agency.

☆ Kazuo Ueda nominated to lead Japan's central bank in possible move away from ultra-easy policy
▼ + stars: | 2023-02-14 | by ( Laura He | ) edition.cnn.com time to read: +5 min

Hong Kong CNN —The Japanese government has nominated Kazuo Ueda to lead its central bank, in a surprise move that could pave the way for the country to wind down its ultra-loose monetary policy. Accommodative is a term used to describe monetary policy that adjusts to adverse market conditions and usually involves keeping interest rates low to spur growth and employment. As part of that program, the central bank targeted some short-term interest rates at an ultra-dovish minus 0.1% and aimed for 10-year government bond yields around 0%. But as prices rose and interest rates elsewhere went up, pressure has grown on the BOJ to wind down YCC. But Kuroda later dismissed a near-term exit from his ultra-loose monetary policy.

☆ China, U.S. to participate in first meeting of new debt roundtable on Feb. 17
▼ + stars: | 2023-02-13 | by ( Andrea Shalal | ) www.reuters.com time to read: +3 min

WASHINGTON, Feb 13 (Reuters) - Officials from China, India, Saudi Arabia and Group of Seven wealthy nations will participate in a first virtual meeting of a new sovereign debt roundtable on Friday, three sources familiar with the plans said on Monday. Creation of the body comes amid growing frustration about the slow pace of discussions on debt relief for Zambia, which first requested help two years ago. Organizers say the roundtable could help resolve issues in principle, including cutoff dates for debt treatments, and will not focus on Zambia or other individual cases. U.S. Treasury Secretary Janet Yellen and other G7 officials see China, now the world's largest sovereign creditor, as the main stumbling block for quicker work on debt treatments. “The majority of countries support expanding these policies to middle-income countries, but China is the biggest challenge,” LeCompte said, adding that Europe had gone through a similar period of reluctance on debt relief in the 1990s, but eventually came around.

☆ A global recession could be coming - at least that's what commodity prices seem to say
▼ + stars: | 2023-02-09 | by ( Phil Rosen | ) www.businessinsider.com time to read: +5 min

Right now, the chief economist at the Institute of International Finance, Robin Brooks, is watching weakening commodity prices. Specifically, Brooks pointed out that oil and copper prices have slumped roughly 6% each since mid-January, despite China's easing of zero-COVID policies. "Whatever is going on in China, there's no sign that the end of zero-COVID is boosting global growth, based on commodity prices," Brooks said in a tweet. "Oil prices never went up and copper prices are falling after the initial China reopening excitement fades." He pointed to the sharp change in oil prices last week as an example of shallower liquidity.

☆ Exclusive: The FBI's McGonigal labyrinth
▼ + stars: | 2023-02-08 | by ( Mattathias Schwartz | ) www.businessinsider.com time to read: +28 min

She never saw McGonigal pay. "The notion that Mr. Deripaska is some proxy for the Russian state is a blatant lie," Ruben Bunyatyan, a spokesperson for Deripaska, told Insider by email. McGonigal was not charged with espionage, and although there is currently no evidence that McGonigal committed espionage, an FBI source told Insider that the investigation is ongoing. At the FBI, McGonigal racked up a string of big cases and promotions. "He said he needed to make more money," Guerriero told Insider.

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