Global Market Update: Oil Declines Almost 2% As investors Monitor Red Sea Events

Taiwo  Adekeye, FMVA

December 28, 2023

Oil prices dropped nearly 2% on Wednesday, eroding the previous day’s gains as investors monitor events in the Red Sea, where shippers are returning despite more attacks on Tuesday. Brent crude futures settled down $1.42 hitting $79.65 a barrel, while U.S. West Texas Intermediate crude fell $1.46 to $74.11.

Ethiopia: Ethiopia becomes Africa’s newest sovereign default

Africa’s second most populous country became Africa’s third default on Tuesday after it failed to make a $33 million coupon payment on its only international government bond. Bondholders had not been paid the coupon as of the end of Friday Dec. 22, the last international banking working day before the grace period expires. Credit ratings agency S&P Global then downgraded the bond, to “Default” on Dec. 15 on the assumption that the coupon payment would not be made.

Libya: Libya’s stock market resumes trading after close to a decade of closure

Libya’s Stock Market resumed trading on Monday at a hall in the capital Tripoli after more than nine years of closure because of the political and security situation. The bourse is one of the means to improve the Libyan economy. The importance of the stock market is embodied in doubling the gross domestic product and helping to close the budget deficit, which reduces the burden on the country’s general budget

India: forex reserves hit over 20 months’ high

India’s foreign exchange reserves rose for the fifth straight week, hiring an over 20-month high of $615.97 billion. The reserves rose by $9.1 billion last week, after climbing by a total of $16.5 billion in the prior four weeks. However, Indian debt and equity markets have seen net inflows of $9.2 billion in December, after receiving $2.9 billion in November.

Japan: Japan strives to control debt amid rising rates

The world’s third-largest economy is under pressure to restore its fiscal health after prolonged stimulus and spending worsened a national debt that is the heaviest in the industrialized world. The government adopted a higher interest rates estimate of 1.9% from the current 1.1% in the budget plan for the coming fiscal year, which would mark the first increase in 17 years. The higher assumed rates would push up debt-servicing costs to 27 trillion yen in fiscal 2024/25, up 7% from this year. The budget for the fiscal year that starts in April is estimated at 112.07 trillion yen ($787 billion), down 2% from the current year’s initial amount of 114.4 trillion yen.

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