Wasn’t it the case, about five years ago, that Ecuador’s foreign debt was “illegitimate” and its bondholders “real monsters”?
Well, it seems time cures everything. Rafael Correa, Ecuador’s leftwing president, said at the weekend his country was planning its first international bond issue since defaulting on $3.2bn of foreign debt in 2008 – and, six months later, buying most of it back at 35 cents on the dollar. Continue reading »
One of the world’s most complex foreign exchange regimes, in a country with some of the world’s cheapest petrol, is wiping out profits at some of the world’s biggest carmakers.
First, Ford said it would take a charge of $350m in the first quarter because of currency losses in Venezuela, adding to its woes after a $126m loss on its South American operations in Q4 2013 caused by downtime in Brazil preparing for new products and “limited availability of US dollars” in Venezuela. Continue reading »
In another sign that Colombia’s economy is on track, data released on Thursday by the national statistics agency show GDP growth of 4.3 per cent last year, beating market consensus by a whisker. Continue reading »
Another sign of the stresses in Venezuela’s economy: annual inflation hit 57.3 in February according to the central bank, up from 56.3 per cent in January.
The numbers were bad enough for Nelson Merentes, central bank president, to admit at the weekend that Venezuela was in an economic crisis. Continue reading »
The unrest that has left at least 20 people dead goes on in Venezuela. Over the weekend, protesters were confronted by security forces while attempting to make an “empty pots march” on the food ministry in Caracas, fed up with worsening shortages that have left one in four basic goods missing from the city’s shops.
One cause is a chronic, government-imposed shortage of dollars to pay for imports. While resisting calls for wholesale reform, on Monday officials are set to launch a new, less stringent system of foreign exchange controls that, it is hoped, will provide some relief. Continue reading »
Quel Panama was an expression used in France at the beginning of the last century to describe an unsolvable muddle. It became popular after Frenchman Ferdinand de Lesseps attempted – but failed catastrophically – to dig the Panama Canal after his success with the Suez Canal.
Given the stand-off that has brought work to expand the canal to a near halt, it’s an expression that would well be in vogue again. But after weeks of wrangling the Panama Canal Authority and the construction consortium working on one of the world’s great trade conduits have shaken hands in a deal aimed at finishing the project by the end of next year. Continue reading »
A year ago Rafael Correa, Ecuador’s leftwing president, was riding high after winning a third term in a landslide election.
Some say his party, Alianza País, got too used to winning. This week, Correa was looking more subdued after the opposition won the country’s key mayoralties – Guayaquil, Cuenca and, most painfully, the capital Quito – in Sunday’s local elections. Continue reading »
Demonstrators are still out in the streets of Caracas venting anger over a raft of problems, including rampant shortages of basic goods, which economists say are a by-product of foreign currency restrictions.
Unrest has been mounting in Venezuela, as pro-and anti-government groups keep clashing. Amid such mayhem, the government took some time to fiddle, once again, with its foreign exchange system, this time introducing the new “Sicad 2.” Continue reading »
Those times of stellar annual growth rates of 6, 7 or 8 per cent that Peru experienced in recent years may be gone, and the country might now be dealing with a current account deficit.
But the Andean nation still has quite a vibrant economy, which in 2013 expanded by 5 per cent, the national statistics agency said on Friday. Continue reading »
Peru's Ollanta Humala, Chile's Sebastián Piñera, Colombia's Juan Manuel Santos, Mexico's Enrique Peña Nieto and Costa Rica's Laura Chinchilla in Cartagena, Colombia
It’s all about free trade. The Pacific Alliance, a growing bloc in Latin America that stands among the world’s 10 largest economies, sealed a deal on Monday to eliminate tariffs on 92 per cent of goods and services in a move that distances it further from some of its more protectionist neighbours.
“I don’t think there has been an integration process that has taken decisions so fast as the Pacific Alliance has done,” Colombia’s President, Juan Manuel Santos, told beyondbrics. Continue reading »
In the last week an international court ordered Bolivia to pay $41m in compensation to UK-based power generator Rurelec for the nationalisation of its assets. After a stream of seizures in recent years, the move could set a precedent for other companies waiting for reparations from the Andean country’s leftwing government.
However, to some observers there is a big question looming: will Bolivia actually pay up? And if so, when? Continue reading »
While once the Colombian coastal city of Cartagena was raided by Sir Francis Drake in the days of the gold-grabbing deeds of Elizabethan navigators, the page was turned on that era of history and for almost a decade now it has been home to a successful offshoot of the UK’s Hay Festival of Literature. Now it seems that the country’s links with the UK are about to be entering yet another new chapter. Continue reading »
It has been a while coming but after a UN ruling on Monday it is finally time for Chile and Peru to put their maritime differences behind them.
The International Court of Justice in The Hague has given Peru a chunk of the Pacific Ocean it did not have before, while Chile has retained its rich coastal fishing grounds. So, despite smug smiles and gnashing of teeth in some corners of both countries, what looks like a split sovereignty ruling should reinforce the pledge Peru and Chile have made to remain good neighbours. Continue reading »
Amid a heavily distorted economy battling a spiralling black market rate for greenbacks, Venezuela on Wednesday finally unveiled plans to reform its tight currency control system that has been in place for more than a decade, a move that market watchers say amounts to a stealth devaluation.
“We are creating a system of bands in a new currency system,” said Rafael Ramírez, the president of the state oil company PDVSA, who is also the energy minister and vice president in charge of the economy, during a news conference. He insisted that, “this is not a devaluation, but a different foreign exchange system, with bands.” Continue reading »
Calling all courageous bond-buyers out there! Ecuador says it is trying to re-enter the bond market, taking advantage of rising demand for emerging market debt.
Patricio Rivera, the minister for economic policy, told reporters on Wednesday the leftwing government might issue debt during the first half of this year. Continue reading »