Question:

Can you please provide a link to the official data source for the international reserves data for Azerbaijan?

The question was asked in relation to the following story: FX Reserves increase to USD 11.25bn in Aug

Answer:

Here you go: https://www.cbar.az/home?language=en, then you click on Monetary Indicators on the right hand-side. For historical data, click on Statistics, then Monetary Indicators, then choose Analytical Balance of CBA.

Question:

Do these budget realisations include defence spending? If so, how would they look like without defence spending in the context of the EC's exceptional circumstances clause to exceed the 3% of GDP deficit threshold ?

The question was asked in relation to the following story: Government budget deficit soars y/y to BGN 5.2bn in Jan-Aug

Answer:

The budget figures for Jan-Aug 2025 include defence spending, which was allocated a total of BGN 4.2bn (EUR 2.1bn) or 1.9% of GDP in the 2025 budget law. The funds for the defence spending in 2025 were doubled y/y compared to 2024, in order to cover wage hikes in the sector and a few purchases of military technologies and equipment, without any major investments. However, it is rather too early to take the defence spending out of the figures. The EC exceptional clause was indeed officially activated in early July, but the Bulgarian finance ministry had told local media earlier in May that it was not going to apply it in 2025, highlighting it had no plans to increase the already approved defence spending for the year in the budget. The finance ministry explained that they needed time to prepare the launch and drafting of investment projects for defence, as well as their cost estimation and scheduling, and noted that the parliament has to approve any projects for large investments first, which additionally slows down the process. Thus, defence spending is unlikely be used to justify the exceeding of the 3% of GDP deficit target in 2025.

Probably, the escape clause will be used as of 2026 onwards, but more details will be known after the finance ministry releases the draft 2026 budget bill, most likely at end-October. Bulgaria's government is expected to prepare the list of the planned defence investments, which will be funded under the SAFE mechanism by November, according to previous information. All the expenditures financed under the SAFE instrument will automatically be considered as falling in the scope of the defence spending derogation, the finance ministry had also explained, expecting that the absorption of the loan tranches will start as of 2026.

Question:

Thank you for your answer earlier regarding the Czech elections. I would have a data source query please, could you help me find a reliable data source for the election calendars across the world? Thank you for your help.

The question was asked in relation to the following story: General election and bond market

Answer:

We believe the most concise and complete information can be found in a Wikipedia entry here:

https://en.wikipedia.org/wiki/2025_national_electoral_calendar

They also have information for upcoming years, just click on the year in the top right box. Naturally, since this is a Wikipedia entry, you should take the information with some grain of salt. However, most entries have a source attached, so it should be easy to verify.

Question:

Regarding the Registered labour market database. As far as a understand, the unemployment data are reported by the unemplyed workers, but what about the unfilled vacancies data? Are they reported by the companies? Still on this, what is the exact definition of layoffs when dealing with open vacancies? Because as far as I am concern a layoff would mean that a filled position is destroyed, not an open position as you described (layoffs reducing the number of vacancies). Finally, what is the difference between "new announced vacancies" and "newly vacated position"? Thank you.

The question was asked in relation to the following story: Czech registered unemployment series

Answer:

Technically, unemployed numbers are provided by state employment bureaus, collected when people looking for employment officially register. It means that people who are looking for work but do not register are not captured by this metric. However, the registration provides access to the universal healthcare system and a period of unemployment benefits (5 months in the typical case), so many people make the effort to register. Yet, no one is legally obliged to register as jobseeker, which is why labour force surveys are a better metric for unemployment.

Unfilled vacancies are reported by companies. As far as layoffs are concerned, we are not arguing about definitions, we only explained what the labour ministry did. The idea is that they decided to remove vacancies that have remained unfilled for a period longer than 6 months, effective of 2025. We suppose they wanted to keep their formula, according to which the month-on-month change in available vacancies is equal to: newly available vacancies + newly vacated positions - layoffs - filled-in positions. One note about this - until the end of 2024, these numbers lined up precisely, but there have been discrepancies as of 2025. We asked the labour ministry about it, but they did not provide an answer. Personally, we disagree with their choice how to handle the methodology change, but it is not up to us.

"Newly announced vacancies" are unfilled positions that companies want to create, i.e. they want to permanently increase their workforce. "Newly vacated positions" are positions that existed before but have remained unfilled because the people occupying them left, whatever the reason. Thus, newly vacated positions are not meant to change the existing labour force. And to illustrate, the meanings of layoffs and filled-in positions are the opposite of these two. Thus, by their definition, layoffs are positions that are being destroyed (so the workforce decreases permanently), while filled-in positions are vacated positions that are occupied again (so the workforce doesn't change).

Question:

Hi, do you know if this means lower prices for both households and corporates? Thanks!

The question was asked in relation to the following story: ANO plans to cut retail energy prices by at least 20% in 2026 - Havlicek

Answer:

It remains unclear at this point. While Havlicek's remarks implied that the scheme would apply to business entities as well, no one in ANO has mentioned anything about it since. We suppose the focus on households is understandable, given the general election. Yet, without a clear statement that the scheme will extend to corporations, we would rather not claim that. We hope we get more details soon after the election.

Question:

Thank you for the report. I had a question regarding your comment on Stacilo!'s performance. You mentioned that the party "has been steadily on a decline", but looking at the polls, the only one showing a recent decline is STEM. They were trending lower on NMS, but the latest reading shows a rebound, and in all the other polls (Median, Ipsos, Kantar), their numbers seem to be improving. Are you seeing any data suggesting a broader deterioration in support? Or is there a particular reason to place more weight on the STEM series? Thanks!

The question was asked in relation to the following story: ANO likely to lead the next government, but path to power may be thorny

Answer:

As far as the Kantar poll is concerned, its field work was Sep 1-19, so it covers mostly the first half of the month when its numbers match the rest. This mostly applies to Median, whose fieldwork is Sep 1-25, so the odds are the sample is shifted towards a period earlier than later in September. Besides, Median also shows a decline when compared to August (by 2pps), and the TV debates we refer to took place only in the past week or so.

