• In an attempt to stabilize prices, the Dominican Republic has suspended banana exports. Joel Santos Echavarría, Minister of the Presidency and president of the National Council for Food and Nutritional Sovereignty and Security (Conassan), said that the measure will be reviewed in 30 days.
• The decision, taken through Resolution 05-2023, establishes that the measure has been in effect from Monday, September 18, and will be reviewed in 30 days.
• The Dominican Republic is currently a major producer of bananas, especially organic. Its production is oriented for both the national and international markets.
• Notably, according to Ministry of Agriculture data, in 2016 the Dominican Republic became the world's leading exporter of organic bananas, which means that 63% of the total (approximately 17,000 hectares) dedicated to this crop has been certified as being free of pesticides or any other type of chemical.
• Since then, the price of bananas has plummeted by almost 35% of the Dominican Republic’s export price. The increase in freight, fertilizers and supplies such as boxes are among the increased cost factors. The aggravating circumstance is that the destination markets refuse to assume these cost increases.
• Furthermore, the gap between the price of organic and conventional bananas is getting closer every day, to the detriment of DR exporters, thereby resulting in lower earnings for banana exporters in the country.

(Source: Dominican Today)

• The Bank of England halted its long run of interest rate increases on Thursday as the British economy slowed, but it said it was not taking a recent fall in inflation for granted. A day after a surprise slowing in Britain's fast pace of price growth, the BoE's Monetary Policy Committee voted by a narrow margin of 5-4 to keep the Bank Rate at 5.25%.
• It was the first time since December 2021 that the BoE did not increase borrowing costs. "There are increasing signs of some impact of tighter monetary policy on the labour market and on momentum in the real economy more generally," the MPC said in a statement. It cut its forecast for economic growth in the July-September period to just 0.1% from August's forecast of 0.4% and noted clear signs of weakness in the housing market.
• Growth for the rest of the year was likely to be weaker than previous forecasts, the BoE said. Record growth in workers' pay, which has been a big concern for the central bank, was not backed up by other measures of the labour market, it noted, suggesting the BoE's policymakers expected it to slow down soon.
• "CPI inflation is expected to fall significantly further in the near term, reflecting lower annual energy inflation, despite the renewed upward pressure from oil prices," the BoE said. However, it said services inflation was expected to remain elevated. The BoE's decision to pause its rate hikes came a day after the U.S. Federal Reserve also opted to keep borrowing costs on hold. Last week, the European Central Bank raised rates but suggested it might be the last for now.

(Source: Reuters)

• Benchmark 10-year U.S. Treasury yields rose to 16-year highs on Thursday, a day after the Federal Reserve surprised investors by flagging the potential for an additional rate hike, and an expectation for fewer cuts next year.
• The U.S. central bank held interest rates steady, as was widely expected, and said that its benchmark overnight interest rate may still be lifted one more time this year to a peak 5.50%-5.75% range. It also now expects half a percentage point of rate cuts in 2024. As of June, Fed officials had expected to cut rates by a full percentage point next year.
• "It caught the markets by surprise because there was this sense that three months of encouraging inflation data would kind of bring down the temperature at the Fed," said Will Compernolle, macro strategist at FHN Financial in New York. "But, for a number of reasons, they still feel like they need to stay hawkish - they need to stay very ready to continue to be restrictive," Compernolle added.
• Fed chairman Jerome Powell on Wednesday said that a "solid" economy with still "strong" job growth will allow the central bank to keep that additional pressure on financial conditions through 2025 with much less of a cost to the economy and labour market than in previous U.S. inflation battles. He added that "we want to see convincing evidence really, that we have reached the appropriate level" of interest rates to return inflation to the Fed's 2% target.

