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WASHINGTON, April 14 (Reuters) - A committee of Sri Lanka's international private creditors sent its first debt rework proposal to the country's authorities regarding over $12 billion in bonds outstanding, according to three sources with direct knowledge of the matter. It is the first bondholder proposal after the island-nation of 22 million people defaulted on its debt a year ago. A spokesperson representing the creditor committee declined to comment. China, Sri Lanka’s biggest bilateral creditor, did not join the announcement. Sri Lanka secured last month a $2.9 billion program from the International Monetary Fund to tackle its huge debt burden.

WASHINGTON, April 14 (Reuters) - Zambia last week gave its bondholders a "concrete proposal" for the restructuring of some $3 billion in eurobonds, the ministry of finance and national planning said on Friday. "We continue to engage actively with our bondholders and proposals are being exchanged," the ministry told Reuters in a statement. The proposal "represents our commitment to finding a resolution that is acceptable to all parties and within the parameters set out by the IMF debt sustainability analysis." Zambia defaulted on its overseas debt in 2020 and is working on a restructuring with bilateral creditors and private bondholders, but talks have dragged amid a lack of consensus on how to provide debt relief. Internationally we need to pool our voices together for a stronger response ... We need a stronger response on a global stage."

Pemex, which had financial debt totaling nearly $108 billion at the close of last year, pays a profit sharing rate (DUC) - effectively a tax paid to the government - of 40%. Delaying Pemex's payment of the DUC should give the oil giant some $2 billion in cash flow, said Yorio. "We can do this quickly to provide liquidity to Pemex, not through a capitalization, but by allowing it not to immediately pay the royalty, the profit sharing rate," said Yorio. Separately, Yorio said Mexico would not need to issue debt to finance its $6 billion deal to buy 13 power plants from Spanish energy company Iberdrola (IBE.MC). Lopez Obrador has described the deal, which will boost state power utility Comision Federal de Electricidad's (CFE) market share to nearly 56% of Mexico's total power generation from about 40%, as a "new nationalization".

☆ IMF to Latin America: tighten your belts
▼ + stars: | 2023-04-13 | by ( ) www.reuters.com time to read: +2 min

"Fiscal policy can help monetary policy in reducing demand pressures," the IMF said in a blog post on its outlook for the region's economy. Employment is above pre-pandemic levels, output is at or above potential, and short-term inflation expectations exceed central banks’ targets, the fund said. However, with softer jobs the need for social spending will remain high, the IMF said. "Rebalancing policy will not be easy," the fund said, adding that there are "serious distributional and social equity issues to contend with. Spending better means spending with more efficiency and transparency, key points in a region often plagued by corruption.

☆ 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.

REUTERS/Ken CedenoWASHINGTON, April 12 (Reuters) - Zambia could lose gains achieved so far from macroeconomic reforms if its ongoing debt restructuring is further delayed, Treasury Secretary Felix Nkulukusa said on Wednesday. The next IMF payout to Zambia from the loan is contingent upon its bilateral creditors reaching an agreement on the long-delayed debt restructuring. The country recently completed the first review of the programme, and the next one is expected in about three months. Ceyla Pazarbasioglu, director of the IMF's Strategy Policy and Review Department, was more optimistic about Zambia's debt restructuring during the panel. The IMF official said that creditors have asked to share and exchange information "sooner" during debt restructuring talks, and added that the Washington-based lender is willing to do so.

☆ 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

REUTERS/Elizabeth FrantzApril 13 (Reuters) - The International Monetary Fund is working closely with Suriname authorities to bring their financing program back, while looking for progress in government talks with China, a key creditor, an IMF official said on Thursday. The IMF and Suriname engaged in a financing program for nearly $700 million in late 2021, but it stalled after the first review was approved more than a year ago. "The authorities are here right now, we're having discussions with them," Chalk said, adding that he looks forward for a mission visit soon to "deepen those discussions." "Having some more progress on the debt restructuring talks with China would really help us with the program, and help the country," he said. Reporting by Rodrigo Campos and Jorgelina do Rosario; editing by Jonathan OatisOur Standards: The Thomson Reuters Trust Principles.

