DIRS.INFO The most relevant business & tech news

Tens of billions of dollars of FX and gold reserves have been used up - another sign of systematic micro-management. Depositors have put some $33 billion into depreciation-protected bank accounts in the last two months, bringing the total to $121 billion - almost a quarter of all Turkish deposits. Benchmark international market bonds have fallen back 10%-15% and key FX market volatility gauges that look a year or more ahead have hit record highs. Eyes are now on the FX reserves and the lira as it surpasses 20 to the dollar, the latest major milestone in its long descent. "These weren't seen as cheap assets, they were seen as jewels," MIT's Acemoglu said of the M&A banking boom heyday.

It would see the IMF and other MDBs "cut the excessive macro-risk premia on developing countries with $100 billion per year of foreign exchange guarantees", for financing in more volatile domestic currencies rather than the dollar or euro. A report by the World Bank and other big multilateral lenders said they gave $51 billion in 2021 alongside $13 billion from private finance. Outlines of the proposals have been sent to the key groups preparing the discussions over the last couple of weeks. "This is a call to arms" the source said, referring to the document and its intention to galvanise more concrete action from the IMF and multilateral lenders. The proposals put forward in the April document, which also include redistributing other IMF money, are likely to form a key part of the negotiating position of developing countries at the next round of annual climate talks in Dubai later this year.

☆ Inflation fight risks central banks' credibility and autonomy, BIS warns
▼ + stars: | 2023-05-19 | by ( Marc Jones | ) www.reuters.com time to read: +2 min

LONDON, May 19 (Reuters) - The credibility and independence of central banks around the world is at risk if stubbornly-high global inflation rates are not bought under control, the head of the Bank for International Settlements has warned. Speaking in Brazil, Agustín Carstens, the bank's general manager, said a tough response to inflation was fundamental for maintaining trust in central banks' ability to keep economies on an even keel. "Otherwise, the credibility of monetary policy, and the autonomous central banks responsible for implementing it, will be called into question." Turning back to the inflation battle, he said the process could run into obstacles, particularly as policymakers try to get it back to their preferred sweet spot, which is around 2% for the Fed and other major central banks. "Over the coming years, monetary policy should focus squarely on bringing inflation back to levels consistent with central bank objectives".

☆ ECB must continue inflation fight 'with determination', Schnabel says
▼ + stars: | 2023-05-19 | by ( ) www.reuters.com time to read: +2 min

LONDON, May 19 (Reuters) - The European Central Bank must continue its fight to tame inflation "with determination" because wages are rising, fiscal policy is too generous and inflation expectations remain too high, ECB board member Isabel Schnabel said on Friday. Their comments came against a backdrop of concerns about fallout on the financial system from an abrupt series of ECB rate hikes and speculation about a pause in tightening by the U.S. Federal Reserve. "This is why it's so important that we show strong determination to bring inflation back to 2%," she told an event in London. But Schnabel said the ECB should go on "raising rates to a sufficiently restrictive level and keeping them at that level for as long as necessary". At the same time it had "the tools to provide liquidity to the euro area financial system, if needed to preserve financial stability", she added.

☆ Turkey's market rout deepens after Erdogan's strong election showing
▼ + stars: | 2023-05-16 | by ( Libgeorge Canan Sevgili | Canan Sevgili | ) www.reuters.com time to read: +4 min

Ahead of the elections, opinion polls had showed Kilicdaroglu in the lead, and investors expected him to scrap some of Erdogan's economic policies, including costly efforts to prop up the lira currency. Longer-dated, dollar-denominated government bonds saw the biggest falls in fixed income markets, although key corporate and banking sector bonds also edged lower. Credit ratings agency Fitch said the political and economic uncertainty would continue at least until after the runoff. Banking stocks, which had surged in the week ahead of the election on hopes of a policy change, tumbled another 8% (.XBANK) to take their losses since the election to nearly 20%. The overall Istanbul bourse index (.XU100), which had notched a 6.1% fall on Monday, its largest daily percentage drop since early February, was mostly flat.

