No surprises there then. Brazil’s central bank voted on Wednesday to keep the country’s benchmark interest rate steady at its all-time low of 7.25 per cent.
However, the accompanying statement from the central bank was a little more direct than normal.
Venezuelan state oil company PDVSA’s ubiquitous propaganda constantly trumpets the fact that it now belongs to “everyone”, since control of the oil giant was wrested from opponents of Hugo Chávez ten years ago.
But to paraphrase George Orwell, one could say that its wealth belongs to some people more than others – take the example of Sun Weijie, the Chinese businessman who has just become a billionaire on the back of a juicy supply contract with PDVSA.
South Africa just can’t quite shake off the bad times. After a torrid 2012 of strikes and unrest, there has been a clutch of economic data that show mild improvement which then revert back down.
On Wednesday, it was the turn of the PMI – an index of manufacturing sentiment. Having had a better showing in November, reaching 49.5 (seasonally adjusted) – just shy of the 50 mark that separates expansion from contraction – the December figure has come in at 47.4, back towards the bad days of October. Retail sales and mining production tell a similar story.
The conflict in Mali has intensified following the onset of a major French military intervention and promises by Islamists to retaliate against western targets across the region. What might be the economic spillover effects of the conflict?
Mali may not play an integral role in the world economy, but many of its neighboring countries do as suppliers of key petrochemicals and minerals – so the potential for disruption from the conflict is more significant than it might at first seem.
Russia has a habit of chewing up invaders – a feat repeated with distiller Central European Distribution Company, whose attempt to become Russia’s dominant vodka producer brought the company to the brink of collapse and put it in the hands of its Russian rescuer.
After a public battle late last year for control of CEDC between Roustam Tariko, a Russian billionaire and founder of Russian Standard and the CEDC board, it now appears that the Russians have taken effective control of CEDC.
Brazil is still basking in the successful conclusion of its so-called “trial of the century”, the mensalão case, in which senior former members of the government of ex-president Luiz Inácio Lula da Silva were convicted of implementing a vote-buying scheme in Congress in the early years of his leadership. The case was hailed as the beginning of the end of Brazil’s culture of impunity, in which politicians and the rich rarely are held accountable for their actions.
The beginning of the end, perhaps – but still very far from the end, unfortunately.
Russia has piled into the latest outbreak of the currency wars, with a top central banker warning of serious consequences of what he said were Japan’s moves to weaken the yen in a bid to boost its stagnant economy.
According to Reuters, Alexei Ulyukayev, the central bank’s first deputy chairman, said on Wednesday: “We’re on a threshold of very serious, confrontational actions in the sphere that is known… as currency wars.”
With Russia holding the G20 presidency this year, these words will resonate, especially as they came only hours after an intervention from South Korea.
Household investments in mutual funds can tell you a lot about a country. They should be a proxy for economic development, as more cash to spare means more to invest. But they can also reflect things like the state of the welfare system and cultural attitudes towards investment. Generali PPF Asset Management has analysed data from the past eight years on this subject for central and eastern Europe and the results make interesting reading.
The past year was a difficult one for many Arab countries undergoing historic political and economic change – Egypt, Jordan, Libya, Morocco, Tunisia and Yemen. The environment is challenging, but the underlying hope remains the same – a new society based on greater openness, greater opportunity and greater equality, writes Christine Lagarde, managing director of the International Monetary Fund, in the FT .
The first building block of a more inclusive economy must surely be macroeconomic stability. Unfortunately, this has come under threat in some countries – from slowing global growth, growing social tensions and rising political pressures.
* Russia says world is nearing currency war
* Workers down tools at South Africa’s Amplats
* Apple rolls out China credit facility
Wednesday’s picks from the beyondbrics team: Chinese banks struggle to maintain sound lending practices while riding a wave of cash; averting an economic crisis could prove Morsi’s toughest challenge yet; meet the Polish window maker taking on the world; what to make of the Vietnamese stock market rally, and Brazil’s lag; plus, a reality check on the Russian economy.
Romania’s economy may be recovering from a deep crisis, but it is not recovering quickly enough for the country’s main lender, BCR.
Austria’s Erste Group this week announced that it would take a €300m goodwill charge largely due to the problems besetting BCR. So even if the International Monetary Fund is reasonably content with Romania’s economic progress, a key foreign investor is far from happy.
The currency war rumbles on. As Bloomberg reports on Wednesday – under the headline “emerging markets backlash” – South Korea wants a meeting of G20 finance ministers and central bank governors in Moscow next month to focus on the adverse affects of easy money in the US, EU and Japan.
Korea has certainly been feeling the heat. The eurozone crisis dampened demand for its exports throughout 2012. Seoul says exports remain under threat from a stronger won and growing protectionism around the world. But will words translate into actions?
From time to time concerns are raised that Hong Kong could one day be eclipsed by financial centres on the Chinese mainland, notably Shanghai. But such fears are overblown according to a new report from HSBC’s Donna Kwok, which says Hong Kong has quite enough advantages to avoid being put in the shade any time soon.