The epidemic has been raging for more than a year, and the global economy has been severely impacted. The Federal Reserve’s unlimited quantitative easing policy and economic stimulus policy have caused high inflation in the global economy. The situation remains high, with a large amount of water being released from the US dollar, and other countries footing the bill. Many countries can no longer bear it!
The Turkish lira once plummeted 16%! Brazilian real depreciates 40%!
The lira once plummeted 16%, and Turkey raised interest rates to 19%!
In order to stem the US$1.9 trillion “flood” in the United States, on March 18, the Turkish Central Bank announced an interest rate hike of 200 basis points to 19% to control Inflation rate close to 16% and lira depreciation.
But Turkish Central Bank Governor Alba’s frequent interest rate hikes angered President Erdogan, who advocated interest rate cuts, so the iron-fisted president announced in the early hours of Saturday morning local time The announcement of the removal of the hawkish governor is the third time Erdogan has suddenly replaced a central bank governor since mid-2019.
Abal has been committed to rebuilding the credibility of the Turkish Central Bank. In less than five months after he took office, the Turkish Central Bank raised interest rates by 875 basis points to 19%. , regained some policy credibility, and the lira also rebounded from its lows. Now that he has been removed from office, investor confidence has collapsed, which has been immediately reflected in the lira exchange rate.
Leuchtmann of Commerzbank believes that the lira will depreciate to $8.75 against the dollar by the end of 2021, a drop of about 10% from current levels. The lira has ended in decline for eight consecutive years, with most annual declines exceeding 10%.
Customers at a currency exchange store in Istanbul, Turkey Queuing outside the store
What needs special attention is that Turkish Customs has a strange rule. If the goods are returned after arriving at the port, the consignee must give written consent and show “Rejection” “Notice of Receipt”, the goods become Turkish assets after entering the Turkish port. For goods that have been stranded at the port for a long time or no one has picked up the goods, the customs will treat them as having no owner and have the right to auction the goods. At this time, the original importer is the first purchaser. .
Certain regulations of Turkish Customs have been exploited by unscrupulous domestic buyers for many years. If exporters are not careful, they will be in a very passive position. Therefore, when exporting to Türkiye in the near future, please be sure to pay attention to the security of your payment!
Brazilian prices are skyrocketing! The currency is severely devalued!
Data from the National Institute of Geography and Statistics of Brazil show that from January to November 2020, food prices in Brazil rose by 16%. As staple foods, Brazil’s rice and black beans have seen the largest price increases, at 70% and 40% respectively. The imported inflation of the U.S. dollar has caused actual disasters in Brazil. We have seen that since January 2020, the U.S. dollar has soared against the Brazilian real, and the Brazilian currency has passively depreciated by nearly 40%.
At the same time, according to the latest statistics from the Brazilian National Institute of Geography and Statistics, Brazil’s gross domestic product (GDP) fell by 4.1% year-on-year in 2020, a decline greater than that in 2015 -3.5%, a new low since the current GDP statistics method was adopted in 1996.
In other words, Brazil’s overall economy is shrinking in 2020, and the cash in Brazilian people’s hands has depreciated by 40%, and they are suffering from inflation. Prices have risen to ridiculous levels.
Brazil cannot hold on any longer and announces a rate hike!
Brazil’s central bank raised the Selic target interest rate by 75 basis points to 2.75% on Wednesday, marking Brazil’s first interest rate increase since 2015. The central bank’s policy committee also said it would raise the Ceric rate by a further 75 basis points at its May meeting unless there are significant changes in inflation expectations and the balance of risks.
Market expectations for interest rate hikes in countries such as India, South Korea, Malaysia and Thailand are rising, and a wave of interest rate hikes is coming. For many emerging market countries, not only do they have to face their own economic recovery in the post-epidemic crisis era, but the greater difficulty is the imported inflation brought about by the strong recovery of the U.S. economy, which is very difficult for many emerging market countries.
The risk of abandoned goods in the 30 billion textile market has surged!
Affected by the epidemic, inflation, and exchange rate fluctuations, after H&M, many foreign clothing brands were “exploded” on the hot searches! Fabric suppliers respond: What is the impact of textile orders? Affected by factors such as the epidemic and political turmoil, Brazil’s export defaults have been frequent, and such “intermediary default cases” have appeared since the beginning of the year. It is recommended that exporters should try to avoid signing contracts with Brazilian middlemen. At the same time, Brazilian Customs’ special policies and very strict requirements for customs declaration documents make Brazilian Customs one of the strictest customs in the world.
In 2020, Brazil imported Chinese goods with a total value of 241.65 billion yuan, of which textile imports were 19.94 billion yuan; Turkey imported Chinese goods with a total value of 140.98 billion yuan, of which textile imports were 108. billion. The textile market in the two regions exceeds 30 billion yuan, involving a large number of domestic textile companies. Now the currencies of these two countries have depreciated significantly, which has virtually increased the export price of my country’s textiles. Especially for some fabric products that have been shipped and have just arrived at the port, it is likely that the fabric customer will default on the order and cancel the order. In addition, the fabric orders currently being processed and discussed may be pushed back due to the depreciation of the customer’s currency.Risk of delay and cancellation.
Friends of freight forwarders and cargo owners who have recently traded with ports in these countries and regions should still pay attention to the risk control of payment and delivery, and beware of customs clearance at the destination port, and no one will pick up the goods or buyers at the destination port. Issues such as abandoned goods and non-payment.
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