• Brazil – yet another interest rate hike;
  • Ecuador – deeper in debt to China;
  • Kazakhstan – a new exchange rate peg for the tenge;
  • Mongolia — backtracking from resource nationalism.

HAITI:  The economy should continue to grow at a moderate pace, with inflation remaining in the mid-single digits. The BoP has weakened somewhat and gross FX reserves have fallen slightly, but they will keep providing a reasonably comfortable cushion. Yet, Haiti is still a country in which nearly everything needs help and poverty remains pervasive.

HONG KONG: The easy-money rally is coming to an end. As this will affect the supply and cost of credit to the economy it will not be without impact on growth. So long as the HKD stays pegged to the USD, however, the authorities do not have many options for counteracting the trend.

INDIA:  The rupee rebounded today in response to the CB’s use of currency swaps for oil companies, but the currency is likely to resume its downtrend. From a longer-term perspective, while the rupee’s slump will cause a shock to the already troubled economy, this does not have to be disastrous if the government focuses on structural solutions.

INDONESIA:  A currency melt-down akin to that of 1997-1998 is still unlikely and it remains true that Pres. Yudhoyono next year will bequeath to his successor a country in much better shape than he found it, but Indonesia has been harder hit than many other emerging markets by a sell-off of stocks, securities and the currency.

LATVIA: The nation will become the 18th member of the Eurozone next January 1, but there are still doubts about the move focused on Latvia’s role as a haven for Russian flight money and the special welcome mat the country has laid out for deep-pocketed investors from outside the EU.

MYANMAR: The country is now rapidly emerging from its long period of isolation and the short-term economic outlook is not bad. Longer-term, almost everything will depend on how quickly and effectively institutional problems are addressed. For now, foreign investors show considerable interest but remain hesitant to move.

PHILIPPINES: The peso and stocks are still showing considerable vulnerability, but with inflation remaining well within the official target range and the government coming under growing pressure to do more to create jobs the CB sees no reason to fiddle with interest rates. The US has been stepping up its military assistance.

THAILAND:  The Thai baht and the local stock and bond markets are likely to remain under pressure as the economy has entered a recession that is making it hard for the authorities to raise interest rates. Prospects are bright neither for exports, nor for domestic demand, nor for public infrastructure spending, which could take up some slack.

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