• The Chinese yuan strengthened slightly against the U.S. dollar on Wednesday, reversing a sharp weakening trend after the People’s Bank of China (PBOC) signaled support for its currency. 
• The yuan has tumbled by about 3% this month as the U.S. dollar strengthened, according to Wind Information. Prolonged Covid controls and worries about Chinese economic growth have also weakened sentiment on the yuan. 
• On Monday, the PBOC announced it would cut the deposits by 1 percentage point to 8%, effective May 15. The move reduces the amount of foreign currency that banks need to hold, theoretically reducing the amount of weakening pressure on the yuan. 
• “Looking forward, we expect this reserve ratio cut to slow down CNY depreciation in the near term, though it would also depend on the broad USD path and overall sentiment toward Chinese growth,” Goldman Sachs analyst Maggie Wei and a team said in a report Monday. “Uncertainties are still high with Shanghai facing protracted lockdown and new local Covid cases rising in Beijing.”

(Source: CNBC News)

• The IMF is predicting major growth of 11.2% for the Barbados economy this year and 4.9% in 2023, even as it downgrades its global growth forecast. At the same time, the fund is predicting that with the most vulnerable globally facing added pressures from rising prices, countries could be faced with social instability and food insecurity. 
• This healthy growth rate, which is in line with double-digit projections by the Barbados Central Bank at the start of the year, comes against the backdrop of a surge in consumer prices and other elevated risks as a result of the COVID-19 pandemic and war in Ukraine. 
• Noting that the Russia-Ukraine war will contribute to a significant slowdown in global economic growth this year, the IMF is predicting global growth of 3.6% for this year and next year, down from the 4.4% for this year and 3.8% for 2023, which was predicted back in January. 
• The Russia-Ukraine war, coupled with the continued effects of the COVID-19 pandemic, rising inflation, and expected bottlenecks in supply chains as a result of the new lockdowns in China should also result in a continued rise in inflation globally. Consequently, in the case of oil and other commodity importers such as Barbados, the IMF official cautioned that a surge in prices could spell trouble, with the war adding to a series of supply chain shocks that will spread “far and wide.
• Against this backdrop, inflation is expected to remain elevated for much longer and may lead to more aggressive responses from policymakers. However, the IMF is willing to provide assistance and urges countries to put “carefully calibrated and temporary” fiscal and monetary measures in place to help provide ease to their population.

(Source: Barbados Today)

• Grenada has received EC$281.6 million during the fourth quarter of 2021 from the Citizenship by Investment Program (CBI) according to the figures released by the Ministry of Finance. 
• However, the Permanent Secretary in the Finance Ministry, Mike Sylvester, who is also the interim chairman of the CBI Committee, said that not all of the EC$281,610,000 ended up in the Consolidated Fund. 
• Under the CBI program, Grenada provides citizenship to foreign investors in return for making a substantial investment in the socio-economic development of the island. The other source of income for the government under the CBI is the National Transformation Fund (NTF) and according to the Ministry of Finance, the amount the government received for the fourth quarter was EC$52,812,000. 
• Caribbean countries continue to face pressure from international groups to end the CBI program, The United States has moved to decline visas to holders of passports obtained by the CBI, and the European Union has passed a law giving countries three years to phase out the program or face visa requirements for all its passport holders.

(Source: Caribbean Nation Weekly)

• A White House adviser on Thursday suggested the United States could lower tariffs imposed on a host of non-strategic Chinese goods such as bicycles or apparel to help combat inflation. 
• Deputy National Security Adviser Daleep Singh said tariffs imposed by the former Trump government may have given the administration some negotiating leverage, but these tariffs served no strategic purpose, and China had similar non-strategic retaliatory tariffs in place. 
• Inflation is a critical concern for President Joe Biden, whose approval ratings are falling as the costs of energy, food and other staples increase, and his Democrats are at serious risk of losing their majorities in Congress in midterm congressional elections in November. 
• U.S. Trade Representative Katherine Tai has restarted an exclusion process that could lower tariffs on some Chinese goods, but has made no major moves to wholesale remove tariffs on hundreds of billions of dollars of Chinese goods. 
• Singh noted that the United States could use tariffs to advance strategic priorities such as strengthening critical supply chains and maintaining U.S. preeminence in foundational technologies and to support national security.

(Source: Reuters)

• iCreate Limited (ICREATE) has acquired a majority stake in e-commerce company, GetPaid Limited. The details of the acquisition have not been disclosed, but this is being touted as a pivotal part of the company’s turnaround strategy. 
• Tyrone Wilson, Founder and Chief Executive Officer has stated that, iCreate has an aggressive M&A strategy as part of its Opportunity Ventures Division that was disclosed at the recently held Annual General Meeting (AGM) in January.
• The company sees GetPaid Limited as an opportunity to tap into new market potential while staying true to its vision, which is to aid in the development in the digital and creative economy. 
• ICREATE’s decision to increase exposure in the e-commerce industry is warranted, given the expectation for growth in this industry. However, due to its growth potential, competition in the space is expected to intensify.

