TFG Weekly Trade Briefing, 16th March 2020

Your Monday morning coffee briefing from TFG. Here are some of the last week’s updates from the trade sector. A vast easing of both fiscal and monetary policy in response to the COVID-19 impact were seen last week and over the course of the weekend. For the trade and supply chain finance community, keeping the lights on, continuing to provide support to businesses, and continuing to allow international trade has been critical.

Pandemic causes pandemonium

The WTO termed the COVID-19 outbreak as a pandemic last week, sending global financial markets into shock. Policy moves were mixed around the world, with many countries closing borders, slashing interest rates and implementing social isolation.

Services trade growth weakens as COVID-19 crisis hits global economy

World services trade growth continued to weaken toward the end of 2019 and into the first quarter of 2020 according to the WTO’s Services Trade Barometer, released on 11 March 2020. The latest reading of 96.8 is down from the 98.4 recorded last September and well below the baseline value of 100 for the index, suggesting below-trend growth in world services trade. Read more →

Several countries restrict exports of medical products

China, France, Germany and South Korea were amongst many countries banning the exports of certain medical equipment such as face masks in an attempt to put a protective ring around medical equipment, as the World Health Organization (WHO) warned that respirators and vital medical equipment supply would soon not be able to keep up with global demand. Read more →

Bank of England Eases Monetary Policy

The Bank of England has cut interest rates in an emergency move to bolster the economy during the coronavirus outbreak. The monetary policy committee voted unanimously to slash the bank rate from 0.75% to 0.25% at its first unscheduled meeting since the 2008 financial crisis as part of a coordinated package of measures alongside the chancellor Rishi Sunak’s budget. Read more →

ADB to Provide $200M to Support Strained Supply Chains

The Asian Development Bank (ADB) will make available $200 million through its supply chain finance Program for companies manufacturing and distributing medicines and other items needed to combat the Coronavirus. In ADB’s latest report, they suggest a global impact of $77 billion to $347 billion or 0.1% to 0.4% of global GDP, with a moderate case estimate of $156 billion or 0.2% of global GDP. Two-thirds of the impact falls on the PRC, where the outbreak has been concentrated so far. Read more →

Chancellor unveils permanent £5 bn boost to UKEF lending capacity

The Chancellor, Rishi Sunak, has significantly increased UK Export Finance (UKEF) direct lending facility to £8 billion, with £2 billion allocated for clean growth projects.

Through UKEF’s direct lending scheme, the government’s export credit agency provides overseas buyers of UK goods and services with financing support in the form of long-term, fixed-rate lending. Read more →

Global Factoring Industry Grows 5% to €2.9b in 2019

The first estimates for the factoring industry worldwide in 2019 have been announced today by the FCI Secretary General at BCR’s 20th Annual Receivables Finance International Convention (RFIX). The global figure gives a significant indication that the industry thrives with an upward trend, all continents individually contributing with their share. Compared with the previous year’s 2,767 billion euro, the 2019 estimated volume of 2,923 billion euro represents a growth of over 5%. Read more →

EBRD unveils €1bn emergency coronavirus package

The EBRD has unveiled an emergency €1 billion “Solidarity Package” of measures to help companies across its regions deal with the impact of the coronavirus pandemic. The proposals were approved today by shareholders of the Bank which invests to support the development especially of the private sector across 38 emerging economies. Read more →