Country Risk Update
Welcome to the latest issue of D&B's Country Risk Update.
In mid-December, the US Fed finally raised its target range for the short-term Federal Funds rate to 25-50bp, bringing an effective rate of 0.37%, in the first rise in almost a decade. Earlier in December, the ECB eased its monetary policy slightly, going deeper into negative interest rate territory.Nevertheless, the expansion in the ECB’s ‘QE’ asset purchase programme was modest, reflecting the absence of monetary doves such as France from the ECB governing council vote.
The appreciation of EUR:USD rate will be more modest, accordingly. However, the Fed will have to communicate with great clarity to prevent destabilising uncertainty in 2016: financial markets are pricing in two rate rises in 2016, against the Fed’s forward guidance, which envisages four rate rises.
Three challenges now face economies: higher US interest rates and a strong US dollar; deleveraging and restructuring in China; and the disruptive effect of low oil and metals prices. Countries such as Turkey and Malaysia, with relatively high US denominated-debt are still vulnerable to the first headwind. Not only China’s suppliers in Asia, but also South Africa, Brazil, Russia and Australia will see first- and second-order negative demand shocks persist into 2016, from China’s transition. Finally, among oil exporting countries, those with US dollar pegs such as Saudi Arabia, will be particularly exposed, as they will face simultaneous fiscal and balance of payments challenges.
This complimentary newsletter from D&B's Country Insight Services group has been put together by their team of experts using the most up-to-date information to provide a snapshot of the latest macro market risk situation, and provides an excellent overview for those exposed to cross-border credit or investment risks.
D&B Country Insight Snapshots
Designed with the help of our customers these reports build on the key areas assessed by 'D&B's Country Insight Model' and deliver a perfect balance between mitigating risk exposure and providing insight into new opportunities.
Dun & Bradstreet upgrades Cote d'Ivoire's country risk rating as the economy's rapid growth looks set to continue..
Read D&B Country Insight Snapshot: Cote d'Ivoire.pdf
Dun & Bradstreet downgrades Poland's country risk rating after worrying developments in the legal sphere.
Read D&B Country Insight Snapshot: Poland.pdf
Dun & Bradstreet downgrades Ecuador's country risk rating following unfavourable constitutional reforms.
Read D&B Country Insight Snapshot: Ecuador.pdf
To learn more about how these improvements have been designed to meet your needs when trading overseas, please use the contact details below.
Looking For Different Countries?
D&B Country Insight Services provides analysis on over 130 countries worldwide and its products are available for purchase online by D&B subscribers.
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