Africa’s resource-centered economy has become another a victim of the coronavirus. China’s virus epidemic has shut off about 900,000 barrels of daily use in that country, weakening oil prices. That prompted the IMF to cut its 2020 growth forecast for Nigeria’s oil-based economy from 2.5 percent to 2.0 percent. Nigeria is Africa’s largest economy. China...
Tag: Feb 24 2020
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TURKEY DROPS INTEREST RATES AGAIN
Turkey’s central bank cut interest rates for the sixth time in a row, dropping its repo rate from 11.25 percent to 10.75. With inflation clocked at 12.15 percent, the real interest rate – the difference between the interest rate and inflation – is -1.40 percent. President Tayyip Erdoğan is pressuring the bank to bring interest...
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SWEDEN: TIME TO MOVE BEYOND NEGATIVE INTEREST RATES
Sweden’s central bank has ended its five-year experiment with negative interest rates, raising its repo rate from -0.25 percent to zero on 20 February. Other tools will be needed to guide economies through the coming global downturn, says Stefan Ingves, the bank’s governor. Because negative interest rates put banking systems in jeopardy, government spending and...
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SOUTH KOREA’S ECONOMY GETS THE VIRUS
South Korea must take “emergency steps” and “all possible measures we can think of” to keep its China-dependent economy from crashing during the region’s coronavirus outbreak, president Moon Jae-in said last week. “The current situation is more serious than we thought,” he noted. The country has begun a $356-million emergency loan program to support retailers,...
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JAPAN: POISED FOR RECESSION AS “ABENOMICS” FAILS, YEN WEAKENS
Following his 2013 election, Japan’s prime minister Shinzo Abe announced his “three arrows” of change to lead the country away from sluggish economic performance and periodic deflation. The arrows included the central bank’s large-scale “quantitative easing” scam to purchase government and corporate bonds; flexibility in tax rates and government spending; and reforms to spark greater...
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CHINA: RATES FALL, DEFAULTS EXPECTED TO RISE
China’s banks have cut the prime rate on one-year loans to 4.05 percent, down 0.10 percent. The cut had been expected as the government is taking measures to stimulate the economy in the midst of the continuing economic slowdown, now worsened by the coronavirus epidemic. S&P Global Ratings has warned that the ongoing, long-term decline...
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GERMAN COMPANIES WARN OF FALLING PROFITS
More than 300 of Germany’s leading companies issued more than 170 negative forecasts for profits and sales in 2019, a record number, according to professional services firm Ernst & Young (EY). The number is 25 percent greater than in 2018 and the most since 2012, when EY began keeping records. Chemical firm BASF and automakers...
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HSBC CUTS JOBS, STOCK PRICE DIPS
HSBC, Europe’s largest bank with $2.5 billion in assets, is cutting 35,000 jobs and dumping $100 billion in riskier investments by the end of 2022. The bank is shrinking its lending in Europe by 35 percent and in the U.S. by 45 percent, while redirecting those assets to higher-growth areas mainly in Asia, where it...
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CORONAVIRUS CRASHES AIRLINE REVENUES
Airlines around the world have cancelled thousands of flights to or through China, and some Asian carriers report be near to failure from the loss of revenue. In recent years, China has become the world’s second largest airline market, behind the U.S. Many airlines added routes and staff and bought more planes to service that...
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