Brazil, Ukraine and Then Chile? EM Traders Bet on Next Rate Hike
Money managers from Kinea Investimentos, Ace Capital and Itau Asset Management have all bet on higher swap rates as inflation proves surprisingly stubborn in the Latin American nation and the economy shows signs of life.
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Yahoo
3 hours ago
- Yahoo
‘I Don't Think There's a Government in Latin America That Has Given In More'
PANAMA CITY — In his campaign and after his election, Donald Trump complained about high transit fees for U.S. ships crossing the Panama Canal, said the waterway was controlled by China and pledged to retake it. Now, eight months into his administration, he has looked far beyond the canal for ways to undercut Chinese influence in Panama — and created a political headache for leaders here. The clearest example of the difficult situation Panamanian leaders find themselves in came in June, when the U.S. embassy in Panama announced that the United States was funding the replacement of phone towers built and operated by Huawei, the Chinese tech company, with those made by an American company. The embassy stated openly that the goal of the plan was to 'counter China' in the country. The announcement caught Panama's president off guard. Already facing a national uproar over his previous perceived concessions to Trump, José Raúl Mulino quickly criticized the announcement but did not deny it. 'I ask the U.S. Embassy to refrain from making public pronouncements about decisions made solely by the Panamanian government, regardless of the cooperation that may exist,' he told reporters, adding that he would personally inspect the new antenna installations. The dust-up illuminated just how wide-ranging the United States' plan to counter Chinese influence in Panama is — and how politically thorny it's becoming for Panama's government. In recent years, China has wooed Panama and other Latin American countries with economic and security pledges in a bid to chip away at America's influence in the region — building ports in Peru, smart cities in Brazil and a space facility in Argentina, while also loaning the region billions of dollars. China has undertaken a similar influence campaign in developing regions across the world, most notably in Africa. Its ultimate goal is to reap the trade and economic benefits of such projects and firmly assert itself throughout the world as a superpower. In Panama, the clearest signs of a split with China can be seen in diplomatic relations. First, Mulino announced in February that Panama would not renew its membership in China's Belt and Road Initiative, a global infrastructure investment program that China has brought to countries ranging from Greece to Tanzania. Then there's the fact that neither Mulino nor anyone in his cabinet has held a publicized meeting with a Chinese official since November, when Mulino met with Xu Xueyuan, China's ambassador to Panama. By contrast, Mulino has met publicly at least three times with Kevin Marino Cabrera, a former Miami-Dade County commissioner who was tapped by Trump to be America's ambassador to Panama in February. 'My first priority will be to reinforce our joint work to counter malign influences in the region, such as China's,' Cabrera said in a press conference after arriving in Panama. In the meantime, Chinese officials have been afforded meetings with low-level representatives, former diplomats and political party leaders in Panama — a marked change from just a year ago, when Mulino conveyed to Xi Jinping his wish to 'constantly lift Panama-China relations to a higher level.' In May, at a high-profile summit in Beijing between China and Latin America — attended by 17 foreign ministers and the presidents of Brazil, Chile and Colombia — Mulino and other high-level Panamanian officials were conspicuously absent. Instead, Panama dispatched only its ambassador and head of Asia-Pacific affairs. The summit marked the only diplomatic trip to China by a Panamanian official since Mulino took office, according to visit records. 'You have the chance to speak with [China's] Minister of Foreign Affairs and the Minister of Commerce, or whoever it is you want, and Panama didn't send even a vice minister,' said Sebastian Naranjo, a Panamanian scholar who used to lead the Asia-Pacific division of Panama's Ministry of Foreign Affairs. 'There's been a clear separation and slowdown' in Panama-Chinese relations, he said. Beyond these signs of cooling diplomatic relations, once-growing commercial activity between the two countries appears to be dwindling, too, particularly on big infrastructure projects. While China was once the exclusive superpower bidding for a stake in major projects like the fourth bridge over the Panama Canal and a new metro line in Panama City, the United States appears to be vying to replace it on some major transportation projects in Panama. After Trump's election, Mulino's administration hired the American firm AECOM to revise a master plan, first completed by a Chinese company, for a high-speed rail line across the country. In June, Mulino met with leaders from a dozen American companies, including Visa, Pfizer, JP Morgan and