Lecture by Lesetja Kganyago,
Governor of the South African Reserve Bank,
at the Wits School of Governance
Johannesburg
18 June 2020
The South African Reserve Bank, the coronavirus shock,
age of magic money'
and 'the
Good afternoon
It is now clear that the COVID-19 outbreak will produce the worst economic downturn
in a century. We expect that 'the great lockdown' will cause output to contract by
about
7% this year. The last time a figure of that magnitude appears in our data is 1931,
during the Great Depression, when output fell by 6.2%. It had declined by
6.1% in 1930.
The South African Reserve Bank (SARB) has responded flexibly, quickly and
aggressively to this crisis. So far, these actions have improved market functioning, and
are supporting economic activity. However, the larger economic outlook remains
uncertain. We are watching the data closely, and we are ready to act as appropriate,
in accordance with our mandate.
Fortunately, central bank governors tend to get a lot of advice, and I have been
particularly well-supplied with suggestions for SARB policy recently. Allow me to add
to the national public debate today.
I will cover four main points.
First, the bond-buying programmes fall on a spectrum, running from limited to larger
interventions. Conducting any of them successfully is made possible by our inflation-
targeting framework and the flexible approach we take to it.
Second, the scale of asset buying we do should follow from a clear sense of why
markets have been malfunctioning. I'll distinguish between liquidity and sustainability
problems. Central banks can provide liquidity, while challenges like fiscal sustainability
are best dealt with elsewhere.
Third, we need more clarity around the mechanics of central bank asset purchases,
quantitative easing (QE), and the 'zero These concepts are pretty hard
lower-bound'.
to understand. It is easy, for example, to take the mistaken view that QE is 'free
money'.
Finally, I will reflect on the utility of inflation targeting for addressing the current
economic conditions and potential depression-type conditions. The intellectual
heritage of inflation targeting traces back to the study of the Great Depression, so we
can say that depression fighting is 'in its genes'.
As a starting point, it is perhaps worth reviewing what we have done to date. Our five
most important measures have been as follows.
1. We have lowered interest rates. At the March meeting of the Monetary Policy
Committee (MPC), we reduced the repurchase rate (repo rate) by 100 basis
points. We then held an emergency MPC meeting in April, using new forecasts
that incorporated the lockdown, and cut the repo rate by another 100 basis
points. In May, we cut it by a further 50 basis points. Including our January cut,
the cumulative reduction in the repo rate for 2020 now stands at 275 basis
points.1 To compare, the emerging market median is 100 basis points.2 The
repo rate is now at its lowest level on record, and below zero in real terms.
2. We have made liquidity abundantly available to banks, through a range of
facilities in addition to our usual weekly repo auctions, with take-up peaking at
R83 billion in March.
3. We have provided regulatory relief to the financial sector, to help maintain the
flow of credit in the economy despite the temporary payment problems for firms
and households caused by the COVID-19 shock.3
4. We have offered funding for small and medium enterprises (SMEs), starting at
R100 billion, with an option to scale up to R200 billion over time, or about 4% of
gross domestic product (GDP). This facility is backstopped by a guarantee from
National Treasury.
5. We have been buying government bonds in the secondary market, to improve
market functioning. The total of new purchases now stands at around
R25 billion, which is an increase in our bond portfolio of about 0.6% of GDP
from pre-crisis levels. This is comparable to purchases by emerging market
peers.4
1
The cumulative reduction in the repo rate stands at 300 basis points since July 2019.
2
As of 4 June 2020, based on a sample of 66 emerging markets. Large cuts from high starting points,
as in Argentina (-1 200 basis points, from 50%), distort the mean change, making the median a better
representation of the central tendency of the data.
3
For details, see the Prudential Authority's 'Press release on regulatory relief measures and guidance
to the banking sector in response to COVID-19, published on 6 April 2020, available at
https://www.resbank.co.za/Lists/News%20and%20Publications/Attachments/9842/Prudential%20Auth
ority%20Media%20Release%20%20Regulatory%20relief%20and%20guidance%20to%20the%20banking%20sector.pdf.
4
The Bank for International Settlements (BIS) gives data for bond purchases by seven emerging
markets. Of these countries, four have purchased bonds worth 0.2% of GDP or less, Thailand is at
0.6% of GDP, Colombia at 0.8% of GDP and Chile at 2.8% of GDP (in Chile, the policy rate is now at
its 'technical minimum', according to MPC minutes).
