• Country Risk1 300Kazakhstan – headed for the next devaluation?
  • Paraguay – credit rating upgraded;
  • Sweden – an unprecedented credit and monetary stimulus;
  • Venezuela – yet another “new” FX market.

DENMARK: The Kingdom is still battling forces trying to separate the krone from the euro, and for now it should be able to hold the line. The interesting thing is that if the crown were cut loose to float, it would more likely sink than climb. Still, though Denmark is an oil and gas producer, the plunge in global petroleum prices is expected to be more boon than bane.

HUNGARY: The forint has been less affected by the Swiss CB’s decision to remove the cap on the franc’s exchange rate, although part of this story is a cautionary tale. PM Orban and his Fidesz party, having seen their popularity continuing to slip, have started to make a U-turn in foreign policy, but not on the home front.

INDIA:  At his home state’s “Vibrant Gujarat” celebrations, PM Modi promised a new drive to revive his flagging economic reform agenda, and the CB helped brighten the mood with an interest rate cut. The political environment for accelerated change was set back, though, with the state elections in New Delhi, in which the upstart Aam Aadmi party made sweeping gains.

KENYA: The economy remains robust, the external accounts being supported by a just-approved package of IMF accommodations. The authorities need to get Islamist terrorism under control, though, to fulfill plans for turning the country into a transportation and tourist hub.

MALAYSIA: The plunge in oil prices is forcing the government to cut spending and support for the ringgit has brought foreign exchange reserves down to their lowest level since March 2011, but the country can cope and the economy should be growing fairly robustly.

THAILAND: Having made minimal headway in 2014, the economy is expected to gather some momentum in the current year, but there are risks. Political uncertainties play a role, as the ruling junta shows no urgency in surrendering power and is trying to bury the opposition in lawsuits.

TURKEY: The plunge in global oil prices has come at a fortunate time for Turkey, but whether it will suffice to keep a run on the lira at bay is not entirely certain yet. There is some risk that relatively strong economic trends are overpowered by the ambitions of Pres. Erdogan, as his autocratic tendencies are making themselves felt more & more.

VENEZUELA: As economic conditions go from bad to worse the Maduro regime keeps tightening its grip, but the limits of what it can do are becoming increasingly apparent. This being an election year it is likely to keep channeling what resource it has left to the people, in which case a foreign debt default will become an increasing risk.

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