• Worried over this increasingly dark outlook, and what ECB President Christine Lagarde described as "uncertainty ... in abundance", a handful of policymakers even pushed for a bigger half-percentage-point rate cut to buffer the euro zone economy. However, they settled unanimously on 25 basis points, Lagarde said, taking the ECB's deposit rate, the benchmark for borrowing costs across the 20-nation currency bloc, to 3%.
• The central bank also removed an earlier reference in its guidance to keep interest rates sufficiently restrictive, which economists took as a sign that further policy easing is coming - perhaps as soon as January, as inflation is seen settling at the ECB's 2% target in early 2025. Lagarde also warned that domestic inflation remained uncomfortably high, and that victory over excessive price growth was not yet complete.
• Investors even see a 30.0% probability that the January cut will be 50 basis points, or that the rate-cutting streak will last beyond June, taking the deposit rate to 1.75% by end-2025. The changed guidance is also a clear hint that rates could fall at least to the so-called neutral level - hard to define but probably between 2% and 2.5% - which neither stimulates nor slows growth.
• Even if Lagarde was vague about further rate cuts, she went out of her way to emphasize downside risks to growth, including from prospective trade tensions with the United States under incoming U.S. President Donald Trump. These fears fed at least partly into the ECB's economic projections, which predicted even slower growth than already expected and recovery both shallow and delayed.
• Policymakers backing a 50-basis point move argued that economic growth could fall below 1% next year if punitive tariffs are imposed as Trump has threatened. With Germany facing an early election and France struggling to find a stable government, downside risks prevail.

(Source: Reuters)

• Dolla Financial Services Limited (DOLLA) has successfully closed its $1.9Bn 12% Secured Corporate Notes, with Mayberry Investments Limited serving as the lead arranger and broker.
• This marks a significant milestone for the company, reflecting the confidence of the investment community in Dolla’s vision and growth potential. Initially targeted at $1Bn, the offer was upsized to $1.9Bn in response to strong demand.
• The Notes carry a tenure of four years, maturing on September 30, 2028, and the net proceeds from this issuance will be utilised to strategically expand the Company’s loan portfolio.
• This follows the company raising J$500Mn through an Initial Public Offer (IPO), was after which it listed on the Junior market of the JSE on June 14, 2022. The IPO was oversubscribed by approximately 950%, indicating strong investor interest in the company. 
• Dolla's stock price has increased by 11.4% since the start of the calendar year. The stock closed Wednesday’s trading session at $3.02 and trades at a P/B of 7.1x, above the Junior Market Financial Sector Average of 2.6x.

(Sources: JSE & NCBCM Research)

• Jamaica’s small farmers have, so far, generated sales totalling nearly $400Mn via the Agri-Linkages Exchange (ALEX) platform in 2024. This was disclosed by Tourism Minister, Hon. Edmund Bartlett, who noted that this out-turn resulted from trading between the farmers and hotels, describing this as being “very significant”.
• Noting that close to $1Bn was generated via the ALEX platform last year, Mr. Bartlett expressed optimism about continued growth, despite setbacks in relation to visitor arrivals due to Hurricane Beryl and other disruptions in the sector in 2024.
• “We expect that the year will end with excess of over $500Mn of trading between these small farmers,” he told JIS News.
• “So, the linkages that we’ve tried to develop between tourism, manufacturing, agriculture and the myriad of industries that operate within our space is something that we are getting more and more proud of, as a larger number of Jamaicans are becoming inserted in the tourism value chain,” Minister Bartlett added.

• The ALEX platform is a collaborative initiative between the Tourism Enhancement Fund (TEF) and the Rural Agricultural Development Authority (RADA) that has revolutionised the interaction between hoteliers and farmers.