Amazon, which is eyeing Panama as the site of a potential data center or distribution or logistics hub. Earlier this year, Amazon launched free delivery in Panama and met with Panama City's mayor to discuss a partnership program that helps cities migrate municipal technology and software to Amazon Web Services. The global spotlight, though, remains squarely on the Panama Canal, where China's grip on development is loosening, too, and American influence is stepping in to fill it. A consortium of companies led by the American firm BlackRock is in negotiations to acquire two ports on the canal owned by the Hong Kong-based CK Hutchison, which is looking to sell its $22.8 billion international ports business. The sale was touted by Trump as a victory in his campaign against Chinese influence along the canal. For now, it's unclear if it will go through: Panama Canal Authority administrator Ricaurte Vásquez Morales has raised concerns that the acquisition could compromise the canal's neutrality, and Chinese regulators have put the sale on hold as Beijing continues to haggle for a stake in the deal. The Panama Canal advisory board, a group of business leaders that reviews toll increases and counsels Vásquez and the board of directors, also lacks a Chinese member for the first time in decades, after the country's sole representative, Wang Haimin, the executive vice president of China Ocean Shipping Company, departed the board last winter. His exit, confirmed by advisory board member Joe Reeder, could put the canal's second-largest user at a disadvantage at a critical moment. 'There is every reason in the world for COSCO to be on that board, because they're, if not the largest, one of the largest users of the canal,' said Evan Ellis, a professor of Latin American studies at the United States Army War College who called Haimin's departure 'an anomaly whose timing coincides with the ratcheting up of U.S. pressure.' All of this has been noted by Panamanians — many of whom have been unhappy with Mulino's deference to Trump and, specifically, with his spurning of China. Panama's compliance with Trump's demands, such as an April agreement to allow more American forces onto Panamanian military bases, has proven unpopular. Thousands of Panamanians marched in May against the agreement, compounding a wave of domestic turmoil in the country triggered by social security reforms passed in March. A July poll found that 73.6 percent of Panamanians disapprove of the national government, up from 14.8 percent in October. 'I think there's a level of annoyance [regarding Mulino's deference to Trump],' said Jose Isabel Blandón Figueroa, the leader of the country's Panameñista Party, who enjoyed warm relations with U.S. ambassadors as mayor of Panama City. 'I don't think there's a government in Latin America that has given in more [to Trump] than the Panamanian government.' 'Segments of society in Panama — not anti-American, not pro-American either, just people who believe in a good relationship [with the U.S.] — are reacting negatively,' Edwin Cabrera, a well-known Panamanian radio host, said. 'Now, even professional middle-class sectors are asking: Why does the U.S. have to say these things?' And then there's the question of whether rejecting China could negatively affect Panama, which has benefited from years of Chinese investment and partnership on development projects. During my three-week visit in June, taxi drivers, tour guides and analysts were quick to speak highly of Panama's historic ties to China, dating back to the construction of the Panama Canal Railway, and name Chinese members of their family. Panama is home to Central America's largest Chinese community — a presence dating back to the mid 19th-century that's evident in the capital's Chinatown neighborhood — a fact now frequently invoked by Chinese officials. 'The [Chinese] embassy people here feel ignored, they are completely out of any relations with the government — and they say that probably will affect Panama,' said Guillermo Cochez, Panama's former representative to the Organization of American States who discussed the 'stagnation' in China-Panama relations at a meeting with Xu on May 23. Panamanian leaders seem to understand the risk of blowback from their own voters and China. 'What [Panama has] tried to do is deal with the low hanging fruit to show the U.S. that they're moving in the direction of decoupling and reducing Chinese influence … while at the same time not triggering a Chinese response,' said Orlando Pérez, an expert on Panamanian affairs at the University of North Texas at Dallas. Panama, for its part, claims to want no involvement in the U.S.-China rivalry. 'They should fight their fight in Washington or in Beijing, but not in Panama's backyard,' Mulino said at a press conference on June 12. Solve the daily Crossword
USA Today
a day ago
- USA Today
Banreservas Shows Public Banking's Potential: The Dominican Lender Powering Growth at Home and Abroad