This leaves NMS, about which we have some reservations. That pollster already admitted sample issues during the summer, and it tends to report big swings for some parties, up and down, without any plausible explanation. For example, it has Stacilo! at 8.2% in early August, then at 5.5% in early September, and then back at 7.3% in late September. The same goes for most other parties, as they have reported swings of 1-2pps in the past 3 weeks, which suggests their sampling methods are not the most reliable. It is why we are putting more weight on STEM, as their numbers have been very consistent, and they have had the entire year to refine their sample.

Maybe we are doubting NMS numbers too much, but at least in our experience, any pollster whose numbers swing too much is not reliable.

Question:

Thank you for this. Are you able to give some information on timings of When we will know results on Saturday and are there Friday exit polls? Are seat counts calculated immediately and are recounts prevalent? Also, how long may it be before we have a clear idea on next government? Thanks in advance!

The question was asked in relation to the following story: ANO likely to lead the next government, but path to power may be thorny

Answer:

Results will start showing up on Saturday afternoon, though ballot counting has been traditionally fast, so preliminary results will likely be available some time on Saturday evening, including seat distribution. To compare with the previous election, a sample of 98.67% of polling stations was available, though seat distribution was preliminary. Final results were then published some time on Sunday (we don't recall the exact time, though). Recounts rarely happen, so this has never been an issue. There are no exit polls available on Friday. These can be published only after the election day is over on Saturday, so after 14:00 CET.

As far as the next government is concerned, it is a question that is not that easy to answer. It will depend largely on election results, as well as on political will to reach an agreement quickly. If ANO does better than currently expected, then the odds are a government will be formed faster. If not, talks may last for a couple of months. If there is no clear way to establish a majority this time around, talks will likely stall. As we have pointed out, there is no formal deadline to appoint a new prime minister, and there have been elections where it has been months before a permanent government is installed. The most recent example is the 2017 election, which took place on Oct 20-21, while a coalition agreement signed on Jun 15, 2018.

On the other hand, it could take much shorter than that, as it happened at the previous general election in 2021. The current ruling coalition took about a month to negotiate, as it was clear they could establish an absolute majority with the seats they had. Talks started immediately after final results were available on Oct 10, 2011 (the election took place on Oct 8-9), and the coalition agreement was signed on Nov 8.

Question:

Would you be able to assess how consequential the election is to the bond market, please?

The question was asked in relation to the following story: ANO maintains massive lead just before election - poll

Answer:

In short, the election will be likely very consequential, as this time, a major shift in fiscal policy is more likely than before. ANO, the leading opposition party, will likely need to ally with other populist formations to establish a government, It means fiscal policy will be heavily expansionary during the entire government term, and financing needs will rise respectively. Some of the biggest promises ANO has made, and will likely try to deliver on, include a reversal of pension reform (so eliminating savings at about 1.5% of GDP annually), subsidised energy prices (which ANO estimates will cost CZK 50bn annually), a 2pp corporate income tax cut, back to 19% (about CZK 30bn), expansion and restoration of some social benefits (unclear fiscal impact).

While ANO has technically committed to keep the fiscal deficit within 3% of GDP, we are sceptical they will be able to deliver on that promise. ANO's formula appears to be to stimulate the economy with the hope that it will generate tax revenue for all the generous spending, something that usually doesn't happen. The SPD is even more extreme, as it wants nationalisation of major companies, state-run grocery chains that offer subsidised foodstuffs, and even heavier subsidies on energy prices. Both parties plan some kind of mortgage subsidy schemes as well (no details provided), as well as publicly funded housing with rent control.

Thus, reversing the current course of fiscal consolidation and maintaining high fiscal deficits will be very certainly consequential on the bond market. At the very least, Czech debt will see a rating outlook downgrade in the first year of the new government, and when it becomes clear that spending will remain high, the odds are the Czech Republic may lose its AA- credit rating. Given that general government debt is still at medium levels, i.e. 43-44% of GDP, so further downgrades are unlikely. However, this will depend on how loose the new government lets fiscal policy go. ANO leader Andrej Babis has been an admirer of Donald Trump and his economic policy, so rising public debt will hardly be a deterrent for an ANO-led government.

We hope you realise that a big part of this is speculation, as party manifestos contained few details, much fewer than usual. Thus, we will need to see the first budget that the new government prepares, though the odds are it will be much looser than what the outgoing government had proposed.

Question:

Regarding the renewal of expiring mortgages from 20-21 with a 3y fixed, you noted this is taking place during the 2025-2026 period. do you have more details with regards to the size of this / how advanced we are in this reset programme?

The question was asked in relation to the following story: Home prices pick up growth to 10.5% y/y in Q2 2025 - CSU

Answer:

The answer will not as precise as we would like, as the CNB's data could be a bit more granular, but it still provides a fair insight. The breakdown available is fixation periods of up to 1 year, over 1 and up to 3 years, over 3 and up to 5 years, and over 5 years. Based on this, new mortgage loans with an interest rate fixation period over 3 years were about 90% of the total from early 2020 until early 2022. In contrast, their share has fallen in the 20-25% range in 2025.

Unfortunately, there is little distinction between loans that have a fixation period close to 5 years (over and under) and those that are far from that level. Some external surveys argue that the most typical fixation period was 5-6 years, but this is spread over the two fixation categories that the CNB provides, and we cannot say with any precision which is which. Still, another breakdown (not entirely compatible with this one) says that loans with a fixation period over 10 years are typically around 3-4% of the total. Thus, it is relatively safe to assume that the greater part of the group with a fixation period of 5+ years falls within the 5-10 years range (say, around 75-80%).

Meanwhile, loans with a fixation period over 1 year and up to 3 years have been in the 60-70% range since mid-2024 (and it was 7-8% in 2020-2021).

Regarding how far advanced this has gone, it is not that easy to say, as a part of these loans have been probably paid out already. Given that the peak of those new loans appears to have been between early 2020 and early 2022, we would say late 2026/early 2027 would be the time when all of these loans get a new (and higher) lending rate. Since the weights of new loans were fairly steady in 2020-2021, we would assume that about half of these loans will be reset by the end of this year. Given that NPL ratios have remained very low, at least in H1 2025, it appears there has been no adverse impact on credit quality, at least for now.

