TFG Weekly Trade Briefing, 30th March 2020

Your Monday morning coffee briefing from TFG. Here are some of the last week’s updates from the trade sector. The corona mayhem continues, and the focus is now on ensuring countries have free flow of medical supplies, equipment and goods, with the support of global development banks and multilaterals calling for coordinated global response to the crisis.

Battle against COVID-19 continues

Global cases of COVID-19 rose to over 710,000 and deaths to over 33,500. The UK ordered the public to stay at home for three weeks, except for basic necessities and essential work, and all non-essential businesses closed. China eased travel restrictions in Hubei province while India and Pakistan began nationwide lockdowns. The current crisis has revealed unforeseen weaknesses in food supply chains, medical supplies, healthcare provision and many other areas.

WTO welcomes G20 pledge on COVID-19 response and economic recovery

WTO Director-General Roberto Azevêdo took part in an extraordinary G20 virtual leaders’ summit on COVID-19. He welcomed the pledge by the Group of 20 major economies to work together to combat the COVID-19 pandemic and “restore confidence, preserve financial stability, revive growth and recover stronger.” Read more →

Coronavirus hits GBP hard

Unexpected and unpredictable, COVID-19 has already made a huge impact on global economies and markets, including the currency market. It’s safe to say that the pound has been overwhelmed by the coronavirus crisis, falling to a 35 year low against the dollar and performing weakly against the euro. Because the UK has a larger trade deficit than, say, the Eurozone, the mechanics are such that the pound will tend to fall by more than other currencies, such as the Euro or Swiss Franc, in times of crisis. Read more →

ICC has issued a 10-point plan for G20 trade ministers to speed response to COVID-19

In an open letter, John W.H. Denton AO, Secretary General of the International Chamber of Commerce (ICC), has urged G20 trade ministers to seize the opportunity to fully utilise trade policy tools to combat the COVID-19 pandemic and limit its economic effects. Read more →

Chancellor unveils rescue package for self-employed workers

Rishi Sunak, chancellor, has announced a £3bn-a-month package of support for up to 3.8m self-employed workers hit by the fallout of coronavirus, but higher earners making profits above £50,000 will lose out. The scheme will pay a cash grant worth 80% of average monthly trading profit over the past three years capped at £2,500 a month, benefiting 95% of people who receive the majority of their income from self employment. Read more →

World’s governments draft manufacturers to boost production of ventilators

Governments are drafting automakers and aerospace manufacturers to ramp up production of ventilators and other medical equipment to bolster what most experts say is an inadequate arsenal of coronavirus treatment tools. Automakers including Fiat, General Motors, Ford, Tesla and Nissan have committed resources to boost production of ventilators. Read more →

Basel III implementation deferred to increase the operational capacity of banks to respond to COVID-19

Bank for International Settlements – BIS has announced this deferral on Basel III implementation to provide additional operational capacity for banks and supervisors to respond to the immediate financial stability priorities resulting from the impact of the coronavirus disease (Covid-19) on the banking system. Read more →

Afreximbank Announces $3bn Facility to Cushion Impact of COVID-19

The African Export-Import Bank (Afreximbank) has announced a $3-billion facility, named Pandemic Trade Impact Mitigation Facility (PATIMFA), to help African countries deal with the economic and health impacts of the COVID-19 pandemic. PATIMFA, approved by the Bank’s Board of Directors during its sitting on 20 March, will provide financing to assist Afreximbank member countries to adjust in an orderly manner to the financial, economic and health services shocks caused by the COVID-19 pandemic, according to information released by the Bank. Read more →

OECD updates G20 summit on outlook for global economy

The OECD estimated that output in the developed world could be 20-30% lower than usual as result of business closures and people staying at home. The lockdown will directly affect sectors amounting to up to one third of GDP in the major economies. For each month of containment, there will be a loss of 2 percentage points in annual GDP growth. The tourism sector alone faces an output decrease as high as 70%. Read more →

TFG COVID-19 Hub Launched: Looking beyond COVID-19

Following on from last week’s Live Tradecast in partnership with ITFA, TFG have created it’s COVID-19 hub, featuring insights from a banking, trade credit insurance, fintech and legal perspective on the implications of coronavirus on the trade finance sector. Read more →

TFG launches interactive periodic table of DLT and Blockchain trade finance projects

TFG have created an interactive periodic table of projects, consortia, networks and companies in blockchain and DLT for trade finance. Read more →

Rubrics Asset Management Analyses the Side Effects of Global Monetary Policy

Rubrics Asset Management has recently issued a report exploring the side effects of recent global monetary policy. Titled ‘The Great Global Opioid Crisis’, the report compares current strategies with pain killers – something to mask the worst of the symptoms but which, crucially, do not heal the system. Until real structural change is made, current strategies will only ever work in the short-term, plugging a gap temporarily until eventually becoming ineffective. Read more