(Source: JSE and NCBCM Research)

• Even as countries the world over continue to grapple with the effects of the COVID-19 pandemic and the ongoing war in Ukraine, the economic prospects for Guyana remain positive at the close of the first quarter of 2022, according to the International Monetary Fund (IMF). 
• The geopolitical crisis unfolded while the global economy was on a mending path, but had not yet fully recovered from the COVID-19 pandemic, with significant divergence between the economic recoveries of advanced economies, emerging markets, and developing ones. 
• Guyana, though also being susceptible to the economic shocks that are affecting countries across the world, is positioned to maintain a positive economic standing because of its burgeoning oil and gas sector, and prudent fiscal planning. 
• According to the IMF, Guyana remains on course to achieve Gross Domestic Product (GDP) growth of 47.2% at the end of this year and a further 34.5% at the end of 2023. Notably, The World Bank, after assessing the economic performance of countries during the period 2019-2021, had announced recently that Guyana recorded the highest cumulative economic growth in the Caribbean and Latin American region. 
• The international financial institution determined that the country recorded cumulative economic growth of 72.03%, and the closest nation behind Guyana was Nicaragua, which recorded cumulative economic growth of 7.53%. With this rate of overall growth, Guyana ranks among the fastest growing economies worldwide. 
• The resilience of the country’s economy is being demonstrated as the nation continues to progress despite grappling with the effects of the COVID-19 pandemic, and, more recently, Russia’s invasion of Ukraine.

(Source: Guyana Chronicle

• Oil prices jumped on Wednesday, as a large increase in U.S. crude inventories failed to soothe worries about tight global supply, with major oil traders expected to shun Russian barrels. 
• Brent crude settled up $4.14, or 4%, to $108.78. U.S. West Texas Intermediate (WTI) crude futures ended up $3.65, or 3.7%, to $104.25. 
• The gains came a day after both benchmarks climbed more than 6%. The oil market has swung wildly as end-users and traders have tried to quantify the disruption in Russia's daily exports following its invasion of Ukraine. Most estimates range from 1.0Mn to 3.0Mn barrels per day. 
• On Tuesday, the International Energy Agency (IEA) lowered expectations for worldwide demand and said rising global production could offset Russian oil output losses. The IEA said it expects Russian output to drop 1.5Mn bpd in April, growing to close to 3.0Mn bpd from May. 
• The White House is releasing 180.0Mn barrels from U.S. reserves over six months, part of a release of 240.0Mn barrels from members of the International Energy Agency. U.S. production is expected to keep rising from 11.8Mn bpd now to about 12.0Mn in 2022. 

(Source: Reuters)

• Prices for wind and solar power in major global markets have climbed nearly 30% in a year as developers have struggled with chaotic supply chains and surging costs for everything from shipping to parts to labour, according to a report published on Wednesday. 
• Contract prices for renewables jumped 28.5% in North America and 27.5% in Europe in the last year, according to a quarterly index by LevelTen Energy that tracks the deals, known in the industry as power purchase agreements (PPAs). LevelTen noted that in the first quarter alone, prices rose 9.7% in North America and 8.6% in Europe. 
• Economic, logistical and labour market disruptions during the coronavirus pandemic have worsened since the Russian invasion of Ukraine, reversing a decade of cost declines for the renewable energy sector. 
• There is a risk higher costs could slow demand growth at a time when the United Nations has called for clean energy to expand more rapidly to avoid the worst effects of a warming climate.

(Source: Reuters)

• For the month of March, the All-Jamaica Consumer Price Index (CPI) increased by 1.6%. March’s outturn meant that point-to-point inflation was 11.3% for the 12 months to March 2022, up from the 10.7% reported in February 2022. This puts inflation outside the BOJ’s target range of 4% to 6%, for the 8^th consecutive month. 
• For the month of March, the rise in inflation was largely driven by the 1.9% increase in the index for the ‘Food and Non-Alcoholic Beverages’ division, especially the ‘Food’ sub-group. This was impacted by higher prices for tomato, cabbage, onion and sweet pepper. 
• Also contributing to the higher inflation rate was the 3.9% upward movement in the division for ‘Housing, Water, Electricity Gas and Other Fuels’, and 0.6% increase in the ‘Transport’ division. This was caused by higher electricity rates, and fuel and lubricant prices, respectively. 
• The current breach in the inflation range is in-keeping with expectations, as the BOJ noted on February 18, 2022, that inflation was projected to successively breach the target for the next 8 to 10 months. The elevated rates will likely be driven by the continued transmission of higher international commodity and shipping prices to domestic processed food, food-related services, and energy price inflation, as well as a recovery in domestic demand. 
• The BOJ has already increased its policy rate to 4.50% as of March 29. It is expected that it will apply an additional rate increase at its next policy decision meeting on May 29^th. This decision will likely be driven by the sustained expectations for future breaches of the target, expectations around aggressive Fed Fund rate hikes, and the still-elevated inflation expectations for the 12 months ahead, which rose to 9.1% in the December Survey from 8.9% in the prior survey.

(Source: Statin and NCBCM Research

• Fitch expects that rising borrowing costs, slowing economic growth and political uncertainty will limit the growth of Brazil’s banking sector. In 2021, Brazilian banks saw robust loan growth, climbing to 18.6% y-o-y and a record 71.4% of GDP at the end of the year.  
• This continued the trend from 2020, as loan growth was fueled by fiscal stimulus in response to the Covid-19 pandemic and loose monetary policy through H1 2022, which supported lending to firms and households to cover income losses. Additionally, total assets posted 9.2% growth, while deposits expanded by 9.5%. 
• That being said, inflation is expected to average 10.1% by the end of the year, and interest rate hikes are expected. Owing to this, loan growth in Brazil’s banking sector is anticipated to decelerate in 2022, held back by higher interest rates, a weak economic outlook, and political uncertainty ahead of the October 2022 election. Against this, Fitch forecasts loan growth will slow from 18.6% at the end of 2021 to 7.9% at end of 2022.

(Source: Fitch Solutions)