You can find the data through the link below:

https://www.cnb.cz/arad/#/en/indicators/0.0.0.1.0

The parameters we used for this breakdown are as follows: volume, households - population, the lower half of the fixation period box (i.e. 1-3 years, 3-5 years, 5+ years), mortgage loan for residential estate in the purpose box, total for loan type (so it includes refinanced loans), and banks including building societies. You will notice there is another breakdown by fixation period. This one uses households + NPSIH and housing loans, instead of households - population and mortgage loans, so not completely comparable.

Question:

What is the context behind the increases in deposit insurance? Do authorities have concerns about possible bank runs? Advanced economies raised the limits during the global financial crisis.

The question was asked in relation to the following story: Deposit insurance limit increases from GEL 30,000 to 50,000

Answer:

There is no concern whatsoever about possible bank runs.

The increase to 50,000 GEL is part of a planned, staged reform to build credibility in the system, protect retail depositors, and gradually bring Georgia closer to EU regulatory norms. Georgia only introduced a deposit insurance in 2018 and it was specifically designed as a phased system: starting with a low ceiling (5,000 GEL), then gradually raising it in steps (15k → 30k → now 50k) to allow banks, regulators, and the insurance fund to build capacity.

Each increase has been positioned as part of a long-term plan to converge toward international norms (EU Directive requires Euro 100,000 coverage in the long run). It also reflects the country's desire to signal robustness and proactive supervision - strengthening the narrative of Georgia as the region's most stable and best-regulated banking market.

Question:

What will the CPI impact be if Hungary is to stop using Russian oil. Does the EC's offer to wean make this more limited?

The question was asked in relation to the following story: Orban, Trump discuss energy security

Answer:

the one thing to remember is that Hungary has actually increased its dependence on Russian energy since Russia launched its attack of Ukraine. Thus, it is not so much there is no economically possible way to do so -- Bulgaria has been successful in this, as has the Czech Republic -- but the political will.

The Centre for Research on Energy and Clean Air published a report on this in May and notes technically Hungary can do so. That report also casts doubt on the fact Hungary or Slovakia receive a major discount. Or, it is possible that the Russian oil, at least, can be received by Hungary for a discount, but it also notes this discount isn't always passed on to consumers and instead accrues to MOL. It noted that in 2024 despite a Russian crude discount of 20%, petrol and diesel prices in Hungary were actually 5% above the EU average. It also notes that fuel prices in Slovakia have been lower than the EU average, but the gap was just 2.4% in 2024.

One other thing to keep in mind is that EU members have to prepare reports by end-2025 on how they will stop using Russian energy by 2027. Those documents could shed more light on the issue.

Question:

How does the gold purchase mirroring scheme work and when was it implemented? How much has the NBK sold under the scheme so far?

The question was asked in relation to the following story: NBK sees FX sales from sovereign fund at USD 600-700mn in October

Answer:

The NBK makes FX sales to mirror its purchases of gold from local producers. The bank first received a 'priority right' to buy gold domestically in 2012. The measure was aimed at expanding its reserves to ensure a stable buffer in case of sudden shocks. Essentially, these purchases require additional KZT issuance, which expands the monetary base and ultimately acts as an inflationary factor.

In the context of ongoing exchange rate / inflationary pressures, the NBK was forced to look for a more neutral strategy, hence the decision to sell FX from its reserves alongside the gold purchases. As a whole, the bank's efforts to enhance inflation management have mostly focused on liquidity withdrawal. It already employs deposit auctions and note issuance to this aim. Yet, the gold purchases were a virtual counterbalance due to the associated increase in liquidity, so it introduced the new scheme.

The mirroring sales began this January. Over Jan-Sep, sales amounted to KZT 1.96tn. The annual plan is to use KZT 3.3-3.6tn as part of the scheme, which is why Q4 sales are projected at KZT 1.4tn in total.

Question:

Does the heating voucher approved enter into the CPI? If so, by how much should it offset heating price increase? On the extension of the electricity cap, it was extended only for households, right? So how much of the 0.6-0.7pp CPI impact the NBP was forecasting if the cap was not extended should actually happen (assuming power prices unchanged)?

The question was asked in relation to the following story: President signs into law extension of power price cap through Q4

Answer:

The heating voucher will come via cash payments made in 2026 in two tranches that are meant to compensate about 400,000 lower-income households for the rise they will see in heating prices. That means the heating prices will still rise. It is very hard to know how much they will rise, but heating prices were capped for some time and perhaps something like an addition of 0.3-0.5pp to inflation will be coming. We shall see.

As for the power cap, yes, this is only for household prices and is only for the power portion of bills themselves. Bills also carry a distribution tariff that is unregulated and taxes and fees and such. As for the impact, there should be no rise in Q4. NBP head Glapinski estimated the 0.7pp or so inflation impact based only on the prospective rise of household power prices from the cap of PLN 500/MWh to the previous tariff of PLN 623/MWh. But with the PLN 500/MWh cap having been signed into law for Q4, there will be no such rise and so no impact on headline inflation. There is no cap for 2026, so we shall see what happens then.

One thing to keep in mind is that not all households are subject to power price regulation. If one change operators, then one's price is subject to the market (as in the Polish Energy Exchange (TGE)). Consumers can also choose dynamic pricing.

Question:

Is there an English version available of the 2026-28 debt management strategy? Could you also comment on what the main changes/points are in the government's updated debt management strategy that we should be aware of? Is there any comment within the document on potential Euro/Dollar bond issuance and expected size for 2025-28?

The question was asked in relation to the following story: Borrowing coverage hits 100% for 2025 - FinMin

Answer:

The English version isn't published yet. When it is, it will be published here: https://www.gov.pl/web/finance/debt-management-strategies. I usually go off the Polish version and so am not sure how quickly they publish it, though I imagine it will be fairly soon.