(Source: Reuters)

• Fitch Solutions expects tourism growth in the Caribbean region to slow in 2024, after experiencing a solid two-and-a-half years of growth after the end of Covid lockdowns.
• Historically, tourism has been a major contributor to the GDP of Caribbean economies. As of 2021, Statista reported that travel and tourism brought in US$39.3Bn towards the Caribbean GDP, approximately 12.5% of the overall Caribbean GDP, with the largest tourism markets being the Dominican Republic, followed by Cuba, Puerto Rico, the Bahamas, Jamaica and Aruba.
• Some of the smallest island economies in the regions, such as those belonging to the Organisation of Eastern Caribbean States, are even more reliant on tourism, with travel and tourism contributing more than 40.0% of GDP in places like Antigua and Barbuda, St. Lucia, Anguilla, the British Virgin Islands, St. Kitts and Nevis and Grenada. 
• The expected recession in the United States which is expected to begin in Q224 will lower demand for Caribbean tourism, dragging down growth across the region. The strong reliance on tourism makes these markets exceptionally vulnerable to any shocks, as was demonstrated in 2020-21.
• This in turn will drive down growth across the region, as US tourism is a major driver of growth in most markets. There is likely to be a region-wide slowdown from 2.2% in 2023 to 1.7% in 2024. 
• Beyond 2024, given the anticipation for the US recession to be short and relatively mild, Fitch expects a rebound driven in part by the tourism recovery; and sees regional growth at approximately 2.4% (2023-2028).

(Source: Fitch Solutions)

• Colombian Finance Minister Ricardo Bonilla, who is also a director of the country's central bank, said on Wednesday he will ask the board to start cutting the benchmark interest rate at the board's meeting next week, citing a slowdown of inflation.
• Colombia's monetary policy authority has held the rate steady at 13.25% since June when it ended an upward cycle during which the board hiked its benchmark rate by 1,150 basis points in a bid to curb rampant inflation.
• "I'm going to insist the central bank start sending the message it's lowering rates from September, even if it's a very small reduction, but that the message starts being sent," Bonilla, one of the central bank board's seven directors, told reporters.
• "What we really need is to show that the trend of reducing inflation is what's important, not the size by which it's falling," he said, adding that Colombia's inflation will close the year at 9.2%.
• Most analysts expect the bank will hold the rate steady at its meeting on Sept. 29 because inflation is decreasing at a slower-than-expected rate.
• Colombia's 12-month inflation through Aug. 31 stood at 11.43%, almost four times the bank's 3% target.

(Source: Reuters)

• The U.S. Federal Reserve held interest rates steady on Wednesday but stiffened its hawkish stance, with another rate increase projected by the end of the year and monetary policy kept significantly tighter through 2024 than previously expected.
• As they did in June, Fed policymakers at the median still see the central bank's benchmark overnight interest rate peaking this year in the 5.50%-5.75% range, just a quarter of a percentage point above the current range which signals one more 25bps rate hike to take place at the November Fed policy meeting.
• The Fed's updated quarterly projections show rates falling by only half a percentage point in 2024 compared to the full percentage point of cuts anticipated at the meeting in June. With the federal funds rate falling to 5.1% by the end of 2024 and 3.9% by the end of 2025, the central bank's main measure of inflation is projected to drop to 3.3% by the end of this year, to 2.5% next year and to 2.2% by the end of 2025. The Fed expects to get inflation back to its 2% target in 2026, which is later than some officials had thought possible.
• "Inflation remains elevated," the rate-setting Federal Open Market Committee (FOMC) said in a policy statement that included projections incorporating stronger economic and job growth than prior forecasts and keeping prospects for a "soft landing" squarely in view.

(Source: Reuters)

• The Bank of Canada wanted to send the message that interest rates would not be coming down soon when it left them at a 22-year high after a policy meeting earlier this month, minutes published on Wednesday showed. The Bank of Canada (BoC) kept its key rate at 5% on Sept 6, noting the economy had entered a period of weaker growth, but said it could hike again should price pressures persist.
• A day later, Governor Tiff Macklem said interest rates may not be high enough to bring inflation back down to its 2% target even after 10 hikes of a total of 475 basis points since March of last year. The hawkish tone struck by the BoC since the latest rate decision was intentional, according to the minutes, or summary of deliberations, of the six Governing Council members.
• They "considered the possibility that their decision could be misinterpreted as a sign that policy tightening had ended and that lower interest rates would follow," the summary read. It continued: "They agreed that they did not want to raise expectations of a near-term reduction in interest rates, given that they only considered keeping the policy rate where it is or raising it further."
• The BoC emphasizes that core, or underlying inflation, has been sticky. Deputy Governor Sharon Kozicki said on Tuesday it was above a level consistent with achieving the 2% target. Also on Tuesday, official data showed headline inflation jumped to 4.0% in August from 3.3% in July and two of three of the BoC's core inflation measures also gained.
• After the August inflation data were released, money markets raised bets for a rate hike after the next policy meeting on Oct. 25. On Wednesday the markets saw a 43% chance of an increase, compared with 23% before the figures came out on Tuesday.