The SARB's purchases to date, as of the latest
published data, are at 0.6% of GDP. See Yavus Arslan, Mathias Drehmanm and Boris Hofman,
2 June 2020, 'Central bank bond purchases in emerging market economies, Bank for International
Settlements Bulletin No. 20, available at https://www.bis.org/publ/bisbull20.pdf.
Of these interventions, it is the last one that has prompted the most discussion, so it
deserves extra attention.
A spectrum of bond buying
In responding to the COVID-19 crisis, a whole range of central banks, both in
advanced economies and in emerging markets, has launched bond-buying
programmes. These programmes should be thought of as sitting on a spectrum,
measured by what the various central banks are trying to do. Some are buying huge
quantities of assets to provide stimulus despite the constraint of the zero lower-bound.
Others are conducting more limited purchases, to improve market functioning. Many
advanced economies sit on the far side of the spectrum. Some emerging markets, like
Brazil, and us, sit at the near end: we are aiming to improve market functioning.5
Recognising this distinction, the Bank for International Settlements (BIS) has referred
to emerging market operations as 'Bond Purchase Programmes', or BPPs.6 Others
have put the term 'QE' in quotation marks, to convey the nuance. Sometimes I think
that if we just told people our asset purchases were QE, they might stop complaining
-
that 'the SARB is conservative' a criticism that has somehow survived despite
surprise at how much the SARB has already done. We should not, however, simply
assume that our conditions require full-blown QE, or that we can pull it off without
creating unintended and damaging consequences down the road.
Rather, any decision to move along the spectrum needs to be embedded in our
inflation-targeting framework. Getting the inflation forecast right gives us credibility to
shift along the bond-buying policy spectrum without tipping into higher inflation. If
inflation is collapsing and existing policy measures prove not enough to bring it back
to target, we can move further. Judging by the recent moderation in long-term rates
and lower inflation levels, it appears we have got the overall policy effort about right
5
2020, Financial
Bryan Harris, 8 June 'Brazil central bank chief resists using new QE powers', Times,
available at https://www.ft.com/content/e6eb0759-3a14-47ec-9835-a0b5d509b97c.
6
Yavus Arslan, Mathias Drehman and Boris Hofman, 2 June 2020, 'Central bank bond purchases in
emerging market economies', Bank for International Settlements Bulletin No. 20, available at
https://www.bis.org/publ/bisbull20.pdf.
for the moment. But we are in an environment of unprecedented uncertainty, and we
will adjust this policy effort, along that spectrum, as economic conditions and forecasts
change.
The South African Reserve Bank's bond purchases
When the SARB began intervening in the South African government bond market, on
20 March, we had seen trading thin out, with even small transactions causing bond
prices to move abruptly. By purchasing bonds in the secondary market, the SARB has
helped restart price discovery and has encouraged the re-entry of private sector
participants.
We continue to monitor the government bond market and to buy bonds where we
observe signs of stress at different maturities of the yield curve. This will continue as
needed to restore normal market functioning. Up to now, it appears our interventions
have worked. Volatility has subsided, and bond yields have largely normalised. While
we are not targeting yields specifically, the fact that the benchmark 10-year yield is
back to where it was in February suggests that stress in the system has eased.
We are not the only country experiencing liquidity problems in its bond market. Indeed,
at the height of the crisis, even the ultra-deep and liquid United States (US) Treasury
market was disrupted, which just goes to show that, in a major crisis, even the best
borrowers can have liquidity problems.7 Solving these problems is one of the oldest
duties of central banks; such practices are literally centuries older than the term
'quantitative easing'.
The trouble is that liquidity problems are not the only factor affecting the domestic
bond market. There are also problems of fiscal sustainability in the mix, which requires
us to act, and to communicate, with caution. We need to avoid what one expert has
7
2020,
Jeffrey Cheng, David Wessel and Joshua Younger, 1 May 'How did COVID-19 disrupt the
market for US Treasury debt?', available at
https://www.brookings.edu/blog/up-front/2020/05/01/howdid-covid-19-disrupt-the-market-for-u-s-treasury-debt/.
called 'the mother of all sudden stops'8
turning into a permanent, and specifically South
African, problem.
