At the beginning of the new year, the currency decline of these five countries is difficult to stop!
Since the beginning of the new year, the currencies of several emerging market countries, such as Turkey, the Philippines, Lebanon and Nigeria, have fallen all the way, seriously undermining market confidence. For foreign trade enterprises exporting to these countries, please pay attention to the collection risk!
The Turkish Lira continued to fall and the inflation rate hit a 19 year high
Since 2021, the Turkish Lira has continuously depreciated against the US dollar, reaching record lows. After entering 2022, the situation did not seem to improve. On January 6, the Turkish Lira fell 1% against the US dollar to below 13.80.
According to the official data released on Monday, Turkey's annual inflation rate rose at the fastest rate in 19 years, reaching 36.08% in December 2021. The Turkish Bureau of Statistics said that the consumer price index rose 13.58% month on month in December, which further weakened people's purchasing power. Data show that the annual increase in food prices reached 43.8%.
The report points out that Turkey's annual inflation rate has reached a new high since September 2002. Referring to the inflation rate released on Monday, Turkish President Recep Tayyip Erdogan said: "for whatever reason, we regret that citizens are facing such a situation. We are determined to break the bottleneck of inflation and restore the inflation rate to single digits as soon as possible."
Reported that under Erdogan's pressure, the Turkish central bank cut key interest rates last September. Since then, the inflation rate in Turkey has been rising, and the Turkish Lira has fallen to a new low. The report also said that the devaluation of the lira made imported goods, fuel and daily necessities more expensive, and many of Turkey's 84 million people could not afford food and other necessities of life. Many people have been buying foreign currency and gold to protect their savings.
An independent inflation research group composed of scholars and former government officials believes that the inflation rate in 2021 will reach 83%, much higher than the official data. The group said that consumer prices rose 19.35% in December 2021 compared with November.
The Philippine peso is the worst performing emerging Asian currency, and enterprises hope to recover in 2022
As the seasonal boost from remittances faded, the Philippine Peso changed from the best currency in December to the worst performing emerging Asian currency. Strategists believe that the decline will continue.
Recently, the Philippine Peso fell by about 2%, erasing all the gains in the first three weeks of December, which made the peso outstanding in the region. Nomura Holdings Inc. and Barclays PLC. Expect more losses in the peso in the coming months. The Philippine Peso faces dovish resistance from the central bank. The central bank kept the interest rate unchanged last month. Central bank governor diocano said that the Central Bank of the Philippines is ready to maintain a loose monetary policy position to support economic recovery, which is in sharp contrast to the interest rate hike set by the Federal Reserve in 2022. It may also face pressure from a growing current account deficit.
According to the Philippine Star, since 2021, large Philippine commercial groups and listed companies have been continuously impacted by the epidemic, and many commercial giants have to accept the new normal of struggling to survive for another year; Economic activities such as retail, consumer spending and mergers and acquisitions were generally weak.
However, many people in the industry still have hopes for economic recovery in 2022. Ayala group achieved a net income of 19.4 billion pesos in the first three quarters of last year, with a year-on-year increase of 70%, and most of its business operations have improved. Fernando zobel de Ayala, President and CEO of Ayala, said that the continuously improved business environment reflects the adjustment of institutions to adapt to the new normal of the epidemic in more than a year. He said that with the continuous improvement of vaccination rate, he expected the Philippine economy to further open up and continue its good momentum.
Lance gokongwei, President and CEO of JG summit holdings, said he was optimistic about the prospects and expected to recover in 2022 and return to the pre epidemic level in 2023. Ty group expressed confidence that the Philippine economy will return to 6% growth rate, not only because of the election season, but also because the global economy is generally good.