I am just finishing my story, but the main takeaway is that the government now expects the adjusted public debt measure used to discern whether the public debt safety thresholds are crossed shows them being crossed in 2028, and nearly in 2027. That would trigger a forced fiscal consolidation program that would be painful indeed. The question is what doe the FinMin/govt do with this forecast? It might just hold off and that would make the next general election -- due in autumn 2027 -- very much about fiscal plans.

There are no comments on euro or dollar issuance plans for the coming years. The latest update for the total in PLN of gross foreign issuance this year is PLN 56.2bn from the 2026 budget details. That compares with the PLN 47.7bn raised already. This would suggest slight more issuance to come this year. The gross foreign issuance plan for 2026 is PLN 48.6bn, so in fact slightly lower than this year.

Question:

The PLN 255bn figure suggests, as you point out, that there would be potentially a huge amount of funding supplied in 2026. Could you share how likely you think this is, what this hinges on and potentially where it would be deployed?

The question was asked in relation to the following story: Ministry now expects next RRF tranche of PLN 26bn by end-November

Answer:

One addition to this story is that the government is moving to reduce the RRF loan total by PLN 21.7bn and that will help reduce financing needs because for the loan part of the RRF program, it has to take out loans that it then pays back when it receives the tranches from the EU, which come with a delay. This could mean the de facto gross financing total is below the PLN 690bn and perhaps by the full PLN 22bn or so.

The government usually pre-finances 20-40% of its next year's financing target in the previous year and so I think the pre-financing total will be at least 25-35%. I'm not sure if it will be higher, though, since that would mean fairly heavy issuance. But I'm also not sure about the FinMin's thinking. If, for instance, the FinMin is actually scared of a sovereign rating downgrade, say, next year, perhaps it will want to borrow more this year. We shall see.

In the financing plans for 2026 (which you can see at the bottom of the story here), the FinMin sees some PLN 462.7bn in gross domestic financing (PLN 323.4bn for bonds, PLN 58.1bn for T-bills, and PLN 81.2bn for savings bonds) and PLN 48.6bn in T-bond issuance abroad. That marks the brunt of the financing. There are loans as well.

In the end, it looks like the FinMin will target about PLN 20bn more in T-bonds, but PLN 30bn more in T-bills, suggesting more action on the short end. The savings bond total is to rise some PLN 10bn, so that is important too.

Question:

What are your expectations for when the electricity price cap might be removed?

The question was asked in relation to the following story: President signs into law extension of power price cap through Q4

Answer:

I think that the government does not want to have a power price cap for households for 2026, and so it could be removed at the end of the year. The finance minister and the energy minister have both said in recent weeks [our story here] that the wholesale power prices on the Polish Energy Exchange (TGE) are low enough that a cap shouldn't be needed. The new head of the Energy Regulatory Office (URE) said more recently [story here] that though the power tariff itself could fall for 2026, the power distribution tariff might rise, meaning no change from PLN 500/MWh.

The government laid out in mid-September its priorities for the next two years until the general election set for autumn 2027 [story here] and said that the power price would not rise above PLN 500/MWh. It did not explain this further, but this does suggest that if there were any negative surprises in terms of electricity prices, it could impose some sort of cap again. But my expectation for now is that there will be no cap in 2026, though that is not set in stone and if the tariff is lining up to be above PLN 500/MWh, one can definitely not rule out the maintenance of the PLN 500/MWh frozen price.

Question:

I have heard about the existence of a heating price cap which apparently was in place for some time but expired this summer. Could you please give more details about what this price cap was all about? When did it exactly expire and is that the main reason why there is an expected acceleration in CPI?

The question was asked in relation to the following story: CPI inflation revised up to 2.9% y/y in Aug

Answer:

The original Anti-Inflation Shield capped the gains district (or system) heating prices could rise in 2023. For H2 2024, the maximum increase was put at 15%, and then there was another 15% for H1 2025. Thus, the cap was lifted at the end of June 2025, and now companies can submit motions for higher tariffs. The problem is that the sector is very dispersed. Not only are there many different types of heating (i.e., system heating, but that based on coal-fired furnaces, electricity-run ones, gas ones, boilers), a large variety of companies seek tariffs, and thus it is very hard to track.

But considering heating prices have been capped for some time, and costs have risen in the meantime, some customers are expected to face higher heating prices for the H2 2025 heating season. The gains could be like 80-90% for some clients. That is in part why the government launched a so-called heating voucher system, which will pay some 400,000 low-income households cash in two tranches in 2026. This will of course do nothing to stop the inflation impact, though, as noted, it is difficult to estimate.

As for the CPI forecast, the expectation for a heating price rise was one of the main reasons the consensus believed CPI would tick up to 3.0% y/y in September from 2.9% in August, but in the event it was flat. The details released showed energy prices only edging up to 2.4% y/y from 2.3% in August and that doesn't suggest heating exerted a big impact. However, this impact is still awaited. But as noted above, the heating sector is very diverse and it is not always easy to forecast just how much heating energy prices will rise.

Question:

Do you have the details of the 2026 financing bills where the EU funds reported in the table are shown?

The question was asked in relation to the following story: List of RRF and Cohesion flows

Answer:

The road to this information is long and winding, so bear with me. There is also no English version.

The first link to click is here. That will take you to a page with the budget documents that were sent for the so-called social consultations. Once there, please click Uzasadnienie ("Justification"). Once you open that pdf, please navigate down to Pg 313, and there you will find "Rozdział X - Budżet środków europejskich, which is "Chapter X - European Funds Budget." The paragraph there is where I got the data from.

If you want the 2025 data, one would similarly need to go to the same chapter of the "Justification" document. The link to that document is here, and the page number needed is Pg 310.

Question:

From your prior Q&A: "This shows regular EU fund inflows of EUR 9.04bn to end-July, giving about PLN 38.5bn. No RRF funds have flown in yet this year (there was a EUR 9.4bn last December) but there is to be a PLN 28bn flow in October." Can you please explain how come there were no fund inflows 'in yet this year' but we see the PLN 38.5bn in July?

