Citigroup Inc. and Deutsche Bank AG were among the lenders recommending investors to short the South African rand last week as deadly riots threatened to derail an incipient economic recovery. Chile’s peso is also seen as vulnerable relative to more stable units such as the Russian ruble.With elections coming up in many major developing nations over the next three years and the pandemic worsening socio-economic fault lines, “political long Covid” may cast a widening pall, according to Bank of America Corp. Of particular concern is what that means for monetary policy, as central banks weigh the risks of higher inflation against the need for economic support.
Analysis-Violence gives South African markets a reality check
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Analysis: Violence gives South African markets a reality check
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A South Africa ETF Jumps as Political Instability Continues
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China s RRReminder that economies remain fragile
By Marc Jones and Tom Arnold
Reuters
LONDON (Reuters) -China s decision on Friday to give its economy a 1 trillion yuan ($154 billion) shot in the arm has given investors a reminder that even the largest economies are likely to need the occasional pick-me-up while the coronavirus pandemic lasts.
In one of its trademark Friday night moves, the People s Bank of China (PBOC) cut its reserve requirement ratio (RRR) - the money banks have to park at the central bank for safety - by 50 basis points (bps).
It is the first such step since April last year when COVID was rapidly spreading around the world. Just as significantly, it ends nine months of gradual policy tightening by authorities eager to prevent credit growth getting out of control.