☆ Analysis: Erdogan election showing cools Turkish turnaround hopes
▼ + stars: | 2023-05-15 | by ( Marc Jones | ) www.reuters.com time to read: +4 min

LONDON, May 15 (Reuters) - Hopes among investors of a surge in Turkish markets evaporated on Monday after long-standing President Tayyip Erdogan took a commanding position in Turkey's elections. "Hope is dead," Abrdn's head of emerging market local currency debt Kieran Curtis said of the prospects for Erdogan's main challenger Kemal Kilicdaroglu and meaningful policy change. Monday's initial market reaction had seen the Turkish lira dip to 2-month low alongside more pronounced drops in banking shares and hard currency government bonds. "A continuity of policies would argue for low FX volatility," JPMorgan added, as Erdogan's economic team would look to limit the changes and FX volatility. Reuters GraphicsAdditional reporting by Libby George and Karin Strohecker; Editing by Alexander SmithOur Standards: The Thomson Reuters Trust Principles.

☆ Analysis: North Africa backslides toward swirling debt troubles
▼ + stars: | 2023-05-11 | by ( Marc Jones | ) www.reuters.com time to read: +6 min

Making debt payments could become almost impossible. EGYPTEgypt's finances also look stretched despite it securing a $3 billion IMF rescue plan in December. The rating agency, which downgraded Egypt's credit rating again on Friday, highlights that only default-stricken Sri Lanka would need to pay more. "It would not be immaterial if it were to default" Ross said about the impact on global money managers. "These very wealthy Gulf countries have generally enhanced financial stability in the region," via their support he added.

LONDON, May 9 (Reuters) - Ecuador sealed the world's largest "debt-for-nature" swap on record on Tuesday, selling a new "blue bond" that will funnel at least $12 million a year into conservation of the Galapagos Islands, one of the world's most precious ecosystems. Tuesday's $656 million "Galapagos Bond," as it has been dubbed, will run until 2041 and gave investors that bought it a 5.645% "coupon" or interest rate, its bankers said. Ecuador sovereign bonds currently yield from 17% to 26%, but the new bond has an $85 million 'credit guarantee' from the Inter-American Development Bank and $656 million of political risk insurance from the U.S. International Development Finance Corp (DFC), effectively making it less risky. The driver has been the remote Galapagos Islands, some 600 miles (970 km) off Ecuador's mainland coast, that inspired Charles Darwin's Theory of Evolution. Scott Nathan, the chief executive of DFC, said people needed to "stay tuned" for similar deals in other countries and the Galapagos deal had been a long time coming.

☆ Ecuador launches debt buyback plan aimed at Galapagos protection
▼ + stars: | 2023-04-26 | by ( Marc Jones | ) www.reuters.com time to read: +1 min

[1/4] A pelican is seen on Santa Cruz Island, part of the Galapagos Islands, Ecuador. REUTERS/Santiago ArcosLONDON, April 26 (Reuters) - Ecuador has launched a long-awaited debt buyback plan that will free up money to protect its Galapagos Islands, one of the world's most precious ecosystems and the inspiration for Charles Darwin's Theory of Evolution. "The Offeror is making the Offer... as part of a broader refinancing operation to channel savings and promote certain conservation and sustainability efforts," the buyback plan said. The operation is private, the country's finance ministry said in a message to journalists, and cannot be discussed. Reporting by Marc Jones; Editing by Sandra MalerOur Standards: The Thomson Reuters Trust Principles.

Companies European Central Bank FollowLONDON, April 24 (Reuters) - France's central bank governor François Villeroy de Galhau has pushed back against criticism of central banks' increasing involvement in the fight against climate change, calling the issue a "must have" focus. "Central banks' core mandate worldwide is price stability, and climate change already affects the level of prices and activity," Villeroy stressed. The debate about how much influence central banks can have in tackling climate issues has become increasingly divisive this year. Villeroy, however, who has long been a firm advocate of doing more, urged central banks and others to come up with better models of how climate change is likely to alter economies. It is also aiming to release short-term climate change scenarios by the end of 2024, which should show more adverse developments, incorporate tougher "shocks" and directly explore the potential impacts of climate change on inflation.