In general, I avoid commenting on fiscal issues, but it is difficult to discuss
sustainability without mentioning some fiscal facts. The most important ones are
these.
-
When the COVID-19 shock hit, South Africa was already running crisis-level deficits
over 6% of GDP in 2019. Our debt stock was on a rising trajectory.9 Unfortunately, the
coronavirus is now forcing an additional fiscal deterioration.
This has resulted in South Africa losing its last investment-grade credit rating. Market-
based measures of sovereign risk, such as credit default swaps, have deteriorated
further, both in absolute terms and relative to peers. This increase in sovereign risk
has, in turn, further raised the return on bonds asked by investors, shifting up long-
term rates for the whole economy, despite a very low repo rate.
As many economists have pointed out, sustainability concerns have to be addressed
at a fiscal level. This means that the debt-to-GDP ratio has to stabilise, and those
projections need to be realistic. If debt sustainability can be assured, with high
probability, then near-term borrowing will be more readily available. In these
circumstances, were government still to experience financing disruptions, we would
feel confident that these were liquidity problems which the SARB could help address.
However, presently, sustainability is not assured, which makes large-scale sovereign
bond buying potentially inflationary.
8
Barry Eichengreen, quoted in Enda Curran and Michelle Jamrisko, 2 April 2020, 'The same stimulus
that rich countries lean on could worsen poor economies', Bloomberg Quint, available at
https://www.bloombergquint.com/global-economics/a-mother-of-all-sudden-stops-leaves-emergingmarkets-in-crisis.
9
2020,
Philippe Burger and Estian Calitz, 24 February 'Soaring deficits and debt: restoring
sustainability amidst low economic growth', available at
https://www.econ3x3.org/article/soaringdeficits-and-debt-restoring-sustainability-amidst-low-economic-growth.
The proposals on the table for more bond buying are not modest. I have seen one call
for a trillion-rand fiscal stimulus financed by the SARB10, and another for SARB bond
to continue until 'economic recovery is well
purchases of R10-20 billion per week
underway'11. These numbers imply that the SARB would be buying, more or less, all
new debt for the foreseeable future. Such interventions would crowd pension funds
and other institutional investors out of the bond market.
Worse, we would be sending a dangerous signal. The crisis of the euro area, a few
years back, showed how damaging it can be for countries to send mixed messages
-
about their future monetary arrangements the so-called 're-denomination risk'. In
South Africa, the risk is that the domestic currency will no longer be issued by a
credible, inflation-targeting central bank, but by one that is fully financing the public
sector instead. Should we be going this way, some bondholders would probably be
enthusiastic about a large bond purchase programme so they could dump their bonds
their losses. And why shouldn't they be looking for a way
on the SARB and minimise
out? Imagine the situation: we would be taking over public sector financing, with no
clear plan for how to stop buying a potentially ever-larger issuance of bonds.
And although I have heard it suggested that we should do QE with conditions, we need
to keep in mind that we are a national central bank.12 The Constitution tells me the
SARB must protect the value of the currency, and that we must have regular
discussions with the Finance Minister. Nowhere does it say I can set conditions. As
such, the SARB cannot take responsibility for solving a fiscal sustainability problem,
nor can it jeopardise the value of the currency by agreeing to inflationary money
printing.
10
Owen Willcox, 2020, 'Macroeconomic response to COVID-19', available at
https://www.tips.org.za/policy-briefs/item/3798-macroeconomic-response-to-covid-19.
11
2020,
Andrew Donaldson, 9 April 'Monetary management, financial markets and public debt:
Policy Brief #3,
responding to COVID-19 and the economic standstill', available at
https://covid19economicideas.org/2020/04/09/monetary-management-financial-markets-and-publicdebt-responding-to-covid-19-and-the-economic-standstill/.
12
It is relevant to note here that when the European Central Bank (ECB) announced its programme
Monetary Transactions, to give effect to Mario Draghi's famous 'whatever it takes'
of Outright
commitment, it still insisted on 'strict and effective conditionality' through 'an appropriate
European
Financial Stability Facility / European Stability Mechanism (EFSF/ESM) programme'. The ECB did not
itself take on the design or enforcement of conditionality arrangements. See
https://www.ecb.europa.eu/press/pr/date/2012/html/pr120906_1.en.html.
