Headlines

The cost of insuring Russia’s government debt rose to a record high after President Vladimir Putin signed a decree allowing it to repay foreign creditors in rubles, raising concerns about the prospects of a default across the country’s $33 billion of dollar bonds, Bloomberg News reported. Credit-default swaps insuring $10 million of the country’s notes for five years were quoted at about $5.8 million upfront and $100,000 annually on Monday, signaling around 80% likelihood of default, according to ICE Data Services. ICE is the main clearing house for European CDS.

Some holders of a $1.3 billion Gazprom PJSC bond due Monday said they received payment in dollars, even after Russian President Vladimir Putin gave issuers the option of repaying foreign-currency debt in rubles, Bloomberg News reported. Bondholders said they received cash to pay off the bonds Monday. The bond paid Monday was among those snapped up at distressed prices last week as Wall Street investors eyed buying opportunities amid Russia’s invasion of Ukraine. Goldman Sachs Group Inc. and JPMorgan Chase & Co.

China’s government signaled more stimulus is on the cards by setting an aggressive economic growth target, calling for confidence amid rising domestic strains and global instability stemming from Russia’s invasion of Ukraine, Bloomberg News reported. While the growth goal of about 5.5% for this year is the lowest in more than three decades, it’s above consensus forecasts closer to 5% and far higher than the International Monetary Fund’s projection of a 4.8% expansion.

China's export growth slowed in the January-February period largely due to base effects, and though the data beat expectations, Russia's invasion of Ukraine has heightened uncertainty over the outlook for global trade this year, Reuters reported. Outbound shipments rose 16.3% in the first two months of the year from the same period a year earlier, official data showed on Monday, beating analyst expectations for a 15.0% rise, but down from 20.9% gain in December. Imports increased 15.5%, easing from a 19.5% gain in December and below the forecast 16.5% increase.

Sri Lanka devalued its currency as foreign exchange reserves fell to the lowest since November 2021, reflecting a continued challenge for the country’s ability to import essentials, keep the power on and service its debt, Bloomberg News reported. “Greater flexibility in the exchange rate will be allowed to the markets with immediate effect,” while the rupee will be capped at 230 per US dollar, the Central Bank of Sri Lanka said in a statement.

The Philippines’ credit rating is unlikely to be downgraded because the country’s debt, which has risen to 12 trillion pesos ($232 billion), remains manageable, central bank Governor Benjamin Diokno said, Bloomberg News reported. The Southeast Asian nation’s level of debt is sustainable, with economic growth expected to outpace an increase in borrowings, Diokno said in a statement Sunday. The debt-to-GDP ratio of 61% is also manageable, compared with other countries, he said.

Banks may continue to drift away from London if the European Central Bank intensifies its scrutiny of their presence in the bloc, the Bank of England’s deputy governor said, Bloomberg News reported. Jon Cunliffe said the ECB may require some business to move back to the European Union following its ongoing review of banks’ booking models and trading desks. He added that firms may respond by moving to the U.S. instead or elsewhere in the coming years.

After a pandemic and a global chip crunch, Russia’s war in Ukraine has unleashed auto makers’ third supply-chain crisis in as many years, the Wall Street Journal reported. The fighting in Ukraine has shut down small but important industry suppliers, shutting plants far away from the conflict zone, while sanctions and severed trade routes are hindering car and parts shipments to and from Russia, once seen as a growth market.

Textile and leather goods' makers in Istanbul's garment district are feeling the impact of Russia's invasion of Ukraine as customers in Moscow and Kyiv have canceled $200 million in orders in the past week, industry officials say, Reuters reported. The loss of trade adds to strains on Turkey's economy, with officials estimating that more than $1 billion is directly at risk to the textile industry alone if the conflict in Ukraine continues.

The recovery ratio for creditors through the Insolvency and Bankruptcy Code (IBC) has fallen to its lowest level ever, highlighting the challenges that lenders face as bidders turn cautious due to an uncertain economic environment even as court approvals have slowed down, the Economic Times of India reported. Latest data from the Insolvency and Bankruptcy Board of India (IBBI) shows that out of the admitted claims of Rs 32,861.90 crore resolved in the quarter ended December 2021, creditors recovered just Rs 4406.76 crore or just 13.41%.