The question was asked in relation to the following story: List of RRF and Cohesion flows

Answer:

There are two different main streams of EU money: the regular EU money as part of the Structural Funds and Cohesions Funds as well as the RRF money. There have yet been no RRF inflows this year, though one is expected in the next six weeks or so. But regular EU funds are still flowing in, and that total was EUR 9.04bn to end-July. There should be an updated report within the next 10 or so days with the end-August figures.

Question: Is there any information in the revised budget about FX bond issuance plans for this year, or could we expect an updated financing plan?

The question was asked in relation to the following story: Finance ministry publishes budget revision draft with 8.4%-of-GDP gap in 2025

Answer: The budget revision doesn't include any mention of additional foreign bond issuance this year or adjustments to the gross financing needs. However, given the upward revision of the budget deficit, financing needs will inevitably be adjusted. Regarding foreign bonds, Treasury head Stefan Nanu he considered new issues, including Samurai bonds, by the end of 2025. While he did not specify the amount, he confirmed intentions to buy back bonds maturing in 2026.

The revised deficit forecast adds RON 25bn (EUR 5bn) to the current gross financing needs, which stand at EUR 46.4bn and are already about 90% covered. This leaves approximately EUR 5bn to be financed by the end of 2025, through domestic and/or external sources. The planned bond buyback could require up to EUR 4.25bn, which is the value of three Eurobonds maturing in 2026.

We have two articles about Nanu's statements, one published in July and another one in September.

Question: Is there is any explanation from the government regarding why the VAT income is lower than expected, despite the increase in VAT rates in August - that would be super helpful please.

The question was asked in relation to the following story: Finance ministry publishes budget revision draft with 8.4%-of-GDP gap in 2025

Answer: The explanatory note of the revision states: "The lower revenue forecast from VAT is due to smaller-than-projected collected revenue from VAT so far, which was partly offset by the VAT rate hike." In our view, the most likely explanation is that the initial budget plan assumed a 2.1pps contribution to GDP growth from private consumption, which has now been revised down to just 0.4pps. You can find details on all revisions of main contributors in this article.

Question: What's the impact of the second set of measures on 2025 and 2026 budget? Am I right in saying its quite small relative to the first batch of measures and thus if we know the coalition won't be breaking up anytime soon, the decision of the constitutional court is less relevant?

The question was asked in relation to the following story: Regional governments reform to be included in next set of measures

Answer: The fiscal impact of the second set of fiscal measures (the five bills challenged at the Constitutional Court) is RON 10.6bn (0.56% of GDP) in 2025. By comparison, the first set of measures is projected to generate a fiscal impact of RON 10.75 billion (0.57% of projected GDP) in 2025 and RON 92.6 billion (4.48% of projected GDP) in 2026. The impact of the second set in 2026 is not yet available. You can read details about them here and here.

While we don't consider the CCR's decision on these reforms to be particularly relevant for government stability, it does carry weight for future reform efforts. A negative ruling would set a precedent that could hinder the implementation of similar measures - especially those targeting special pension schemes for other categories.

Question:

Can you share the QNB study?

The question was asked in relation to the following story: New vehicle sales are up by 25.7% y/y in September - ODMD

Answer:

Unfortunately, the report is not publicly available, and analysis and figures are only shared as a summary at various media links, just like the one we embedded into the relevant story. Having said that, the owner of the study has a column in the local daily, which can be accessed through this link.

Question:

Why is the government intervening the spot FX market if the exchange rate is still within the currency band? Why does the government operate with forwards? Why is the gap between official and parallel exchange rates growing? Do the parallel exchange rates reflect devaluation expectations?

The question was asked in relation to the following story: Treasury believed to have sold nearly USD 500mn on spot FX market, fuels concern

Answer:

1) Why is the government intervening the spot FX market if the exchange rate is still within the currency band?

From a rules standpoint, the currency band applies to the central bank (BCRA) and the one who is selling within the band is the Treasury, so the government will say that it is not breaking the rules.

The decision to have the Treasury sell inside the band is tactical and has two main elements to consider. The first element is that the consolidated public sector's liquidity is low, and it is split between Treasury USD deposits (USD 2.4bn as of Sep 29) and the BCRA's reserves. The government clearly sees the Treasury's deposits as the first tool to use to try to tame the FX market, while the BCRA defending the ceiling of the currency band is seen as the last line of defense. The reason for this difference is that when the Treasury sells USD, officials can claim that they are only using the product of their fiscal surplus (technically not true), which somehow makes it okay. When the BCRA is selling USD, it is selling USD borrowed from the IMF, so there is more space for the narrative that the government is indebting the country to defend an arbitrary exchange rate.

The above would explain why authorities would want the Treasury to sell before the BCRA, but not necessarily why the Treasury would sell within the band. This is where the second element behind the tactical decision comes in. The policy team's thesis is that if the exchange rate gets to the ceiling of the currency band, the sense of impending doom will take over markets and all non-official supply will disappear from the FX market, while speculative demand will spike. If the government supports the exchange rate within the band, it will be showing more strength, and market dynamics can be better in general. Also, defending an exchange rate within the band supports the idea that the currency can move up and down, which in theory would help limit the pass through to inflation compared to the scenario in which the exchange rate lives at the ceiling of the currency band.

Just in case, we believe the government's strategy is not sound, and the share of the market that believes the government is just wasting USD is growing.

2) Why does the government operate with forwards?

It's just one of the three tools they have to control the exchange rate and demand for USD in the spot market: a) spot intervention // b) currency forwards intervention // c) USD-linked Treasury note issuance.

Since liquidity for spot intervention is low and restricted, the government relies on forwards a lot. The basic idea is that if you offer cheap coverage through forwards, demand for USD spot declines today, which is all they care about. By pushing forwards down, you also help push down breakeven rates, which in theory would also increase demand for peso instruments vis-à-vis USD spot.

3) Why is the gap between official and parallel exchange rates growing?

The government re-introduced restrictions to participation in the official market and restrictions for cross-operations between the official and parallel exchange rates. The restrictions to demand for official USD increases demand in the parallel market. The restrictions to operate in both markets means the gap between exchange rates can't be fully arbitraged.