Money creation, inflation and sterilisation
But why is it that monetary financing of the fiscus could be inflationary? As I have said
elsewhere, I am not worried about high inflation this year, especially given the recent
collapse of oil prices. But the fact that 2020 inflation is likely to be low in no way
guarantees that inflation will stay low, and therefore that we can stop worrying about
it permanently. In fact, if we commenced large-scale QE with a significantly positive
inflation rate, we would have to do one of two things: either sterilise the QE purchases
by absorbing those Rands back onto our balance sheet, or let interest rates fall below
the MPC target, ultimately to zero. The problem with setting the repo rate too low is
inflation. The problem with sterilisation is the cost. QE proponents in South Africa have
not appreciated the inescapability of this choice.
Let me explain how this works in more detail.
When the central bank creates money, we create one very specific type of money,
which is bank reserves, also called base money. The base-money system is a closed
loop, which means that the central bank, as the monopoly provider of new base
money, is the only institution that can change the total supply in the system. This is
the basis for monetary policy, because it confers the power to set the price of bank
reserves.13
When a central bank conducts a QE operation, or any other kind of asset purchase, it
pays in base money, which it deposits into the central bank account of the seller, be it
government or a commercial bank. This changes the total supply of bank reserves in
the system. The change in supply, in turn, affects the price. The crucial implication is
'tantamount to
that unsterilised asset purchases are, in the words of two economists,
13
On this point, and for a broader review of how different parts of the money supply are created, see
Bank of England Quarterly
'Money creation in the modern economy', especially pp. 21-25, in the
Bulletin Q1 of 2014, available at
https://www.bankofengland.co.uk/-/media/boe/files/quarterlybulletin/2014/money-creation-in-the-modern-economy.
an easing of interest rate As I'll explain in more detail later,
policy'14. this is the main
reason such policies can be inflationary.
During this crisis, we at the SARB have already expanded the supply of central bank
money, and although we have seen some deviation of short-term rates from the repo
target, these have not been too large or persistent. In practice, we have a deposit rate
-
set at 200 basis points below repo, which functions as a floor for the system it is
essentially a sterilisation instrument.15 As predicted by theory, we have therefore seen
actual short-term rates fluctuate between the repo rate and this deposit rate, although
they have mostly stayed close to the repo rate.
Of course, our interventions have not been going on too long, and this has been a
period of severe stress in financial markets. Were we to implement a large, long-term
increase in bank reserves, as would be required for a big QE programme, we would
need to sterilise more aggressively to keep the actual overnight rate close to the repo
target.
To do this, we could use various techniques. For instance, we could issue SARB
debentures to soak up Rands, or we could pay banks to deposit their reserves back
with us. Most of these policies would end up looking functionally equivalent to National
Treasury funding itself at the short end of the curve,16 benefitting from the low rates
set by monetary policy, which is already happening. Importantly, none of these
scenarios would be a free lunch: instead of Treasury paying interest, the costs would
show up at the SARB, as the price of doing sterilisation operations.
14
2009,
Claudio Borio and Piti Disyatat, November 'Unconventional monetary policies: an appraisal',
available at https://www.bis.org/publ/work292.pdf. These authors also discuss, as an alternative
inflation driver, the possibility that public narratives about central bank actions will also have economic
effects.
15
This point is equivalent to the one made for India by former Governor of the Reserve Bank of India,
titled 'Monetization: neither
Raghuram Rajan, in his widely circulated LinkedIn post game-changer nor
catastrophe in abnormal times', specifically point
5.
16
Claudio Borio, 8 November 2019, 'Wise fiscal policy is not about helicopter money', available at
https://www.bis.org/speeches/sp191108.htm#:~:text=A%20more%20balanced%20policy%20mix,rate
s%20further%20into%20negative%20territory
These costs would also be large. If we as the SARB bought R500 billion of government
bonds, at par, and then sterilised them at the repo rate, we would be insolvent in about
a year.17 For this reason, taking the perspective of the broader public sector balance
Treasury's
sheet, these operations would add to National already large need to
As such, a big QE operation wouldn't lift the budget
borrow. constraint. Instead, it
would end up saddling Treasury with yet another bankrupt government enterprise
asking for a bailout.
