Bloomberg (May 22)
“Investors dumped Brazil’s stocks and currency Thursday as the country’s ever-proliferating corruption scandal spread to President Michel Temer. This latest twist in a seemingly endless saga not only threatens to stall vital economic reforms but also comes close to showing that the corruption in Brazil’s government is literally beyond control.”
New York Times (January 9)
India’s “man-made currency crisis” has had real costs and limited benefit. Two months after the surprise move to invalidate over 80% of existing currency, “the manufacturing sector is contracting; real estate and car sales are down; and farm workers, shopkeepers and other Indians report that a shortage of cash has made life increasingly difficult.”
Tags: Benefit, Car sales, Contracting, Costs, Crisis, Currency, Farm workers, India, Manufacturing, Real estate, Shopkeepers, Shortage
Bloomberg (December 4)
In India, “the chaos accompanying ‘demonetization’ hasn’t eased up noticeably. It seems likely the disruption to the economy…will hit growth sharply for at least a few quarters. It’s tough to say for how long and by how much; we are in uncharted territory here and guesses have varied widely.” There is a very loose consensus, however, that the move by Prime Minister Modi to invalidate 86% of the currency in circulation could cause GDP growth to fall by approximately 2 percentage points.
Tags: Chaos, Currency, Demonetization, Disruption, Economy, GDP, Growth, India, Modi
Bloomberg (November 16)
“One week after India’s sudden declaration that 500- and 1,000-rupee notes were no longer legal tender, the economy is in chaos.” Designed to shake out black money, “what seemed at first to be a masterstroke by Prime Minister Narendra Modi now looks like a grave miscalculation.” The move invalidated over 80% of the currency in circulation, crippling the economy. “The central bank has struggled to print replacement denominations—and the new notes are the wrong size for existing ATMs.” It could be months before things return to normal.
New York Times (October 5)
The Brexit “reality is that Britain has a lot to lose in leaving the union, and that putting a two-year limit on the negotiations further weakens an already shaky hand.” Following Prime Minister May’s announcement of a timetable for withdrawal, “the prompt plunge of the British currency to a 31-year low against the dollar provided a far louder response than the misguided cheers of her fellow Conservative Party members.”
Bloomberg (February 12)
The Bank of Japan’s “decision to adopt negative interest rates has failed to rein in the currency’s advance.” In part, this is because money managers are advising wealthy families to favor the yen amid the turmoil in global financial markets. As a result, the yen is outperforming “all 31 other major currencies this year as Japan’s current-account surplus makes it attractive for investors seeking a haven.
Tags: Attractive, BOJ, Currency, Current-account, Haven, Interest rates, Investors, Japan, Money managers, Outperforming, Turmoil, Wealthy, Yen
The Economist (January 30)
Nigeria’s President Muhammadu Buhari “is repeating an economic error he made as dictator 30 years ago.” To avoid devaluation, he has instead thrown limits on imports, creating scarcity that “will be even more inflationary. A weaker currency would spur domestic production more than import bans can and, in the long run, hurt consumers less. The country needs foreign capital to finance its deficits but, under today’s policies, it will struggle to get any.”
Tags: Buhari, Capital, Consumers, Currency, Deficits, Devaluation, Dictator, Import bans, Inflationary, Nigeria, Production, Scarcity
USA Today (July 30)
“The Chinese government certainly likes to control things. It keeps its currency artificially low to promote exports. It meddles heavily in real estate prices. And it is obsessed with controlling information on the Internet. But nothing has been as jarring to American sensibilities as its recent efforts to prop up stock prices.”
Tags: China, Currency, Exports, Government, Internet, Real estate, Stock prices, U.S.
Bloomberg (April 24)
“European Union leaders have been unequivocal in their insistence that Greece has been ring-fenced, and that the common-currency project can survive the departure of its weakest member. They may be right; but we won’t know for sure whether contagion is alive or dead unless and until Greece bows out.”
Tags: Contagion, Currency, EU, Greece, Ring-fenced
Institutional Investor (April 20)
“Like an old couple that can’t seem to stop fighting, Greece and its European Union partners are wondering if it’s time to head for divorce court.” The long-running saga has “been threatening to undermine the single currency for more than five years. Yet the Greek crisis appears to be entering a new, and potentially fatal, phase as exhaustion and mutual recriminations push both sides to the brink of an irrevocable rupture.”
