• Between 2020 and 2024, the number of municipalities in the Dominican Republic classified as “banking deserts”, areas without branches, ATMs, or bank subagents, decreased from eleven to just one, according to the Banking Deserts study published by the Superintendency of Banks (SB).
• The study highlights that the expansion of banking access points (PAB) in 2023 aligns with a nine-year trend, reducing banking deserts from 20 in 2015 to two by the end of 2023. According to the report, Los Cacaos in San Cristóbal is now the only area in the country where residents must travel to another district to access banking services.
• In 2023, in addition to Los Cacaos, the Cristóbal municipality in the Independencia province was also a banking desert. However, in the first quarter of 2024, Banco del Reserva opened the first PAB in Cristóbal, eliminating its status as a banking desert.
• From 2015 to 2023, the estimated population without access to PAB decreased dramatically from 128,906 to just 12,789 people, representing a 90% reduction. By the end of 2023, ATMs were the most prevalent banking access point nationwide, with 3,528 ATMs (48.4% of the total), followed by 2,070 bank subagents (28.4%), and 1,692 branches (23.2%), amounting to a total of 7,290 PAB.

 (Source: Dominican Today)

• The president of this decade's summit for Small Island Developing States on Monday blasted "empty" and "grossly inadequate" climate pledges, saying wealthy nations have failed to meet obligations to limit damages from carbon emissions.
• Small island states across the Pacific, Atlantic, and the Caribbean, with negligible emissions, are particularly vulnerable to economic crises and rising temperatures due to their exposure to natural disasters, high debt, and reliance on imports and tourism.
• "It is not sufficient for nations to simply make empty and grossly inadequate commitments under the Paris Agreement," conference president and Antigua and Barbuda Prime Minister Gaston Browne said, citing a 2015 treaty to limit emissions and prevent temperatures rising more than 1.5 degrees Celsius above pre-industrial levels.
• Browne called for more climate financing, a global carbon tax on oil companies, an end to fossil fuel subsidies and a faster transition to renewable energy sources. He urged rich nations to honour a pledge to send $100 billion a year to poorer countries to help reduce emissions and mitigate extreme weather.
• A Reuters investigation found that billions in funds sent so far have been funnelled back to rich nations. Loss and damage, announced at last year's COP28 (28th annual United Nations (UN) climate meeting) summit after long-standing calls by island states was intended to help poor countries recover from climate disasters, but funding from wealthy nations has been paltry.

(Source: Reuters)

• U.S. trading on Tuesday moved to a shorter settlement cycle for securities transactions, putting investors and regulators on alert for increased trade failures and other hiccups in the world's largest financial market.
• Investors in U.S. equities, corporate and municipal bonds, and other securities must settle their transactions one business day after the trade, instead of two, to comply with a rule change adopted last February by the U.S. Securities and Exchange Commission.
• Regulators hope faster settlement will reduce risk and improve efficiency. They sought the new standard, commonly called T+1, after the 2021 trading frenzy around the "meme stock" GameStop highlighted the need to reduce counterparty risk and improve capital efficiency and liquidity in securities transactions.
• However, T+1 comes with risk since firms have less time to line up dollars to buy stocks, recall shares out on loan, or fix transaction errors, which could heighten the risk of settlement failures and raise transaction costs.
• A big test for the market occurs on Wednesday, when trades executed last Friday, when T+2 was still in place, and on Tuesday, the first day of T+1, will be settled. This is expected to lead to a rise in volume. "There will be some growing pains and a few hiccups," said Joe Saluzzi, co-head of equity trading at Themis Trading.
• Still, some market participants are concerned the change could transfer risks to other parts of the capital markets such as trade-related foreign exchanges to fund transactions and securities lending.

(Source: Reuters)

• China's economy is set to grow 5% this year, after a "strong" first quarter, the International Monetary Fund (IMF) said on Wednesday, upgrading its earlier forecast of 4.6% expansion though it expects slower growth in the years ahead.
• The global lender's new projections come as Beijing steps up efforts to shore up an uneven recovery in the world's second-biggest economy, which has stumbled in the face of a protracted property crisis and its ripple effects across investors, consumers and businesses.
• The IMF stated it revised up both its 2024 and 2025 GDP targets by 0.4% but warned that growth in China would slow to 3.3% by 2029 due to an ageing population and slower expansion in productivity. It now expects China's economy to grow 5% in 2024 and to slow to 4.5% in 2025.
• The IMF's upgrade for 2024 is in line with Beijing's growth target of "around" 5%, which the economy appears to be on track to reach after it blew past expectations to post growth of 5.3% in the first quarter. But deflationary pressures continue to loom large, and a protracted property crisis remains a major drag on growth.
• The property sector crisis remains the biggest stumbling block to a full-blown economic revival, analysts say, and the IMF issued a warning about the risks ahead. "Risks to the outlook are tilted to the downside, including from a greater or longer-than-expected property sector readjustment and increasing fragmentation pressures," Gopinath said.