The only exception to the rule that asset purchases entail sterilisation costs is if interest
rates reach the zero lower-bound. This happens if even a zero interest rate is not
enough to achieve a central bank's objectives, like
hitting an inflation target. In this
case, central banks can create enormous quantities of bank reserves, which just pile
up on their balance sheets without creating any further downward pressure on
overnight rates. The reason for this is that banks with excess reserves will have no
incentive to lend them out for less than 0% interest. This has been the exact situation
of major advanced economies for much of the past decade, and it has given these
central banks almost unlimited scope to buy assets. Given this extraordinary situation,
'the age of magic money'.18
one economist has described this as
This is not, however, the situation in most emerging markets. For us, a persistent and
unsterilised increase in bank reserves would create downward pressure on interest
rates. If this pressure were not released through sterilisation, it would force overnight
rates to zero and keep them there. This is likely to be inflationary, even in a weak
economy. Creating extra reserves lowers the effective short-term interest rate
compared to the repo rate set by the MPC, whether demand in the economy is weak
or not.
The trick, therefore, is to figure out what the appropriate short-term rate for South
Africa is. Market expectations are that it will remain above 3% over the next few years.
Our projections show much the same, and that this will be enough to return inflation
17
The SARB's capital and accumulated reserves were R20
billion as of 2018/19. Sterilisation costs
for R500 billion would be around R19 billion a year.
18
2020,
Sebastian Mallaby, July/August 'The age of magic money', Foreign Affairs, available at
https://www.foreignaffairs.com/articles/united-states/2020-05-29/pandemic-financial-crisis.
to the 4.5% target midpoint. Even some proponents of SARB QE have acknowledged
that a zero repo rate is too low for South Africa, and that it should at least be the rate
ruling in the developed world plus a risk premium.19
Credit and saving behaviour is part of the story here, but we also need to consider the
exchange rate effects, in addition to the inflation expectations channel. Remember:
because we have inflation several percentage points higher than in the advanced
economies, our real rates can go quite a bit lower than theirs. If we really need to
create extra inflation, we can set the repo rate to be minus 2% or minus 3% in inflation-
we'll get inflation led by the exchange rate.
adjusted terms, and then
Inflation targeting in a crisis
This raises a really interesting question, however, about whether we are heading into
another Great Depression, in which case such radical policies might become
appropriate. There is no agreed definition of a depression, but the outstanding
characteristics of the last Great Depression were large and sustained falls in both
output and prices. To be clear: this is not our baseline forecast, nor is it the outlook
according to all available quantitative projections. Nonetheless, we understand that
we live in a highly uncertain world, and that conditions could deteriorate further. It is
therefore worth contemplating how the SARB would react in a depression scenario.
One of the extraordinary things about the Great Depression is that our understanding
of what went wrong, and why, has evolved dramatically over the ensuing decades.
The popular contemporary view, which still features in high-school accounts of the
Depression, is that it was caused by a stock market crash. But the US stock market
crashed many times, both before and after 1929, with much less disastrous results.
Another popular explanation is that the Depression was caused by a collapse in
demand, which was only ultimately resolved by active New Deal fiscal policies. But
19
2020,
See, for instance, Christopher Malikane, 17 May 'Why arguments against quantitative easing
Business
hold no water', Day, available at
https://www.businesslive.co.za/bd/opinion/2020-05-17-why-arguments-against-quantitative-easinghold-no-water/
this explanation is also given secondary status by most modern scholars, who
emphasise, instead, the role of central banks.20
As former US Federal Reserve (Fed) Chairman Ben Bernanke once said: "Regarding
... We did it. We're very sorry ... won't do it again."21
the Great Depression [W]e By
this account, the major mistakes were threefold.
First, central banks permitted large-scale bank failures, destroying credit
intermediation and contracting the money supply.
Second, and largely in response to the first factor, countries fell into deflation, which
pushed up the real value of debt, bankrupting borrowers. For instance, in the US,
prices fell by almost 10% a year in the worst years of the Depression.
Finally, central banks stuck to fixed exchange rates via the gold standard, which
timed interest rate increases, such as the Fed's decision to raise
required some badly
rates by 200 basis points in October 1931. Imagine raising rates with negative inflation
and real rates already in double digits!
It was precisely these sorts of central bank mistakes that turned sharp downturns into
depressions, and then prolonged those depressions. When these mistakes were
reversed, countries recovered.22
This is relevant because modern central banks, including the SARB, have policy
symmetric
frameworks to avoid precisely these errors. We have price stability
mandates, expressed in inflation targets, which tell central bankers to avoid too high
and too low inflation. We have floating exchange rates which absorb shocks rather
than magnifying them, and our accumulated credibility is now such that we can slash
interest rates despite large exchange rate depreciations. We have financial stability
20
These points are drawn from Ben S. Bernanke, 2 March 2004, 'Remarks by Governor Ben S.