(Source: Reuters)

• Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, says that upgrading Jamaica’s credit rating by Standard and Poor’s will facilitate access to financing on better terms.
• Standard and Poor’s (S&P) Global Ratings, on September 13, upgraded the Government of Jamaica’s Long-Term Foreign and Local Currency Issuer Default Rating (IDR) from B+ to BB-, with a ‘Stable’ outlook. It is the best global grading Jamaica has received from S&P since the entity started rating the country’s sovereign debt in 1999.
• The Minister was speaking during the opening ceremony for the Jamaica Institution of Engineers’ observance of Engineers’ Week, at The Summit in New Kingston on Monday (September 18).
• Minister Clarke highlighted the country has the opportunity to access financing at costs lower than before. This is because a higher credit rating means that a country is more creditworthy, which ultimately means that an investor will require lower interest terms to lend.
• Additionally, if less is paid for the money you need for financing, it expands fiscal capacity, so more can be spent on health, infrastructure and security.
• The Finance Minister also noted that the higher the credit rating, the more favourable the investment climate is deemed to be. This is because investments are less risky. The rating is linked to the riskiness or the perceived riskiness of an economy. The higher the credit rating is the more open the economy will be to foreign investment. More foreign investment means more economic activity and more economic activity means more jobs for Jamaicans. As a result, the higher credit rating provides an environment that supports the creation of more jobs for the Jamaican people and an accompanying better investment climate.

(Source: JIS News)

• Jamaican Teas Group of Companies announced that effective September 25, 2023, Alston Marketing Company Limited (AMCO) will be the exclusive distributor for the Jamaican Teas Limited-owned brand- Caribbean Dream and Tetley which is manufactured under license.
• AMCO is a wholly owned subsidiary of the Ansa McAL Group of Companies, one of the largest conglomerates in the region with more than US$1Bn in revenues.
• Ansa McAL comprises over 27 subsidiary companies, operating in multiple territories including Jamaica and is a listed company on the Trinidad and Tobago Stock Exchange.
• This new distribution deal is expected to expand its product reach and bolster the company’s revenues, when combined with the cost savings from the consolidation of its two plants announced earlier, will ultimately increase the bottom line and shareholders’ value.

(Source: JSE)

• Guyana’s offshore blocks have attracted interest from six bidders, and while the government is content with the offers for eight of its 14 oil discoveries, the State is open to partnering with other bilateral allies.
• This was revealed by President, Dr. Irfaan Ali, who, during a discussion at the Inter-American Dialogue in Washington DC, said India, Qatar and the Dominican Republic have signalled their interest in exploring and developing offshore oil blocks.
• “India would have expressed a willingness to work from government to government, Qatar had expressed a willingness to work government to government. The Dominican Republic and several other countries expressed that interest too,” the Guyanese Head of State said while responding to questions at the event.
• On Tuesday, September 12, the country closed its first oil block auction. Six companies including ExxonMobil, which already has the giant Stabroek Block and other companies like SISPRO INC (Guyana), headed by Guyanese businesswomen; Total Energies EP Guyana BV; Liberty Petroleum Corporation of the US and Ghana-based Cybele Energy Limited submitted bids.
• Given the current climate of the market, Mr Ali stated that he is pleased with the number of bids the country has received. He noted that while the country is open to government-to-government partnerships in the sector, the process needed to be done openly and transparently first.
• Guyana’s economy has undergone a radical transformation, from producing no crude at all to now producing an average of some 400,000 barrels of oil per day. The economy continues to grow very rapidly, supported by the government's modernization plans, including the unparalleled oil sector expansion. After growing by 62.3% in 2022, it is anticipated to grow by 38% in 2023 and oil production is expected to increase to 600,000 barrels per day by 2024.

(Sources: CariCris & International Monetary Fund)