The strong dollar reduced the world’s debt by 55 trillion dollars
The strength of the US dollar against the rest of the currencies,
and the decline of the major currencies against the dollar by about 12% in 2022,
was a major reason for the decline in the value of global debt
during the current year by 5.5 trillion dollars,
and this came compared to the first quarter,
this is the first decline in debt by dollar value since The third quarter in 2018,
and there is another reason related to the decline in debt issuance,
according to the report issued yesterday,
Wednesday, which includes debts of families
and financial and government institutions
Here are the details from the Evest platform
topic’s
Russia suffers billions in losses due to the sanctions imposed on it since its invasion of Ukraine
High borrowing costs
Due to the significant increase in costs related to borrowing and a loss of appetite among investors,
the issuance of the syndicated loan market witnessed a significant weakness in the loan markets,
while the pace of long-term bond issuances to non-financial companies was the slowest since 2014,
in addition to the decline in the pace of government bond issuance,
which It was about 20% less than the same period during the first eight months of 2021,
and after adjusting for inflation,
the volumes of global bond issuances fell to their lowest levels in recent years.
Debt devaluation stats
Reports indicated that there was a significant decline
to 300 trillion dollars in the volume of debt by the end of last June,
and this came after an increase during the first quarter of 2021 by about 2.5 trillion dollars,
while the developed markets fell to 201 trillion dollars
by about 4.9 trillion dollars during the second quarter of This year,
countries such as the United States and Canada witnessed
an increase in the volume of debt during the second quarter only,
as for emerging markets, they witnessed a decline of 600 billion dollars,
bringing the total debt to 99 trillion dollars.
Expectations of a rise in debt from GDP
By comparing the level of debt with GDP, we find that there is a significant difference,
at a time when debt witnessed increases for the first time during the last five quarters,
which reached 350% of GDP, and debt in emerging markets reached 252% of GDP,
and this It indicates a slowdown in growth,
in addition to that any inflationary pressure was not sufficient to reduce the debt rate
, and the Institute of International Finance referred to expectations
that the debt will continue to rise as a percentage of GDP until the end of this year.
artical name The strong dollar reduced the world’s debt by 55 trillion dollars
Russia suffers billions in losses due to the sanctions imposed on it since its invasion of Ukraine
The Russian war on Ukraine came with a strong and resolute international response,
and Russia was subjected to sanctions from the United States and Europe,
which caused billions of dollars in losses, which come in the form of “direct losses.
” The amount of $300 billion reserves represents a large part of the foreign exchange reserves,
but the reports did not specifically clarify the estimates of losses resulting from these sanctions,
but they clearly appear on the financial system and do not have strong effects on the economy,
and this comes after the remarkable recovery in the general index of the Russian Stock Exchange.
” MOEX” from 33% to 20% currently
Burton refuses to give up and stresses the strength of the economy
At a time when the Ministry of Finance refused to comment on the matter,
Russian President Vladimir Putin intervened and
said in televised statements on Monday of this week that
“Russia deals with confidence with any external pressures,
in addition to the stability of the economy, which is heading for growth.”
Financial system status
Reports also indicated the extent of the damage to the financial infrastructure,
and that more than 80% of the banking sector’s assets were also subjected to sanctions,
after being isolated from the most important financial transfer system “Swift”.
We also see the loss of access to major equipment and programs,
With reference to the disappearance of some assets from the ground such as derivatives,
hedging, and initial public offerings,
but we must understand the extent of the strong impact on the economy due to the restrictions
that pushed it to a recession expected to continue for 2023,
and perhaps also a long and deeper contraction than that
Impact of Sanctions on Russian Billionaires
The sanctions imposed on Russia have also affected many of the investments of Russian billionaires outside Russia,
which led to the return of more than 26 companies based in Russia this year,
but this comes to a while ago due to the US sanctions that began in 2018,
and large Russian investors find themselves forced to return To the arms of Putin and the Kremlin,
especially in light of this crucial stage,
and that any decision to the contrary is completely unrealistic,
but at the same time some believe that the most beneficiary is
“Putin” by attracting wealthy citizens again to Russia and those who have foreign relations
artical name The strong dollar reduced the world’s debt by 55 trillion dollars
Policymakers in Asia in the face of the dollar’s rise to stop the bleeding of losses for their currencies.
Many Asian currencies fell due to the strength of the US dollar,
and the policy maker in Asian countries is working to resist the matter to limit the losses caused
by the dollar after their currencies fell to much lower levels and may indicate further decline
Plans to counter the decline against the dollar
In Japan, officials seek to ask banks about the yen levels last Tuesday,
and this move was considered by some as the beginning of the intervention to save the currency,
which led to large purchases from traders, at the same time,
China resorted to setting the daily reference price for the yuan at the strongest bias level ever.
And officials in Asia are also seeking more measures,
including tightening with regard to traders’ bets
on a further decline in regional currencies against the US dollar,
in addition to curbing the excessive volatility
that the market may be exposed to with increasing losses and a decline in their currencies,
but there is another obstacle which is the shortage The obvious in the stock of foreign exchange,
which limits the ability of central banks in the face of dollar rises
The Japanese yen continued its successive declines from its lowest level in 24 years,
and this came in light of the warning of Japanese officials of any rapid moves,
and similarly, the won also completely ignored any changes
by policymakers to also decline to its lowest level since 2009,
and the external yuan lost a lot From its value for the seventh month in a row,
despite the efforts of officials to intervene to work to stabilize it significantly.
Goldman Sachs expects more pressure on emerging Asian currencies
As a natural result of the tightening policy used by the US Federal Reserve,
many emerging Asian currencies, which are characterized by high returns,
were affected by significant declines due to the loss of risk
and also a state of deterioration in external financing.
These declines included currencies such as the Indian rupee, the Indonesian rupiah,
and the Philippine peso. More pressure is expected in the coming weeks.
artical name The strong dollar reduced the world’s debt by 55 trillion dollars