Argentina - a serial defaulter which has long battled high inflation, currency weakness and indebtedness - struck a $57 billion deal with the IMF in 2018 to try and fix its economic woes. Those reviews of how Argentina is doing against its economic targets are linked to scheduled disbursements of funds. Failure to meet the targets could stall the program or force the IMF to adjust the targets further. The IMF net reserve targets are the amount Argentina needs to accumulate over time above a baseline of $2.277 billion at the end of 2021. "That will make it hard to meet the IMF's (downwardly revised) FX reserve target and increases the risk of a disorderly devaluation."

Easing the reserves accumulation target was part of the fourth review under the country's $44 billion program, with Argentina looking to soften expectations on its economic performance. The IMF board "approved modifications to the reserve accumulation targets to partially accommodate the impact of the severe drought," the fund said in a statement, without detailing the new targets. The change in the targeted reserves lowers the bar for the South American economy to pass future IMF reviews. But weighing on further forex accumulation, Argentina's central bank sold in March the largest monthly amount of dollars since October 2019 as it struggles to prop up the local peso currency. The IMF review included "waivers of non-observance associated with the introduction of policy measures that gave rise to new exchange restrictions and multiple currency practices."

BUENOS AIRES, March 31 (Reuters) - The International Monetary Fund (IMF) approved Argentina's fourth review under its $44 billion loan program on Friday, unlocking the disbursement of $5.4 billion to the indebted country, the lender said in a short statement. The country's central bank foreign reserves jumped by $2.5 billion on Friday versus a day earlier, data from the bank showed. That reflected the new IMF funds minus $2.7 billion of repayments Argentina had to make to the lender on Friday. A central bank source told Reuters the funds had arrived and been reflected in reserve levels. Reporting by Jorge Otaola, Rodrigo Campos and Jorgelina do Rosario; Writing by Adam JourdanOur Standards: The Thomson Reuters Trust Principles.

Separately, in a televised interview on Wednesday, Erdogan downplayed the significance of the meeting with Simsek, saying such meetings were ordinary. A senior government official told Reuters the AKP was somewhat divided with some members opposed to Simsek's return, and described the outcome of the Erdogan meeting as "undesirable". The party may now need to revise its economic platform ahead of the election campaign, he added. The AKP declined to comment on whether it was revising its economic strategy ahead of the vote. Two recent polls by MAK and Turkiye Raporu show the opposition presidential challenger Kemal Kilicdaroglu between 4 and 9 percentage points ahead of Erdogan.

The global lender said the agreement was expected to help unleash large-scale financing for Ukraine from international donors and partners, but gave no details. IMF staff currently expected the change in Ukraine's real gross domestic product for 2023 to range from -3% to +1%, Gray added. Ukrainian Prime Minister Denys Shmyhal hailed the agreement and thanked the IMF for its support. If approved, as expected, the Ukraine program would be the IMF's biggest loan to a country involved in an active conflict. The fund last week changed a rule to allow new loan programs for countries facing "exceptionally high uncertainty", without naming Ukraine.

☆ DBRS Morningstar cuts Credit Suisse credit rating to 'BBB'
▼ + stars: | 2023-03-16 | by ( ) www.reuters.com time to read: 1 min

March 16 (Reuters) - DBRS Morningstar became the first global rating agency to cut Credit Suisse’s credit score on Thursday, less than a day after a major share price plunge saw Switzerland’s central bank provide emergency support to the lender. DBRS downgraded the issuer rating of the bank to 'BBB' as it "continues to report missteps and compliance failures, resulting in a visible weakening of the franchise" and said the parent company's "ability to restore stakeholders’ confidence" is concerning. Credit Suisse's share tumble on Wednesday had threatened to spiral into a wider banking crisis, but a lifeline from the Swiss National Bank helped ease fears and at least temporarily stabilize the market. Reporting by Rodrigo CamposOur Standards: The Thomson Reuters Trust Principles.