(Source: Reuters)

• The Government of Jamaica (GOJ) remains committed to the growth and development of the micro, small, and medium-sized enterprise (MSME) sector, which continues to play a pivotal role in the country’s economy, says the Minister with responsibility for Information, Skills, and Digital Transformation, Senator Dr. the Hon. Dana Morris Dixon.
• With more than 422,000 MSMEs in operation, it was highlighted that these enterprises are undoubtedly the backbone of Jamaica's economy. They employ 60% to 70% of the workforce and account for over 90% of private-sector employment. "Your businesses are the ones building our nation. Your businesses have the power to propel Jamaica forward," she stated. 
• Morris Dixon addressed the graduation ceremony for 350 operators in the MSME sector who took part in the Wisynco/Coca-Cola Foundation 'Growing Together' initiative. This event occurred at The Ruins, University of the West Indies (UWI) Mona, on May 25.
• Owners of corner shops, wholesale outlets, groceries, and supermarkets operating within Wisynco’s network have benefited from a complimentary online business management course. Topics covered included inclusion and personal growth, managing your business, digitalisation of the business, electronic payments, WhatsApp business, inventory and financial health.
• "This is certainly a bold and visionary advancement for our community and economy. It demonstrates the Wisynco Group's dedication to its partners and the MSME sector. The graduates were not required to pay a fee or travel to distant classrooms; they could learn at their convenience. Hence, the Growing Together initiative is commendable and deserves praise," she stated

 (Source: JIS)

• The rainy season officially started for the Panama Canal on May 7, which has begun to be reflected little by little in the level of lakes Gatún and Alajuela. This is important news for the country. The serious drought, a product of the El Niño phenomenon, forced the interoceanic waterway to apply drastic measures, reducing the daily traffic of ships to only allow, at one time, the passage of 24 ships.
• The Panama Canal welcomed more ships per day in May, signalling a slow return to normalcy and a wider sigh of relief for shippers hoping for an end to transit restrictions that have been in place since last summer.
• According to the Panama Canal Authority (ACP), as many as 32 ships will be allowed to reserve a spot to sail through the waterway by June based on the present and projected level of the manmade Gatún Lake, which was heavily impacted by a months-long drought during Panama’s May-to-November rainy season last year.
• Clarksons Research said in an analysis earlier this month that total transits in the canal are still down by 30% compared to a year prior. Under normal circumstances, 36 to 38 vessels are allowed to be booked to transit the Panama Canal per day.
• With the country’s dry season coming to an end this month, the ACP has already been easing restrictions that were originally put in place throughout the second half of 2023, most recently increasing the number of daily reservations allowed from 24 to 27. With the completion of the maintenance, this number increased again to 31 per day across both the original Panamax locks (24 vessels) and the newer Neopanamax locks (seven vessels). Additionally, an extra slot will open in the Neopanamax locks starting June 1, with crossings expected to remain at 32 per day until further notice.
• Finally, to prevent a repeat of last year’s events, in March, Panama’s Council of Ministers unveiled the creation of a Multimodal Dry Canal project to speed up the movement of goods and improve clearance times. As part of the project, the country would integrate existing roads, railways, port facilities, airports, logistics warehouses and duty-free zones to create a new special customs jurisdiction to provide a dry route as an alternative to the roughly 50-mile waterway.
• Maersk (shipping and logistics company) debuted a similar “land bridge” service to kick off 2024, bypassing the canal on one of its trade routes amid the shipping delays posed by the transit restrictions. As part of the service, the company would split its Oceania-to-the-Americas route into two loops on each side of the canal, where cargo would be dropped off at a port before being transported to the other side via rail and picked up by a ship.

(Source: Newsroom Panama)

• Fitch Solutions expects Trinidad & Tobago’s (T&T) current account surplus to narrow from 12.0% of GDP in 2023 to 11.0% of GDP this year, largely reflecting increased import demand as the economy performs well.
• In recent years, T&T has benefitted from a notable rebound in global energy prices, linked to the emergence of supply concerns stemming from sanctions implemented on Russia (the world’s third-largest oil producer and second-largest natural gas producer) and ongoing unrest in the Middle East.
• This has acted as a windfall for T&T, given oil (20%) and natural gas (65%, including derived products such as ammonia and methanol) account for the bulk of goods exports. The run-up in prices has helped to more than offset weakness in production, following years of underinvestment.
• Risks to external stability are contained given the healthy current account position. However, restrictions on access to foreign exchange will likely continue to create issues for small businesses.