☆ Credit Suisse saw record fund outflows during March turmoil, data shows
▼ + stars: | 2023-04-21 | by ( Marc Jones | ) www.reuters.com time to read: +1 min

LONDON, April 21 (Reuters) - Credit Suisse saw investors pull a record 4.6 billion euros ($5.04 billion) out of its funds at the height of the bank's troubles last month, data published on Friday showed. The data from Morningstar covered the whole of March, when a potential collapse of Credit Suisse saw Switzerland's financial authorities orchestrate its emergency takeover by rival UBS (UBSG.S). The data also showed that Swisscanto, another Swiss asset manager, saw the second-largest inflow of funds after iShares in March, with an estimated 6.2 billion euros pouring in. Going back over the last 12 months, the data also showed Credit Suisse's funds, which Morningstar counts as either open-ended fund and exchange-traded funds, had seen money exiting every month apart from one. Reuters Graphics($1 = 0.9127 euros)Reporting by Marc Jones; Editing by Amanda CooperOur Standards: The Thomson Reuters Trust Principles.

LONDON, April 21 (Reuters) - Zambia will send its first fully-formed debt restructuring plan to China and other government creditors "very soon" the government's legal advisors said, as it looks to capitalise on fresh momentum seen in high-level talks in recent days. "We are hoping to provide a restructuring proposal to the official creditors (committee) very soon," Melissa Butler at White & Case, the law firm advising Lusaka on the restructuring, told Reuters, adding that meant the "coming weeks". "We want to start talking about concrete proposals about what debt relief would look like." Zambia is hoping for more than $8 billion of debt relief and Hichilema recently warned that if the restructuring was not able to be concluded soon, it would "tarnish" the tough fiscal reform measures the government has been undertaking. Zambia's restructuring has a wider importance too.

☆ JPMorgan sees Turkey lira diving towards 30 per dollar after elections
▼ + stars: | 2023-04-14 | by ( Marc Jones | ) www.reuters.com time to read: +3 min

LONDON, April 14 (Reuters) - Turkey's lira is likely to drop sharply and could near 30 to the dollar following next month's elections, bankers at JPMorgan have predicted, if it looks like only modest changes will be made to its unorthodox economic policies. Turkey's tightly contested presidential and parliamentary elections on May 14 are perhaps the most consequential in the century-long history of the republic. JPMorgan's analysts said that macro adjustments were expected regardless of the results but laid out two scenarios based on the degree of commitment to more orthodox policies, such as interest rate rises to cool inflation. "Initially, lira depreciates, driven by pent-up pressures of the large stimulus ahead of the elections. "A scenario of a return to orthodox macroeconomic policies could set lira on a real appreciation trend back towards its fair value," JPMorgan said.

☆ Analysis: No China, no deal: Bid to break sovereign debt logjams gets weary thumbs up
▼ + stars: | 2023-04-13 | by ( Libgeorge Marc Jones | Marc Jones | ) www.reuters.com time to read: +6 min

LONDON, April 13 (Reuters) - The latest bid by the world's leading institutions and creditors to speed up debt restructurings and get bankrupt countries back on their feet has been greeted by a mix of cautious optimism and weary scepticism by veteran crisis watchers. The somewhat loose framework around sovereign restructurings has seen Beijing seek to influence the traditional rules of engagement in these processes. The Common Framework platform introduced by leading G20 nations in 2020 aimed to bring all creditors, including China, together and streamline negotiations. Anna Ashton, director of China research at Eurasia Group, said this week’s developments underscored the benefits for China to give some ground on some of its concerns. "China is a difficult partner to talk to but we need China at the table for the solution of debt problems, because otherwise we won't see any progress," Lindner said.