Entities rated by MSCI ESG Research include Adani Green Energy, Adani Power, Adani Total Gas, Adani Transmission and Adani Enterprises, according to the statement. This week, MSCI ESG Research flagged all its covered Adani Group entities for the metric of accounting investigations, while some were flagged for the securities valuations metric, it said. "Across various Adani Group entities, MSCI ESG Research has identified issues relating to governance, board independence, related party transactions, and controlling shareholders," the company said. Since the short-seller report release, MSCI ESG Research has added "Bribery and Fraud" and "Governance Structures" controversy cases to all Adani Group companies in its coverage, it said. Sustainability ratings company Sustainalytics downgraded corporate governance-related scores for some Adani Group companies last month.

☆ Frontier countries to suffer most if Fed rate gets to 6% - analysts
▼ + stars: | 2023-03-09 | by ( Rodrigo Campos | ) www.reuters.com time to read: +5 min

"This mix is generally a net negative for emerging markets." A recent Barclays analysis showed a 50 basis point Fed rate hike would increase interest rate volatility, which "would be more destabilizing initially, as it typically comes with EM FX underperformance, which could trigger a further leg up in EM rates." Analysts at JPMorgan expect the dollar to weaken once the terminal rate stabilizes, but a 50-basis point Fed hike "would be a regime-shift in favor of outsized USD-strength." A 6% Fed rate environment alongside still-hot inflation does make short-term rates in Chile and India as well as Poland, the Czech Republic and Hungary most vulnerable, UBS found. Chinese equities could provide a safe haven in a 6% fed funds rate scenario, UBS said.

Feb 15 (Reuters) - Index provider MSCI said on Wednesday it will postpone implementation of updates to weightings for two of India's Adani Group companies, Adani Total Gas (ADAG.NS) and Adani Transmission (ADAI.NS), to the May benchmark review. The reversal of the updates to Adani Total Gas and Adani Transmission in the February index review will be reflected in the MSCI Index Product files starting from Feb. 16, MSCI said. MSCI will also apply a special treatment for all Adani Group's associated securities in the MSCI Equity Indexes starting from February. The new index weightings were due to come into effect on March 1 but the proposed changes to Adani Total Gas and Adani Transmission will be delayed until May. MSCI examined the size of companies' free floats, having determined there was "sufficient uncertainty" surrounding some investors in Adani companies.

☆ Exclusive: After costly bond issue, Mexico's Pemex banks on high oil prices to pay off debt -sources
▼ + stars: | 2023-02-15 | by ( Ana Isabel Martinez | ) www.reuters.com time to read: +4 min

The high cost of borrowing forced a recalibration in Pemex and renewed determination to avoid the market, two company sources familiar with the matter said. Pemex has said it must pay back some $8 billion of financial debt this year and $8.7 billion next. But both sources said Pemex was banking on high crude oil prices to maintain the investments for this year as well as meet its financial obligations - without issuing more bonds. Financial debt started ballooning years ago when the oil company took on debt to pay its debts. Pemex declined to reveal the total value of debt payments due and Reuters was unable to independently calculate the figure.

☆ 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.

☆ Explainer: What is at stake for investors in Nigeria's election?
▼ + stars: | 2023-02-13 | by ( Rachel Savage | ) www.reuters.com time to read: +4 min

Multiple exchange rates, widespread insecurity and low oil production due to massive crude theft are all problems that worry investors. Another focus is soaring fuel subsidy costs that devour government revenues and drive up debt. "No investor's going to want to buy into a market where you can't sell stock and get your money out," he said. Foreign investors held 16% of shares on Nigeria's stock exchange last year, sharply down from 58% in 2014, Nigerian Exchange Group data showed. Many investors, however, were cautiously optimistic that Nigeria would see improvements, whoever wins on Feb. 25.

