Notice! The currencies of these countries have depreciated sharply, and the risk of payment and frei

Since the beginning of the new year, the currencies of several emerging market countries such as Turkey, the Philippines, Lebanon, and Nigeria have been falling all the way, which has severely damaged market confidence. Foreign trade companies exporting to these countries must pay attention to the risk of collection!

01
Turkish lira continues to fall, inflation hits 19-year high
Since 2021, the Turkish lira has continued to depreciate against the US dollar, hitting new lows repeatedly. After entering 2022, the situation does not seem to improve. On January 6, the Turkish lira fell 1% against the US dollar, falling below 13.80.

Turkey's annual inflation rate climbed at the fastest pace in 19 years, reaching 36.08 percent in December 2021, official data released Monday showed. The consumer price index rose 13.58 percent month-on-month in December, further weakening people's purchasing power, the Turkish Statistical Office said. Data show that food prices rose by 43.8% year-on-year.

The report pointed out that Turkey's annual inflation rate hit a new high since September 2002. Speaking of the inflation rate released on Monday, Turkish President Recep Tayyip Erdogan said: "For whatever reason, we regret that our citizens are facing such a situation. We are determined to break the bottleneck of inflation. , to bring inflation back to single digits as soon as possible.”

Under pressure from Erdogan, Turkey’s central bank cut its key interest rate in September last year, the report said. Since then, Turkey's inflation rate has continued to rise, and the Turkish lira has continuously fallen to record lows. The report also said that the depreciation of the lira has made imported goods, fuel and daily necessities more expensive, and many of Turkey's approximately 84 million people cannot afford food and other necessities. Many people have been buying foreign currency and gold to protect their savings.

The Independent Inflation Study Group, made up of academics and former government officials, sees inflation reaching 83% in 2021, much higher than the official figure. Consumer prices rose 19.35% in December 2021 from November, the panel said.
02
Philippine peso worst-performing emerging Asian currency, companies hope for recovery in 2022
The Philippine peso went from being the best currency in December to the worst-performing emerging Asian currency as the seasonal boost from remittances faded. Strategists believe the bearish momentum will continue.

The Philippine peso fell around 2% last week, erasing all of the gains made in the first three weeks of December that have made the peso an outperformance in the region. Nomura Holdings Inc. and Barclays Plc. expect more losses for the peso in the coming months. The Philippine peso faces dovish resistance from the central bank. The country's central bank left interest rates unchanged last month, with Governor Diokno saying the central bank is ready to maintain an accommodative monetary policy stance to support the economic recovery, in stark contrast to the Fed's 2022 rate hike. It could also face pressure from a growing current account deficit.

According to the "Philippine Star" report, since 2021, large business groups and listed companies in the Philippines have been hit by the epidemic, and many business 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 have generally Weak.

However, many in the industry still hold out hope for an economic recovery in 2022. Ayala Group achieved a net income of 19.4 billion pesos in the first three quarters of last year, 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 continuous improvement of the business environment reflects the adjustment of institutions to the new normal of the epidemic for more than a year. He said that as the vaccination rate continues to increase, he expects the Philippine economy to further open up and the positive momentum to continue.

Lance Gokongwei, president and CEO of JG Summit Holdings, said he is optimistic about the outlook and expects a recovery in 2022 and a return to pre-pandemic levels in 2023. Ty Group expressed confidence that the Philippine economy will return to a 6% growth rate, not only because of the election season, but also because the global economy is generally improving.
03
The black market exchange rate of the Lebanese pound to the US dollar fell below 30,000 to 1, a dro of more than 95%
According to Agence France-Presse, on the 4th local time, the black market exchange rate of the Lebanese local currency "Lebanese pound" against the US dollar fell below the integer mark of 30,000 to 1, hitting a new record low.

According to the black market exchange rate on the 4th, the monthly minimum wage of 675,000 Ligands determined by the Lebanese government is only about 22.5 US dollars. If converted into RMB, it is about 143 yuan. Lebanon has implemented a fixed exchange rate policy of pegging the Lebanese pound to the US dollar since 1997, and the official exchange rate has been maintained at about 1,500 to 1. However, since the financial crisis in 2019, the black market exchange rate of the Lebanese pound against the US dollar has continued to decline. In the past two years, due to multiple political and economic factors, the exchange rate of the Lebanese pound against the US dollar has fallen by more than 95%.
04
Nigerian naira falls to record low
The Nigerian currency fell to a record low in the spot market, Bloomberg reported. As at 2.46pm on December 31, 2021, the naira, managed by the Central Bank of Nepal, fell 2.2% to a record 424.27 against the US dollar. This was the largest drop in the official exchange rate since February 23, 2021. The Naira has been weakening every year since 2012. Since early October 2021, the Central Bank of Nigeria has been selling dollars to investors at 437 to 444 naira per dollar.

The Nigerian central bank has devalued the naira three times since March 2020 as lower oil revenues weighed on the country's foreign exchange reserves. Analysts said the spot rate of the naira in 2021 will continue to hover around the 411 level, which is about 12% overvalued. The International Monetary Fund and the World Bank have repeatedly called on Nepal's central bank to consolidate multiple exchange rates, but analysts believe it is unlikely that the central bank will do so in the year before the election, which is a huge political risk.
05
Sri Lanka's foreign exchange drying up closes several embassies abroad
According to the African Business Website, Sri Lanka will temporarily close its embassy in Abuja, capital of Nigeria, the consulate general in Frankfurt, Germany, and the consulate general in Nicosia, Cyprus, from December 31, 2021. The relevant functions will be set up in Nairobi and Berlin respectively. and Roman embassies abroad.

Sri Lanka's foreign ministry said in a statement that the restructuring was aimed at preserving the country's much-needed foreign exchange reserves and minimising spending. Without new sources of external financing, it will be difficult for the government to meet its foreign debt obligations in 2022 and 2023. Sri Lanka's finance ministry also said in a statement that the restructuring was aimed at protecting the country's much-needed foreign exchange reserves and minimising maintenance-related expenses for Sri Lanka's overseas missions.

Due to the outbreak, the tourism-reliant island nation has suffered huge losses—a huge dro in income and a near-depletion of foreign exchange reserves. In March 2020, the government imposed a broad import ban to shore up foreign exchange reserves, but the resulting shortages of essentials such as fuel and sugar caused prices to rise. Earlier, Fitch Ratings downgraded Sri Lanka's long-term foreign currency issuer default rating to 'CC' from 'CCC'.