(Source: Fitch Solutions)

• The European Central Bank (ECB) has room to cut interest rates as inflation slows but must take its time in easing policy, even if the direction of travel is already clear, key policymakers said on Monday.
• The ECB has all but promised a rate cut for June 6, so the debate has shifted to subsequent moves and the speed at which they come. Markets have dialled back their expectations to bet on just one more cut this year.
• "Barring a surprise, the first rate cut in June is a done deal, but afterwards we have several degrees of freedom," French central bank chief Francois Villeroy de Galhau told Germany's Boersen Zeitung. ECB chief economist Philip Lane took a more measured stance but warned that easing too late risked pushing inflation below target, which would then force the ECB to rush with rate cuts.
• "Keeping rates overly restrictive for too long could push inflation below target over the medium term," Lane said in a speech in Dublin. "This would require corrective action through a subsequent acceleration in rate cuts that could even require having to descend to below-neutral levels."
• Markets currently see just one more rate cut this year after the initial move in June, a big reversal compared with the start of the year, when up to six cuts were expected. Still, Lane insisted that disinflation was on track and even if price growth figures could be choppy in the coming months, trends remained in line with the bank's projections that put inflation back at the ECB's 2% target in 2025.

 (Source: Reuters)

• New orders for key U.S. manufactured capital goods rebounded more than expected in April and shipments of those goods also increased, suggesting a moderate improvement in business spending on equipment early in the second quarter.
• Nonetheless, business investment in equipment continues to be hamstrung by higher borrowing costs. That, together with a strong dollar and weak global demand, is keeping manufacturing, which accounts for 10.4% of the economy, on the ropes.
• "Despite elevated borrowing costs and stricter loan standards, U.S. business investment could pick up in the second quarter," said Sal Guatieri, a senior economist at BMO Capital Markets. "However, the manufacturing sector, as a whole, is expected to remain in low gear until interest rates ease, the greenback weakens, and the global economy strengthens."
• Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, rose 0.3% last month after an upwardly revised 0.1% dip in March, the Commerce Department's Census Bureau said on Friday. Economists polled by Reuters had forecast these so-called capital goods orders would edge up 0.1% after declining by a previously reported 0.2% in March.
• The government last week revised the orders, shipments and inventory data from January 2012 through March 2024 after an annual review of the seasonal adjustment models, which it uses to strip seasonal fluctuations from the numbers. The revision did not affect the core capital goods orders that jumped 1.2% on a year-on-year basis in April.
• Shipments increased 0.4% after a 0.3% drop in March. Non-defense capital goods orders fell 1.5% in April after advancing 1.3% in the prior month. Shipments of these goods rose 2.4% after dropping 1.5% in March.
• These shipments go into the calculation of the business spending on equipment component in the gross domestic product report. They were partially flattered by higher prices, which could lessen the boost to GDP. Business spending on equipment rebounded marginally in the first quarter after two straight quarterly declines, making a small contribution to the economy's 1.6% growth pace.

(Source: Reuters)

• The Jamaica Stock Exchange (JSE) has been working closely with its stakeholders over the past six months to implement the T+1 settlement cycle, culminating in a final meeting with brokers and listed companies.
• The official announcement was made on May 20, 2024, regarding significant changes to its settlement cycle and trading hours, which will take effect on Monday, May 27, 2024. On that day, the settlement cycle for transactions will be shortened from trading plus two additional business days (T+2) to one business day after trading (T+1).
• Additionally, the stock market’s trading hours will be extended from 3 ½ to 5 hours. Trading will now commence at 9:00 a.m. and close at 2:00 p.m., giving traders an additional 1 ½ hours to trade securities.
• Marlene Street Forrest, Managing Director of the Jamaica Stock Exchange, noted that these are the measures the JSE and the Jamaica Central Securities Depository (JCSD) are taking to improve the market for the benefit of investors, reduce market risks, and enhance market activities and liquidity.
• Street Forrest further explained, “We are attentive to the needs of our investors, listed companies, brokers, and other stakeholders, and we respond to enhance our market’s advantages. We strive to align with global best practices and provide opportunities for growth.”
• Althea Daley of the JCSD, elaborated on the T+1 implementation, highlighting that the settlement cycle is required to finalise a trade and deliver funds and securities. In a T+1 settlement cycle, a trade becomes final on the next business day following the trade date, “T.
• Some of the benefits she added include; the harmonisation with major markets internationally and counterparties, for example, the USA and Canada, quicker receipt of cash/securities for investors, reduction of JCSD’s credit and settlement risk, operational process improvements, increased market liquidity and reduced foreign exchange risk in USD transactions.

 (Source: JSE)