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Macro Notes: Russia - BoP Buildup of Foreign Assets

Low breakeven oil price for the current account provides buffer against shocks. Introduction of the fiscal rule in 2017 has led to significant reserve accumulation. Debt repayments spiked after the 2014 sanctions but are now less of a concern. However, private sector capital outflows have picked up and may accelerate. Portfolio inflows have returned but are sensitive to sanctions announcements.

China Views: Is External Debt a Devaluation Constraint?

China’s $2 trillion external liability seems large, but is manageable given China’s GDP, exports, and foreign assets. FDI loans, trade credits, and bank deposits are relatively sticky. China’s external debt overhang should be a minor concern for BoP and RMB depreciation. 

IIF August Insurance Update and Podcast with Jonathan Dixon (IAIS)

The August 2019 IIF Insurance Update provides updates on:   IIF Submits Response to the IAIS Consultation on Supervisory Materials Relat...

Lebanon: Wake-Up Call

Lebanon’s economy is at a turning point. Despite the recent downgrades we still believe that Lebanon will not default given its sizable international reserves, robust banking system, and a track record of having never defaulted on foreign-currency debt. 

IIF Capital Flows Tracker: Trade Tantrum Revisited

During August, EM stocks and bonds suffered the worst outflows since November-2016. Our broader measure of net capital flows, which lags by one month, shows a reversal of net flows from June to July, from -$42.0 bn to $5.2 bn.

Global Macro Views: RMB Weakening and EM Contagion Risk

Mounting trade tensions are putting depreciation pressure on the RMB. We investigate contagion risk to the rest of EM from further RMB weakening. During the surprise RMB devaluation in august 2015, commodity currencies like the Russian Ruble and Colombian Peso were hit most, as markets traded weaker global growth and thus falling commodity prices. We see this as a good template for possible contagion effects now.

FRT Episode 46: New IIF Machine Learning Report

With the IIF Machine Learning in Credit Risk 2nd Edition Report tracking the industry’s progress with these technologies over the past year, leading contributor Paul Edwards (Scotiabank) joins IIF report authors Brad Carr and Natalia Bailey to discuss the survey’s key findings.

Macro Notes: Impact of Sanctions on Russian Assets

The US and EU have introduced numerous financial sanctions on Russia. The first episode of multilateral sanctions in 2014 had the biggest impact. Limiting investor access to the Ruble market (OFZ) is unlikely to be as severe. Existing sanctions will weigh on investment, productivity, and growth.

Saudi Arabia: Investors’ Appetite For Saudi Equities Spiked Despite EM Sell-Off

Portfolio investments will be the main driver of foreign capital inflows increase to Saudi Arabia in 2019. Supported by the MSCI upgrade, Saudi Arabia has attracted $18 billion in foreign equity inflows so far this year.

Digital IDs in Financial Services Part 1: Embedding in AML Frameworks

As the first in a new 3-part series on Digital Identity, this paper explores the key considerations for international standard setters and local regulators on how to embed Digital Identity and promote widespread uptake. 

 

 

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