☆ IMF says El Salvador's bitcoin risks have not materialized but 'should be addressed'
▼ + stars: | 2023-02-11 | by ( Brendan O'Boyle | ) www.reuters.com time to read: +2 min

Feb 10 (Reuters) - Risks over El Salvador's embrace of bitcoin "have not materialized," but use of the cryptocurrency still requires transparency and attention, the International Monetary Fund (IMF) said Friday in a statement after a visit to the Central American country. "Given the legal risks, fiscal fragility and largely speculative nature of crypto markets, the authorities should reconsider their plans to expand government exposures to bitcoin," the IMF said in a statement. El Salvador's move to make bitcoin legal tender in September 2021 effectively closed the doors to IMF financing. El Salvador's Congress last month passed a law regulating the issuance of digital assets by both the state and private entities. The IMF highlighted the "full recovery" of El Salvador's economy to pre-pandemic levels, "driven by the effective government response to the health crisis."

SYDNEY, Feb 10 (Reuters) - Index provider MSCI said it has cut the free-float designations of four securities of India's Adani group, a move which analysts have warned could impact their index weightings. MSCI said in a statement it has reduced the free floats of Adani Enterprises (ADEL.NS), Adani Total Gas (ADAG.NS), Adani Transmission (ADAI.NS) and ACC (ACC.NS). The remaining companies' free floats will remain the same. The four companies for which the free float designation change was announced had a combined 0.4% weighting in the MSCI emerging markets index as of Jan. 30. Analysts had said a change in free float status could affect the weightings of MSCI index constituents, possibly triggering a shift by funds as many investments are aligned to such indexes.

☆ Emerging markets growth slowdown bottomed out in 2022, but risks remain -IMF
▼ + stars: | 2023-01-31 | by ( Rodrigo Campos | ) www.reuters.com time to read: +4 min

NEW YORK, Jan 30 (Reuters) - The International Monetary Fund on Monday raised its output growth estimate on emerging markets for this year, with projections now showing the economic slowdown in the region may have bottomed out in 2022, on the back of China reopening, a resilient India and unexpected growth in Russia. Inflation, a recent hamper on growth, is seen high although continuing to slow this year and next. Russia, on the other hand, has seen a 2.6 percentage point increase in the 2023 growth projection, which translates to a view of a 0.3% expansion this year. Brazil and Mexico, Latin America's largest economies, were both upwardly revised in their 2023 economic growth by 0.2 and 0.5 percentage point, respectively. For Latam and the Caribbean, the overall increase in the growth estimate was just 0.1 percentage point, to 1.8%.

☆ A South American currency union? Don't hold your breath
▼ + stars: | 2023-01-23 | by ( Rodrigo Campos | ) www.reuters.com time to read: +4 min

That came after the leaders had touted a "common South American currency" on Sunday and officials told the Financial Times the tender could even be called the "sur" and eventually look to bring in other countries around South America. "It has failed to achieve simpler integration goals than that of a common currency." He called the idea of a currency union a "fantasy." Currency union talk was just a distraction, she said. Todd Martinez, a director at Fitch Ratings' sovereigns group focused on Latin America, said the two countries appeared to be unlikely partners to form a successful currency union, given their diverging economies.

Far from ignoring Lula's challenges to control the risks of this institutional shock, investors and analysts said however that the focus remains on fiscal issues when assessing the new government in the long term. If the new parameters are considered weak by the market, it could renew fears of fiscal dominance and prevent the BCB from easing." Discussions of the new fiscal framework are key under Lula's administration, after policymakers have highlighted inflationary risks arising from leftist President-elect's 168 billion reais ($32 billion) spending proposal to meet campaign promises. "The unsettled and deeply divided political environment and related high social tension keeps risk premia high and could undermine overall governability." (.JPMEGDBRAR)A mobilized opposition with the "potential to turn violent" is the main conclusion from Sunday's protests for the political risk advisory Eurasia Group.

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