☆ No China, no deal: Bid to break sovereign debt logjams gets weary thumbs up
▼ + stars: | 2023-04-13 | by ( Libgeorge Marc Jones | Marc Jones | ) www.reuters.com time to read: +6 min

☆ Factbox: The developing countries facing a debt crisis
▼ + stars: | 2023-04-05 | by ( ) www.reuters.com time to read: +7 min

The cocoa, gold and oil producer has already reached a deal to write down domestic debt and last week kicked off formal debt talks with international bondholders. A $1.9 billion IMF loan has been stalled for months as Tunisia's president has shown little sign of action on key reforms. SRI LANKASri Lanka defaulted on its international debt last year after economic mismanagement, exacerbated by the COVID-19 pandemic, sparked a political crisis and left it without dollars for even essential imports. UKRAINEUkraine just received the first $2.7 billion tranche under a four-year, $15.6 billion IMF loan program. Zambia's currency, the kwacha , has fallen more than 10% against the U.S. dollar this year, which the central bank has said is adding to inflation.

☆ Shares and bonds ride high after soothing euro zone data
▼ + stars: | 2023-03-31 | by ( Marc Jones | ) www.reuters.com time to read: +6 min

Government bonds have gained as much as 5%, gold is 8% higher, while oil is down and the dollar has barely budged. The euro zone inflation numbers showed consumer prices rising 6.9% in March after an 8.5% increase in February, representing the sharpest deceleration since Eurostat started collecting data in 1991. Japan's Nikkei (.N225) also jumped 1% on Friday，as inflation data for the capital Tokyo highlighted broadening price pressures. The euro , which hit a one-week high against the dollar overnight on sticky German inflation data, dipped back under $1.09 again after the euro zone data but was still set for a 3% monthly rise. U.S. crude futures were flat at $74.40 per barrel, while Brent crude futures slipped 0.1% to $78.52 per barrel.

☆ Global derivatives industry defends CDS after banking blow-ups
▼ + stars: | 2023-03-30 | by ( Marc Jones | ) www.reuters.com time to read: +3 min

Credit default swaps (CDS) are derivatives that offer insurance against the risk of a bond issuer - such as a bank - not paying their creditors. European Union markets watchdog ESMA said on Thursday that it, together national regulators, had been "looking into the recent market movements, including in the CDS market". Clearing of individual bank or company CDS is also available at LCH’s CDSClear and ICE Clear Credit. Overall, the credit derivatives market is also far smaller than it was before the 2008 crisis. "The credit derivatives market continues to play a critical role, particularly during times of volatility," Malia said.

☆ China-driven growth seen helping emerging assets despite bank worries
▼ + stars: | 2023-03-30 | by ( Duncan Miriri | ) www.reuters.com time to read: +4 min

LONDON, March 30 (Reuters) - Stronger Chinese-led emerging markets growth will likely buffer the stocks, bonds and currencies of many developing nations as markets in the United States and Europe are whipped around by banking turmoil. "The growth premium in favour of emerging markets driven by China is clearly even more confirmed," Alessia Berardi, head of emerging markets (EM) research at Amundi, Europe's biggest asset manager, told Reuters. Analysts expect high interest rates, inflation and stress among some financial institutions to dampen growth in developed markets like the United States. "We prefer income in emerging markets debt with central banks closer to turning to cuts than developed markets, even with potential currency risks," it said in a research note. Local EM bonds have seen a return of 3.3% in the month-to-date (.JGEGDCM), compared to a 3.1% gain in U.S. 10-year Treasuries.

☆ Default-stricken Zambia's debts creep higher
▼ + stars: | 2023-03-29 | by ( ) www.reuters.com time to read: +1 min

LONDON, March 29 (Reuters) - Default-stricken Zambia published figures on Wednesday showing that its total public debt stock climbed to $32.8 billion, including interest arrears at the end of last year, of which $18.6 billion was external. At the end of June 2022 its total debt including interest arrears was $32.5 billion, with $17.5 billion external. "Zambia urgently needs a significant reduction in its debt burden," the country's Ministry of Finance said in an accompanying statement. "Zambia enjoys productive and positive relationships with all its creditors and is hopeful that an agreement on debt restructuring can be reached swiftly." Reporting by Marc Jones and Rachel Savage; Editing by Karin Strohecker and Mark PorterOur Standards: The Thomson Reuters Trust Principles.