(Source: JIS)

• The President of Panama, José Raúl Mulino, made official this Wednesday, December 11, a $500Mn financing program with the international banks Citi and BBVA, aimed at promoting the country’s economic reactivation plan, which will be managed through the state-owned Caja de Ahorros (CA).
• The program includes a financial contribution of $250 million from Citi and another $250 million from BBVA.
• “The money for the Panamanian people will not come from subsidies or royalties from the State, but from economic reactivation through the private sector, which will result in fresh money to boost the economy” the president said.
• This financing is projected to support various productive sectors, with an emphasis on small and medium-sized enterprises (SMEs), seeking to promote economic development and job creation throughout the country.

(Source: Panama Newsroom)

• Brazil's central bank raised interest rates by 100 basis points on Wednesday and signaled same-size hikes for the next two meetings as it navigates increasing inflation challenges alongside fiscal woes.
• The bank's rate-setting committee, known as Copom, unanimously increased the benchmark Selic rate to 12.25%, highlighting the negative impacts of a recent fiscal announcement by the government on asset prices, inflation expectations, and the exchange rate.
• "The committee judges that these impacts contribute to a more adverse inflation dynamics," said policymakers in the decision statement, the last under Governor Roberto Campos Neto's leadership at the central bank.
• This comes after the release of a highly anticipated spending cut package by President Luiz Inácio Lula da Silva's administration, which failed to meet expectations and has weakened confidence in the government's ability to control the growing public debt.
• Bottom of Form

(Source: Reuters)

• The Bank of Canada slashed its key policy rate by 50 basis points to 3.25% on Wednesday and indicated that further cuts would be more gradual, a shift from previous messaging that continuous easing was needed to support growth.
• The 50-basis-point cut, while widely expected, marks the first time since the pandemic that the central bank has implemented consecutive jumbo-sized cuts. In a Reuters poll of economists, 80%, or 21 out of 27 respondents, predicted that the bank would cut the overnight rate by 50 basis points. The rest forecast a quarter-point reduction.
• The policy rate is now at the top end of the bank's so-called neutral range, which is considered to be the band within which rates are just enough not to restrict growth but not stimulate it either.
• Canada's economy grew at an annualised rate of just 1% in the third quarter, less than the Bank of Canada had predicted. The Bank said fourth-quarter growth might be weaker than expected, and that planned reductions in immigration levels could cause 2025 growth to also fall short of forecasts.
• With Wednesday's reduction, the bank has now shrunk benchmark borrowing costs five times in a row by 175 basis points in a space of six months, making it the only major central bank to have reduced borrowing costs at such a rapid pace.

(Sources: Reuters)

• U.S. consumer prices increased by the most in seven months in November, but that is unlikely to discourage the Federal Reserve from delivering a third consecutive interest rate cut next week, against the backdrop of a cooling labour market and rental costs.
• Most of the rise in inflation reported by the Labour Department on Wednesday came from higher food prices as well as more expensive motel and hotel rooms. Rents, which have been the major driver of inflation, increased at the slowest pace since July 2021. That bodes well for the inflation outlook.
• In the 12 months through November, the CPI climbed 2.7% after increasing 2.6% in October. The rise in the CPI was in line with economists' expectations. The annual increase in inflation has slowed considerably from a peak of 9.1% in June 2022. Nonetheless, progress in lowering inflation to the U.S. central bank's 2% target has virtually stalled in recent months.
• The Fed, however, is now more focused on the labour market. Though job growth accelerated in November after being severely restricted by strikes and hurricanes in October, the unemployment rate ticked up to 4.2% after holding at 4.1% for two consecutive months. Excluding the volatile food and energy components, the CPI increased 0.3% in November, rising by the same margin for the fourth consecutive month.
• Despite the lack of progress in the inflation fight, investors took comfort from the moderation in the cost of rent and the fact that the core inflation had not deteriorated.

