Macroeconomics round up: Chinese yuan, Brazil's credit rating and Greece celebrates
Jason Walls breaks down the week's biggest news in macroeconomics on NBR Radio, and on demand on MyNBR Radio.
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Join Jason Walls as he breaks down the week's biggest news in macroeconomics on NBR Radio, and on demand on MyNBR Radio.
In a shock move this week, China devalued its currency, forcing it to the lowest level in almost three years.
It was the biggest one-day fall since the massive devaluation in 1994, says NBR reporter Jason Walls.
“This came after a recent string of soft data, such as much lower than expected import and export figures.”
He says many analysts were expecting more stimulus in terms of a further interest rate cuts.
Mr Walls says the People’s Bank of China devalued the yuan by adding more supply of the currency into the market, which in turn drove down the price.
“This means Chinese products will become cheaper in other countries, while goods imported into China will become dearer,” he says.
Also this week, Brazil’s credit rating was downgraded from a Baa2, to a Baa3, by Moody's. This is seen as near junk status.
Mr Walls says weaker than expected economic performance, an upward trend in government spending and a lack of government reform have combined to leave Brazil’s debt situation to “deteriorate materially.”
The rating’s agency’s decision came just days after competing ratings firm Standard & Poor's warned Brazil could lose its investment grade in the coming year if fallout from a number of corruption investigations further weigh on economic growth.
On the other side of the world, Greece finally has something to celebrate after reaching a bailout deal with its creditors to the tune of €85 billion.
Greek stocks rallied after the news, with the banking index climbing 3% upon the news.
To build your own NBR Radio playlist and enjoy instant on-demand access to any audio, sign up for our FREE smartphone-only subscription to NBR ONLINE.
NBR Radio
Fri, 14 Aug 2015
Fri, 14 Aug 2015
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Macroeconomics round up: Chinese yuan, Brazil's credit rating and Greece celebrates
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