4) Do the parallel exchange rates reflect devaluation expectations?

The parallel exchange rates are an okay gauge of where a free exchange rate would be, but there is so much noise right now that it is hard to be confident with that. Usually, a free exchange rate tends to be at least slightly stronger than the parallel exchange rate, because a convertible currency is always worth more than a non-convertible currency. That argument alone entails that a free exchange rate today would sit close to where parallel exchange rates are today. However, the government is selling significant sums in the official market, and there is at least some arbitrage pulling the parallel exchange rates down, and this noise makes it hard to estimate where a floating exchange rate would be. If you rely on other asset prices to estimate where a floating exchange rate would be, you get a wide range of different values, again because with the current noise and restrictions there is no complete arbitrage.

Question:

How can we monitor if the BCRA is selling within the band? Any official source mentioning BCRA selling today?

The question was asked in relation to the following story: Govt seen selling USD again to prevent depreciation within currency band

Answer:

Our reporting in that article is sourced from traders who infer from the live transactions on the spot trading platform.

If we are talking about the spot FX market, we don't know 100% for sure if it is the BCRA during the trading day, but we can infer with high confidence given the volume on offer and prices involved. Today we had 5% intraday depreciation at one point, and suddenly considerable USD supply appeared directly at a price that erased most of that depreciation.

If the BCRA sells of its own resources, you usually get full confirmation of the amount when it publishes a table with five key variables at the end of the trading day on its X account. An example here. For a proper series on Excel, there is the daily report that has daily monetary information with a publishing lag of 3-4 days.

In this case, the BCRA has explicitly said it won't intervene unless the exchange rate depreciates to the ceiling of the currency band. Considering this, we can infer that the BCRA's interventions are on account of the Treasury. When this happens, there is usually no official information indicating exactly how much was sold or bought. We can estimate from the live transactions, and then we can complete that estimate based on the evolution of the Treasury's USD deposits, which come out with a lag of 3-4 days as well.

Question:

My understanding of the TRS is that the banks hold the bonds risk-free, so if the bonds decline in value (the republic makes up the difference). If the bonds increase in value, that difference benefits the republic. Essentially, the republic is betting on improved fiscal and bond performance, not against it. We agree on confidentiality issues, but they are not wagering against their own fiscal policies.

The question was asked in relation to the following story: FinMin's USD 9.3bn total-return swap may be create surprising risks

Answer:

A plain-vanilla total return swap would allow the Republic to benefit from bond appreciation, while the downside is covered by the upfront cash and liability to the bank. However, Colombia's current TRS is structured so that the government's future payments to banks directly depend on the performance of its own international bonds. If those bonds rally (e.g., due to economic recovery or fiscal improvement), the Republic ends up owing much more to the banks, thereby turning positive fiscal developments into larger contingent liabilities. If Colombia's credit weakens and the bonds fall, all else equal, the payout decreases, which means the government's risk exposure is inversely tied to its own credit trajectory.

From the official offer prospectus released by the bank consortium on Aug 27, one can see the TRS actual structure discussed in the story. The key paragraph states: "The Purchasers are making the Offer to acquire Existing Bonds to hedge potential obligations under certain total return swap transactions... It is expected that... they will be settled at maturity through delivery by the Purchasers of Existing Bonds... to the Republic."

Therefore, we understand that banks purchase bonds to hedge their side of the TRS, and these bonds will be returned to the Republic at maturity. This matches the structure where the Republic receives upfront cash and agrees to pay the total return to the banks over the duration of the swap. So, the intuition to question the swap's structure is spot-on: it's a complex structure. The official docs confirm that the Republic's liabilities rise if bonds strengthen and fall if they weaken, tying fiscal costs inversely to its own credit trajectory.

While the Republic isn't definitively "hoping" for decline, the structure makes recovery fiscally more costly, with liabilities increasing in good times and easing in bad ones. Overall, the lack of transparency regarding specific terms complicates risk analysis for public finances, as illustrated in the story. That's the subtlety behind our caution: it's unconventional and might create incentives that aren't fully aligned with policy goals.

Question:

What is the scale (both geographical and in terms of people/organizations involved) of the protests so far, and how do they compare to 2022? - Are protests escalating/growing?.

The question was asked in relation to the following story: Govt says it won't negotiate or back down from ending diesel subsidies

Answer:

The protests are mostly concentrated in the province of Imbabura (northern region), mainly in the cities of Otavalo and Cotacachi. Some protests were reported in the provinces of Cotopaxi (North), Pichincha (North), Bolívar (Center), Chimborazo (Northeast) and Cañar (Center-South). These regions represent less than a sixth of the country's territory but nearly a third of its population. However, we note protests in Quito (Pichincha's largest city) have not been massive; thus, it would be wrong to consider that a third of the population lives in regions gravely affected by the protests, considering they are mostly contained in the north of the country.

The confederation is adhering small local indigenous movements, including the Provincial Union of Cañari Communes and Cooperatives (UPCCC) and the Kichwa Nationality Organization of Sucumbios.

The CONAIE has organized the protests in 2019, 2022, and 2025, but the most radical and violent demonstrations were registered in 2019. This time around, an indigenous protester died over the weekend, while the government reports that 17 soldiers have been kidnapped. Also, a humanitarian convoy led by President Daniel Noboa was attacked Sun. night with Molotov cocktails in Imbabura.

The fact protests are contained to the north of the country compares positively to protests seen in 2019 and 2022, in our view. Protests in the previous movements were rather widespread, with big demonstrations in Quito and roadblocks in the north and the Amazonia. Moreover, although the government is using the military force and accuses some protesters of terrorism, we believe violence has been rather contained in recent demonstrations vis a vis the violence seen in 2019 and 2022.

Although we cannot rule out a more widespread movement ahead and considering violence could certainly escalate in the short term, we believe ongoing protests are of a more modest scale than those seen in 2019 and 2022. This gives hope to believing the government in saying it will not walk back the end of the diesel subsidy, in our view.

Question:

Where is this article or news on Egypt IMF program from?