☆ Europe's banks in 'better place' than U.S. in terms of commercial property risk - JPMorgan
▼ + stars: | 2023-03-28 | by ( Marc Jones | ) www.reuters.com time to read: +2 min

LONDON, March 28 (Reuters) - Europe's banks face less threat from some of the problems now showing in the commercial real estate markets than their U.S. counterparts, analysts at JPMorgan have said. That would accelerate a property sector downturn, aggravating underlying health concerns as it did during the 2007-08 global financial crisis and a number of other major crashes. Analysts at Capital Economist estimated this week that U.S. commercial property prices will slump a further 18-20%, having already fallen 4-5% from their peak in mid-2022. Lending to commercial property accounts for about 40% of all loans by smaller U.S. banks, defined by the Federal Reserve as being those outside the 25 largest by asset size. These banks account for about 70% of outstanding loans to the commercial real estate sector.

☆ Analysis: Pressure builds on Egypt to devalue currency further
▼ + stars: | 2023-03-28 | by ( Patrick Werr | ) www.reuters.com time to read: +5 min

Egypt has sharply devalued the currency three times since Russia's invasion of Ukraine in February 2022 exposed vulnerabilities in the country's finances. But with each devaluation the central bank aimed to keep the currency steady afterwards, only for the black market and non-deliverable forwards to quickly push beyond the new rate. "No time like the present to align foreign exchange rates with fundamentals," Urmossy said, adding that the March 30 policy announcement was "one of the most anticipated events in the African Frontier space." And the black market shows the hard currency shortage that has plagued Egypt for more than a year persists. "Demand for foreign exchange continues to outstrip supply, providing the conditions for the parallel market to grow," said Farouk Soussa of Goldman Sachs.

☆ Stocks up, bond yields fall as markets mull a Fed policy pause
▼ + stars: | 2023-03-23 | by ( Koh Gui Qing | ) www.reuters.com time to read: +4 min

The Fed's hint of a pause after announcing a quarter-point rate rise on Wednesday, even as it re-stated its commitment to fight inflation, provided relief to markets. "Note the modern-day history book of Fed pauses is very bullish for stocks," Innes said. In Europe, news of the rate hikes in Switzerland and Britain helped push the European-wide STOXX 600 share index (.STOXX) down 0.21%. For bond markets it meant European government bond yields - which reflect borrowing costs - were heading down again. German Bunds were back at 2.25%, having seen 10-year U.S. Treasury yields dip back below 3.5%.

☆ Rally splutters as Europe ploughs on with rate hikes
▼ + stars: | 2023-03-23 | by ( Marc Jones | ) www.reuters.com time to read: +3 min

The European-wide STOXX 600-share index (.STOXX) fell 0.75% with banks and insurers the main culprits again, suffering 1.6%-2% drops. Norway had also hiked, although MSCI's main world share index (.MIWD00000PUS) was still in positive territory after overnight gains in Asia. Focus now shifts to the Bank of England, with investors expecting a quarter-percentage-point increase in its main rate after a surprise jump in inflation squashed hopes of it pausing its tightening campaign. /FRXElsewhere in the bond markets, although UK yields were up those on German Bunds were down at 2.281%, happy to match the falls seen on 10-year U.S. Treasuries yields that had taken them to 3.440%. Germany's European Central Bank rate setter Joachim Nagel had even said he now thought the ECB was "approaching restrictive territory" with its rates, referring to a level that curtails growth.

☆ Global supervisor to review banking market woes
▼ + stars: | 2023-03-23 | by ( ) www.reuters.com time to read: 1 min

LONDON, March 23 (Reuters) - The main global committee of banking supervisors is to review the recent turmoil in the financial system to see what lessons can be learn and whether any regulations need tightening. The Switzerland-based Basel Committee on Banking Supervision said in a statement on Thursday it had met on 22–23 March in Hong Kong, "to take stock of recent market developments and risks to the global banking system and related vulnerabilities, and to discuss a range of policy and supervisory initiatives." Reporting by Marc Jones; Editing by Amanda CooperOur Standards: The Thomson Reuters Trust Principles.

Search resuls for: "Marc Jones"

25 mentions found