Banco de Reservas (Banreservas) is rewriting conventional wisdom about banks. Long viewed as slow, politically entangled institutions, public lenders rarely make headlines for record profits or overseas expansion — but the Dominican Republic's 83-year-old Banco de Reservas is doing both. Since 2020, the bank has nearly doubled its assets, opened offices in New York, Miami, and Madrid to serve the Dominican diaspora. Its momentum coincides with a five-year run in which the Dominican economy has outpaced most of Latin America, suggesting a virtuous feedback loop between smart public finance and national growth. Banreservas and the Dominican economic upswing Banreservas has expanded almost in lockstep with its home economy. In 2024, the country's GDP grew by five percent — twice the Latin American average — while public debt fell and exports reached a record US$13.85 billion. As the government's principal financial arm, Banreservas channels many of the funds behind those numbers, from infrastructure loans to credit lines for exporters. An annual survey by The Banker places Banreservas in the 'top 1000 World Banks 2025,' up 43 slots in a single year and comfortably inside the region's top five by Tier 1 capital. That climb is partly the result of a balance sheet that has almost doubled since 2020. In late June, the bank reported a credit portfolio of RD$601 billion (about US$10 billion) — an 89 percent increase in five years. Banreservas strengthens financial inclusion Among them is this administration's flagship program, Bancarizar es Patria, a nationwide effort that combines access to banking with basic money management workshops. When the ninth outreach event rolled into the working-class Capotillo neighborhood in June, Pereyra framed the effort in civic terms (translating from Spanish to English), 'Financial inclusion is a fundamental element of any free and fair society. When someone leaves here with a new savings account, they hold in their hands a great opportunity to start planning for their future with the support of the bank of all Dominicans.' Financial access drives are one reason ratings agencies, such as Fitch, cite Banreservas' strong franchise and 32 percent domestic asset share when explaining its positive credit outlook. Beyond borders: Banreservas' first offices in Miami, New York, and Madrid Public banks rarely expand overseas, but Banreservas has done so for a practical reason: nearly 3 million Dominicans live abroad. Between 2023 and 2024, the lender opened representative offices in Madrid, Miami, and New York, becoming the first Dominican bank with a presence in these significant international cities. Because all transactions settle in Santo Domingo, the outposts bypass the regulatory hurdles of full branches while still allowing expatriates to apply for mortgages, open remittance accounts, and invest in Dominican projects without needing to board a plane. Financing the engines of growth The bank's lending book increasingly targets sectors that underpin the country's expansion. Tourism, which the World Travel & Tourism Council projects will contribute more than US$21 billion to national GDP this year, receives a dedicated credit line that already exceeds RD$40 billion (approximately USD$665 million). Manufacturing, housing, and small businesses draw similar revolving facilities, often at rates below those available from private lenders. Banreservas's approach pairs commercial discipline with a public policy mandate. Awards for corporate governance and digital banking from Global Finance and Euromoney further underscore operational standards that align with its regional ambitions. What success means for the other emerging-market banks Critics often argue that public banks crowd out private capital or become instruments of political influence. Banreservas provides a counterexample: the institution's profitability, return on equity, and capital adequacy metrics have all improved, while also widening access to credit. The Dominican experience will not map perfectly onto every emerging market. Yet it suggests that, with clear governance rules and commercially minded managers, a state lender can support national goals — such as export promotion and diaspora engagement — without sacrificing efficiency. Looking ahead Banreservas says it will continue to grow organically and prudently. The bank's current administration remains focused on generating conditions and opportunities for Dominicans and the Dominican economy through large-scale loans for substantial tourism projects and affordable housing construction, medium-scale loans for small- and medium-sized enterprises (SMEs), and smaller-scale individual loans for homes and cars. Whether those plans materialize, the bank's recent trajectory already challenges a long-held assumption that public ownership and high performance in banking are mutually exclusive. In the Dominican Republic, they increasingly resemble two sides of the same coin. By centering everyday users rather than balance‑sheet optics, Banreservas aims to convert public trust into measurable growth. In the Dominican Republic, public ownership and high performance now share common ground, and the people‑first mandate at Banreservas is a big reason why. Investing involves risk, and your investment may lose value. Past performance gives no indication of future results. These statements do not constitute and cannot replace investment advice.