(Source: Reuters)

• The 2024/25 winter tourist season, which begins on December 15, promises to be “very good” for Jamaica, according to Tourism Minister, Hon. Edmund Bartlett. “We have improved bookings and airlift. In fact, out of the United States, we have 70,000 more seats than we did last year,” he told JIS News.
• The Minister further informed that 45,000 additional seats will come out of South America. He pointed out that with direct flights now available from Lima, Peru, to Sangster International Airport in Montego Bay via LATAM Airlines, a strong response is expected from the South American market.
• “That flight connects to about five countries in South America. So we are very comfortable with the expansion of the South American market,” he added.
• Meanwhile, Mr. Bartlett said Jamaica continues to be a destination of choice for other markets. “The European market is performing and certainly the United Kingdom (UK). Jamaica is the number-one Caribbean destination for tourism out of the UK now; we clipped Barbados and we’re moving ahead strongly there,” he indicated, adding that Canada has also shown very strong bookings for the season.
• This augurs well for Jamaica's tourism sector, building on the record-breaking year of 2023 to meet its goal of earning US$5 billion from five million tourist arrivals within a targeted five-year period ending in 2025.
• However, the sector has faced challenges this year due to Hurricane Beryl in July and a Level 3 travel advisory from the U.S. in January 2024.  The advisory was revised in July to soften its language on crime, boosting optimism for better performance for the rest of the season.

(Sources: JIS & NCBCM Research)

• Jamaica’s Net International Reserves (NIR) stood at US$5,408.51Mn at the end of November 2024, 3.3% lower than October 2024, according to the Bank of Jamaica (BOJ). The decline in the NIR reflects a 3.3% (or US$187.94Mn) decrease in total foreign assets, which outweighed the 1.3% decline (or US$0.90Mn) in Foreign Liabilities.
• The dip in foreign assets reflects a fall in Currency and Deposits to US$3,431.58Mn from US$3,660.67Mn, Special Drawings Rights (-92.7% or $18.31Mn) and IMF Reserve Position (-1.3% or $484.45K). However, this was tempered by a 3.1% (or US$59.95Mn) increase in Securities.
• The lower NIR came against the backdrop of three interventions by the BOJ in the foreign exchange market during the month totaling US$130Mn. This represented a slight increase from October, when there were four interventions totalling US$120Mn.
• Despite the month over month decline, the NIR is X% above the November 2023 level. Furthermore, the current level of NIR equates to 28.5 weeks of goods & services imports (29.5 weeks at the end of October 2024). At this level, the NIR is more than double the international benchmark of 12 weeks of imports.

(Source: BOJ)

• As 2024 draws to a close, Guyana has emerged as the standout performer in Latin America and the Caribbean, with exports set to increase by an astounding 77%, largely driven by the country’s oil and gas, and agriculture sectors according to the latest ‘International Trade Outlook for Latin America and the Caribbean, 2024’ report from latest Economic Commission for Latin America and the Caribbean (ECLAC).
• The December report highlighted that following a contraction of 1.2% in global goods trade in 2023, the world economy is tentatively rebounding in 2024, with global goods trade growing by 1%. Latin America, however, presents a brighter picture, with regional goods exports projected to rise by 4% in value this year. Among the regional leaders, Guyana stands out, driven by a substantial increase in the volume of its oil exports and key agricultural products like soybeans.
• Guyana's exceptional performance places it ahead of other nations. Suriname, for example, is expected to see a more modest export growth of 12%. Larger economies like Brazil and Mexico are forecast to experience more restrained growth, with exports increasing by just 3% and 2%, respectively.
• Latin America and the Caribbean are set to move from a US$26 billion trade deficit in 2023 to a US$36 billion surplus in 2024, driven by strong export performance in countries like Guyana and Argentina. Guyana’s exceptional export growth is helping to boost the overall Caribbean trade performance, with export volumes in the subregion set to expand by 24%.
• Despite the positive export trends, the region’s economic growth remains sluggish with a projected GDP growth of just 1.8% for 2024. Latin America continues to experience weak demand for imports, with regional imports expected to increase by only 2%. Nonetheless, the region’s trade balance has been improving.
• The value of goods exports from Latin America and the Caribbean is expected to grow by 4%, driven by a 5% increase in export volumes, despite a 1% decline in prices. Agricultural exports will lead this growth with an 11% increase, followed by a 5% rise in mining and oil exports and a 3% uptick in manufactured goods.

(Source: Guyana Chronicles)