Bernanke: money, gold, and the Great Depression', available at
https://www.federalreserve.gov/boarddocs/speeches/2004/200403022/default.htm.
21
2002,
Ben S. Bernanke, 8 November 'On Milton Friedman's ninetieth birthday', available
at https://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021108/.
22
'Gold
See Liaquet Ahamed, 2009, Lords of Finance, especially chapter 20, titled fetters'.
mandates to ensure that the financial system keeps functioning under stress, and that
institutions don't.
too-big-to-fail
In sum, far from being irrelevant in a depression scenario, our frameworks incorporate
the most profound lessons of the Great Depression. If we start to go down this path,
our frameworks will immediately guide us to take remedial action. This fact alone
should protect us from another Great Depression.
Conclusion
Frankly, rather than 1929 repeating itself, I am more worried about a different scenario.
As a country, we have got ourselves into a lot of trouble. We are struggling to learn
the lessons of these mistakes, and to achieve the consensus to fix them. And we are
-
running out of time. We have just completed our worst growth decade on record
worse than the 1980s or the 1990s. On a per capita basis, South Africans have been
getting poorer since 2013.
In the world, we are slipping backwards. In 1960, South African incomes were around
are now down to 13%. They were 128% of Brazil's in
26% of those in the US. They
1960, a country to which we are often compared; they are now down to 65%. Rather,
we risk following Argentina's path,
where ideological conflicts and unstable
macroeconomic policies produced a steady economic decline.23
In much of the period after 1994, we in South Africa surprised everyone by cooperating
despite our differences, and delivering robust and sustainable macroeconomic
policies. But those accomplishments have faded. Instead, we now find ourselves
sitting on the highest debt pile in our history, arguing about printing money and waving
ideological banners at each other.
23
For a quick review of this experience, see 'The tragedy of Argentina: a century of decline',
17 February 2014, The Economist, available at
https://www.economist.com/briefing/2014/02/17/acentury-of-decline.
It seems imperative that we work hard to define a new approach for the future. We
have used up the legacy of low debt levels. Fortunately, we have achieved low
inflation. We cannot squander that achievement on the quixotic belief that if we just
engineer higher inflation, somehow growth will permanently rise. Our own experience
shows that belief to be wrong, and we can set out now on a new path with low interest
rates if we guard and value them. We have nearly all the ingredients needed to get
permanently stronger economic growth, create jobs, and rid ourselves of poverty and
inequality. But we need to choose, as a society, to do these things.
First, let's make sustainable choices that get us past the
COVID-19 pandemic and
help us grow in future.
Second, let's
open up for investment to increase our productivity.
let's work together, pragmatically, to choose
Finally, the reforms that will create jobs
and prosperity.
Thank you.
Page 14 of 16
Supporting charts
Central bank bond-buying programmes*
3
2.8
2.5
2
GDP
1.5
of
%
1
0.8
0.6 0.6
0.5
0.2
0.13
0.1
0.01
0
Bolivia South Korea Mexico India Thailand South Africa Colombia Chile
*Announced March/April 2020. Sources: BIS & SARB
2020 General government balance projections
0.0
-2.0
-4.0
GDP
of
-6.0
Percent
-8.0
-10.0
-12.0
-14.0
-16.0
EM debt stocks:
Estimated term premium:
Change between 2009-19
10y bond
50
5
40
4
29.8
30
3
20
GDP
of
2
10
pp
%
0 1
-10
0
-20
-1
-2
2012 2014 2016 2018 2020
Source: IMF
Source: SARB
EM 10y govt bond yields:
EM 5y CDS spreads:
Change from 1 Jan - 17 Jun
Change from 1 Jan - 17 Jun
60
200
40
180
160
20
140
0
120
points
-20 100
points
80
Basis
-40
60
Basis
-60
40
20
-80
0
-100
Chile
China Brazil
Africa
Russia
Turkey
Mexico
Thailand
Malaysia
Indonesia Colombia
South
Source: Bloomberg Source: Bloomberg
Page 16 of 16