Yahoo
2 days ago
- Yahoo
Bolivia set to elect first non-left wing president in two decades
Bolivia is set to elect a non-left wing president after nearly two decades of near-continuous rule by the incumbent socialist party, according to official preliminary results. Senator Rodrigo Paz Pereira and former president Jorge Quiroga came in first and second place respectively in Sunday's presidential elections. Neither received a high enough share of the vote to secure an outright win, so the vote will go to a run-off between these two candidates, due in October. Paz Pereira, of the Christian Democratic Party, was a surprise vote leader, after opinion polls had suggested Samuel Doria Medina, a businessman, was the frontrunner. The electoral authorities said it can take up to three days to finalise the results. Paz Pereira's campaign focused on redistributing more funds away from central government towards regional entities, and fighting corruption - with his slogan "capitalism for all, not just a few". He has suggested a programme of accessible credit, tax breaks to boost the formal economy, and eliminating import barriers for products that Bolivia doesn't manufacture. Quiroga briefly acted as interim president from 2001-2002 after serving as Vice President to Hugo Banzer, a military dictator until he was later elected. The election of a president from outside the left camp will likely see sharp changes in the Latin American country's foreign policy. In terms of trade, both candidate's capitalist stances could indicate more support for foreign investment in Bolivia's vast lithium reserves - the key ingredient for batteries used in many electric cars, laptops and solar panels. Politically, a change in government could mark closer ties with the US, after two decades of strengthening ties between Bolivia and China, Russia and Iran. A recent US Congress report briefing described US-Bolivia relations as "strained" under the socialist party's governance. The country's turn to the right comes as it is experiencing its worst economic crisis in years, with shortages of fuel, foreign reserves and some food items and high inflation and debt. Opinion polls ahead of the election suggested that many voters wanted to vote for change, or to punish the incumbent Movimiento al Socialismo (MAS) party. The current president, Luis Arce, mired in deep unpopularity, decided not to seek re-election. The punishment of the left is not just electoral, but physical in some cases. The candidate for MAS, Eduardo del Castillo, was booed out of the school where he cast his vote. Bolivian media reported that some fellow voters told him to "wait in line like they do for fuel" rather than skip the voting queue. People also threw stones at the highest-polling left-wing candidate, Andrónico Rodríguez, when he went to cast his ballot. Rodríguez was previously a member of MAS before splintering from the party. Authorities in Bolivia also said that an explosive device was set off at the polling station where Rodríguez cast his vote. There were no reports of significant damage or injuries. Rodríguez described it as an "isolated incident" orchestrated by a "small group" to a Bolivian newspaper. The left has not just faced recent unpopularity over the economy. It is also deeply divided. For the first time in about two decades, the former president, Evo Morales, was not on the ballot. Morales ruled the country from 2006-2019 and was barred from running again, despite attempts to challenge legal and constitutional rulings to let him run for a fourth term. He has urged his supporters to null their vote. Rodríguez was once seen as a protégé of Morales, but has since distanced himself from him. The last election in 2019 was disputed and protests erupted. Morales was accused of fraud after auditors found irregularities with the poll and he resigned under pressure from the military. In 2020, Luis Arce - a former finance minister under Morales - took office as president. Morales then announced he would return to politics in Bolivia, and deprived Arce of a majority - turning the pair from allies to rivals. Deep rifts and power struggles have existed in the ruling MAS party ever since. Morales's supporters have held protests and roadblocks against the re-election ban imposed on him, which have at times turned deadly with some emergency responders being killed. Judges ordered an arrest warrant for Morales over an alleged sexual relationship and rape of a 15-year-old girl. He has called the accusations politically-motivated. He has been living and operating from Chapare in Bolivia, protected at times by his supporters.
