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’Emerging Europe outlook: still bleak
It’s still not looking good for Emerging Europe according to the latest report on the region from Fitch:
Growth in EE is expected to drop more than in other regions as the characteristics of many countries — such as trade openness,
CEE’s stand against SPECTRE-lators
The interesting thing about the Central and Eastern European crisis is how quickly it turned. Even six months ago, economists and city analysts were saying more established markets like Poland and the Czech Republic would sail through the financial crisis largely unscathed.
EU to CEE: ‘Non’
Writing on Friday ahead of the EU summit, Erik Berglöf, chief economist at the European Bank for Reconstruction and Development, said (our emphasis):
There is much to suggest that it was the belief that EU’s leaders will stand by Eastern Europe that prevented a full-blown meltdown last week.
Eastern Europe gets €24.5bn
Eastern Europe has received its own special bailout after all. Well, not technically a bailout, it comes as “aid” via the World Bank, European Bank for Reconstruction and Development and the European Investment Bank in a bid support the region through its first technical recession since the breakdown of the communist system.
CEE’s western exposure
CEE currencies were on the ascent on Monday, alongside stocks in Warsaw. That was ahead of a much-awaited interest rate decision by the Hungarian central bank at 1pm GMT. The MNB was expected to hold rates despite worsening economic data which would normally warrant an interest rate cut just to support the forint.
ERM, convergence might not work
When fear of foreign exchange exposure wrought havoc in Eastern European markets last October, the region’s chief saving grace was a ubiquitous commitment to accelerating its entry into the euro zone; this was particularly true of Poland and Hungary.
Things can only get worse in Eastern Europe
German manufacturing orders fell by 6.1 per cent in October from September according to the latest figures from the German Economy Ministry. Those figures were much worse than the 0.5 per cent decline expected by analysts.
Diminishing reserve requirements
The Hungarian central bank has surprised with a 50 basis point rate cut to 11 per cent, just a month after hiking rates by 300 basis points and reaching out for a $25bn IMF-led bailout.
Analysts had expected Hungary to keep rates unchanged.
IMF and EU in $25.1bn rescue deal for Hungary
Reuters reports the International Monetary Fund, the European Union and World Bank yesterday agreed to a $25.1bn economic rescue package for Hungary to help it deal with the effects of the financial crisis.
The EE mortgage
Eastern Europe, that is, a part of the world that has seen a shocking boom in mortgage lending over the last few years.
In fact, even as most mortgage lending was beginning to freeze up in the west,
Would you like some chips with that Argentine exposure?
BNP Paribas has done the number crunching for us, working out European banks’ exposures to Argentina/Latin America. Not just that, they’ve worked it out for other emerging markets as well.
First, to the south:
Hungary lifts rates to defend currency
Hungary yesterday raised its base interest rate 300 basis points in an attempt to support the currency and stabilise financial markets reeling from the global credit crisis. The central bank’s unexpected
Oops – Hungary hikes rates afterall
Hungary’s decision just days ago to hold rates tight in the face of a major forint sell-off and all-round capital flight appears to have been a tad shortsighted.
Having failed to quell a growing sell-off across Eastern Europe,
Hungary NOT the next Iceland, apparently
For those thinking Hungary could become the next Iceland:
The only thing in common is that we also have a lot of thermal water under the ground, Economy Minister Gordon Bajnai said in an interview on Bloomberg.
Investors flee emerging markets as instability fears mount
Consider Iceland. Or Pakistan. Or Hungary. Or Ukraine. Or South Korea.
Investors are pulling money out of emerging market bond and equity funds, and it’s not hard to see why.
Funds dedicated to emerging markets endured one of their worst weeks on record in terms of outflows,
Hungary, Ukraine look to IMF
The global credit crisis took a fresh turn on Thursday as Hungary and Ukraine approached international institutions for support in an effort to avoid following Iceland into financial turmoil. The mood in Europe was unsettled as Budapest received a €5bn credit facility from the ECB and Kiev said it was seeking an IMF loan of up to $14bn to “stabilise Ukraine’s financial system”.
The next domino to fall in eastern Europe? Not Hungary
With the events of the last week investors are asking themselves whether Hungary is the next Iceland. The Hungarian forint lost over 6 per cent yesterday before recovering a bit of lost ground today, while its stock market has also been hit hard.