The question was asked in relation to the following story: IMF open to postponing state divestment program to 2026 - IMF's Georgieva

Answer:

The core of the article is based on this report by Sada Elbalad English. The last paragraph, which covers the comments by the IMF spokesperson, is based on this transcript provided by the IMF. If you are watching the IMF video, the Q&As on Egypt begin at around the 28th minute.

I guess the question is really about Georgieva's comments. According to Sada Elbalad, she gave the interview to Bloomberg on the sidelines of a regional economic summit in Kuwait. However, no such report appears on their website, nor has any local newspaper picked up the news yet. While the latter could be attributed to Friday being a non-business day in Egypt, the former does raise some concerns about the source of this report. At this point, I don't think it's a fake news and I expect that more details will emerge on Sunday, the first business day of the week. This is not the first time Sada Elbalad published something that sounds a bit fabricated, but a few days later, it turns out to be true.

Question:

What are the prospects for an early election? Would Netanyahu probably lose this? And if so, to who - a more market friendly candidate possible?

Answer:

I have the feeling that the idea of early elections is always an option in Israel. I think that the possibility of an early election currently is mainly linked to a potential failure to pass a budget for 2026, which should happen by the end of March. Media reported that there is some preparation, but the politicians are not in a hurry to pass a budget and there is no budget commissioner to push for the process to advance. In such case, the estimates are that an early elections might be held in Jun-Jul while the regular ones are scheduled for October. Of course, there are threats from junior riling partners to resign and the Haredi parties actually did resign but they are still supporting the government. The other two remaining junior coalition partners, Religious Zionism and Otzma, threaten to resign in case of ending the war but I do not think that they will actually bring about a collapse of the government as neither of the coalition partners is expected to return to the ruling.

Netanyahu's Likud is expected to win the elections, as all recent polls indicate (link to the last from this morning) but it would not find partners to establish a government. Thus, the most likely scenario is a government consisting of the parties currently in opposition, most likely led by Naftali Bennett as a PM, I think. This means another rightist government, but definitely not as extreme as this one. Bennet has not revealed much of his plans and the estimates are that he has not done it to maintain the support for his party.

The question was asked in relation to the following story: Smotrich opposes Trump's Gaza plan

Question:

According to the Press Mood for Oct 2, 2025: Saudis seek feedback on plan to open stock market to foreigners (AGBI)

Do you see any read-across for the potential foreign ownership changes that were mentioned in the recent Bloomberg article?

The question was asked in relation to the following story: Press Mood of the Day

Answer:

These consultations aim to ease the rules for trading on the main market and are not directly related to the expected changes in the foreign ownership rules. However, they are part of this broader push to attract more foreign capital, and I am not sure if lifting the cap on foreign ownership (currently at 49%) would make sense if the rules on trading were not revised before that.

You can check the Draft that was published by the local bourse yesterday. Article 6 (page 3) deals with the changes in the Investment Restrictions and there are clear explanations for why they think the rules should be changed. As you can see, the proposed amendments keep the current foreign ownership caps (49% total ownership, 10% cap on individual investment) and focus on other rules.

Question:

Where in the financial system are reserves parked, how and at what rate are they remunerated, and does rising reserves have any implications for banking system liquidity? Thank you.

The question was asked in relation to the following story: FX reserves rise 2.8% m/m to USD 457bn as of end-August

Answer:

This is a very interesting question. A large chunk of SAMA's foreign assets is invested in foreign securities (accounting for about 58% of total reserves) and foreign currencies and deposits (around 37%), which should explain why the movement in NFAs has a rather muted impact on money supply. The categories that make up the Foreign Assets of SAMA hold relatively stable, except for the foreign currencies, which are quite volatile because of the quarterly dividend payments by Saudi Aramco. Overall, foreign assets have remained relatively stable, though, averaging USD 447bn in Jan-Aug 2025, USD 451bn in 2024, and USD 438bn in 2023.

While SAMA does not disclose exact remuneration rates, we think we can get a rough estimate based on the large portion of US securities in SAMA's portfolio. According to the US Treasury, Saudi Arabia held USD 132bn worth of US treasuries as of end-July, so the return on these investments should be around 4-5%. We would assume the average return on SAMA's foreign assets is somewhere in the 3-4% range. That's an interesting issue, and we will look further into it in the coming days.

There has been some volatility in the interbank market over the past two years (we cover the interbank offer rates on monthly basis, here is our article for July), but the main reason is the tight domestic liquidity because of a double-digit credit growth and slower growth in the deposit base. According to the IMF, SAMA has injected liquidity, but the demand for loans and trade finance activity remains quite strong, hence liquidity remains tight. The ratio of Bank claims on the private sector to Total deposits was 106.8% as of end August 2025 and this ratio has been above 100% since Q3 2023.

In the latest IMF Article IV report there is a section on the liquidity condition in Saudi Arabia (page 23). There is a chart on page 24 that shows the contribution from NDA and NFA on M3, and you can see that the impact of changes in NFAs has been rather weak since 2021.

Question:

What is the amount hold by non-residents investors of these instruments (by instrument or on aggregate)? Where I can get that information?

The question was asked in relation to the following story: CBN sells NGN 272.5bn one-year T-bills

Answer:

Nigeria does not publish data on non-resident holdings either in aggregate or by instrument. But according to World Bank estimates in this data, debt securities held by nonresidents in Nigeria were reported at approximately USD 14.08bn in Q2 2024. For older data, the IMF published a working paper in 2020 on "Non-Resident Holdings of Domestic Debt in Nigeria" that is based on data from 2007 to 2019, but the source for the data is IMF staff calculations which further indicates this information is simply not available.

Question:

I understand that this year the state budget reflects most of the non-oil revenue increase but I only see federal budget headline numbers on a monthly basis. Would you be able to help how to monitor the overall fiscal operations?

The question was asked in relation to the following story: NNPC reports heavy losses during PENGASSAN strike

Answer:

There are a few different sources from where you can pull useful information, but in general Nigeria is not providing timely detailed fiscal data. The CBN publishes a statistical bulletin with historical fiscal data (latest Q4 2024), which they update here. The sheet "B1" contains oil and non-oil revenues on monthly basis, gross and net.

The Federation Accounts Allocation Committee (FAAC) monthly reports indicate revenue sharing from the Federation Account (oil and some non-oil revenues) among the federal, state and local governments. You can find FAAC reports here. The central bank publishes monthly Economic Reports that have a section on fiscal operations. This provides a more analytical breakdown of federally-collected revenue, expenditure and financing. The latest one is for May 2025. You can also have a look at the Federal Inland Revenue Agency which publishes quarterly reports that show some of the non-oil tax revenues at federation level (latest 2024).

Question:

Can I please have a link to the the gross financing amount (domestic) for Nigeria for this financial year?

The question was asked in relation to the following story: New external financing plan does not mean immediate debt rise - FinMin

Answer:

The FG plans domestic borrowings of NGN 7.4tn in 2025 (and NGN 1.8tn in foreign borrowings) to plug a budget deficit of NGN 13.1tn. This can be found in the 2025 MTEF on page 41 of 70 (here). Please note that since the publishing of the framework, the president increased the budget from NGN 47.9tn to NGN 54.9tn, which we covered here. However, the government did not publish an updated MTEF.

Question:

Do you know what would/could happen for banks which fail to meet recapitalisation requirements in time for the CBN deadline?

The question was asked in relation to the following story: Recapitalisation deadline puts pressure on tier-2 banks - report

Answer:

The CBN said it will be taking regulatory action against banks that don't meet the deadline. This may possibly include more monitoring, increased oversight and sanctions. Based on the CBN's framework and past recapitalization exercises (2004-2005 as well as 2009), non-compliant banks could face forced mergers or acquisitions with stronger institutions, license downgrades or revocations, or regulatory penalties such as fines or operational restrictions. Some local analysts also think temporary forbearance may be granted if a bank showed genuine efforts to raise capital. The exact actions will depend on the specific circumstances of each bank and the CBN's assessment.

Question:

Hello, I am having trouble understanding whether US trade tariffs imposed on April 9 already include AGOA-qualified goods or whether those AGOA goods have been exempted from tariffs thus far. By that, I am trying to understand whether the end of AGOA on September 30 (if not renewed) is going to be another blow in the short term for African exports. Because, if AGOA-qualified goods were already imposed tariffs from April 9 thus far, there is no reason to expect a new drop in African exports in the short term, am I correct?

The question was asked in relation to the following story: AGOA set to expire end-September amid talks of temporary extension

Answer:

The trade policies are very confusing indeed as they have become very complex. For instance, the automotive industry believed at one point that it was subject to 30% on top of 25% imposed earlier in April. However, the non-stacking rule clarified that only the 30% tariff applies.

At this stage there is a reciprocal tariff on all goods (with exemptions) exported by South Africa to the US. This includes 6,000 products that benefit (or used to benefit) under AGOA. The 30% tariff became effective on Aug 7. Prior to that, a 10% reciprocal tariff was announced in April and became effective on Jul 9. The tariff (Section 232) on automotive exports was set at 25% and was effective between April and Aug 7. Automotive exports to the US dropped as a result, while the exports of citrus increased to take advantage of the lower tariff ahead of Aug 7. There could be some additional downside pressure on exports in August as well.

AGOA mostly benefits automotive, fresh fruit and minerals exports. The automotive sector was charged 25% as of April. The rest of AGOA products must have been charged 30% as of Aug 7.

Significantly, most of the minerals products, which is the main South African export to the US, are exempt from the tariffs. The minerals exemption remains in place for now with or without the extension of the AGOA. The AGOA extension seems very unlikely at least for South Africa, in my view.

Question:

How is it possible that FX reserves rose to all time highs, but the RBI bought dollars only once i.e. in May (and by implication a seller in most other months, including large sales in Q1). Only valuations cannot be blamed - as even on a 30% EUR book, and 10% gains, only 20bn can be explained on valuations.

Answer:

The RBI was a net seller in April (USD 1.9bn), June (USD 3.6bn) and July (USD 2.5bn), intervening to curb rupee volatility. It was only a net buyer once, in May. Yet, India's reserves rose from USD 676bn in April to USD 698bn by July, close to the all-time high (USD 703bn), showing that spot dollar flows were not the decisive driver. The bulk of the rise came from valuation and composition effects. Gold reserves increased from USD 79.3bn in April to USD 85.7bn in July, as prices surged. Non-dollar assets - euro, yen and sterling holdings - also gained in value as the USD weakened, boosting reserve totals beyond what can be explained by spot flows alone.

At the same time, loan inflows and government borrowing is expected to have added about USD 6.4bn over this period, further padding reserves even as the RBI was intervening on the sell side. On the RBI's side, the forward book (net short position) shrank by USD 2.5bn in July, mechanically supporting gross reserves by reducing future dollar outflows. IMF SDR allocations and non-deliverable forward (NDF) interventions also contributed, even if not always reflected immediately in the spot numbers.

So the reconciliation is: despite active spot sales by the RBI, reserves climbed because of (1) gold and valuation gains, (2) government borrowing inflows, (3) strategic forward market management, and (4) technical additions such as SDRs and NDF activity.

The question was asked in relation to the following story: RBI remains net seller of US dollars in July

Question:

You mention that ''The rebound was led by food inflation, which stood at -0.69%, narrowing from -1.76% in July. Prices of vegetables, meat and fish, oils and fats, and eggs contributed to the rise. Rural food inflation moved up to -0.70% (from -1.74% in July), while urban food inflation rose to -0.58% (from -1.90%)''. By looking at the table in the same piece, I see different figures for food inflation in August and July. What am I missing?

Answer:

The numbers in the text and the table don't match because they're referring to different cuts of the data. The figures quoted in the text are from the Consumer Food Price Index (CFPI), which tracks food prices separately. By contrast, the table you're looking at shows the broader Food & Beverages sub-index within the overall CPI basket.

The question was asked in relation to the following story: CPI inflation rises to 2.07% y/y in August