Up to eight African countries need debt restructuring

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(Bloomberg) — Africa needs international help as it faces a severe financing crisis that has forced up to eight of its countries to restructure their debt, an International Monetary Fund official said.

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“This is where we are working to try to mobilize more resources for countries,” IMF Africa Department Director Abebe Selassie said Thursday in Marrakech, Morocco, referring to countries facing pressures on debt, notably Ghana and Zambia.

Guardians of the global economy gather here for the annual meetings of the IMF and World Bank to discuss challenges such as poverty reduction, climate change and easing the debt burden of poorer countries . The ongoing war between Israel and Hamas has added further uncertainty to the global outlook.

World Bank Group Governors Adopt Lending Reforms, Germany Says (2:40 p.m.)

The changes include lowering the minimum equity-to-loan ratio from 20% to 19% and using hybrid capital, German Development Minister Svenja Schulze told reporters in Marrakech.

She says the role of the International Finance Corporation, the World Bank Group’s lending arm for the private sector, will be increased. Other changes include clauses on climate-resilient debt, where loan repayment can be suspended in the event of a natural disaster.

Sri Lanka nears financing deal with IMF as debt talks continue (1:36 p.m.)

Sri Lanka is expected to reach a deal in the coming days that would help it mobilize more funds from the IMF, although it is still trying to consolidate negotiations with its creditors on debt restructuring.

Officials from the South Asian country and the IMF are close to reaching a staff-level deal after talks in Morocco this week, according to people involved in the discussions, who asked not to be identified because the matter is not yet finalized. Only a few questions remain, one person said, declining to provide more details.

Egypt, IMF meet to discuss key review after progress (12:57 p.m.)

The IMF is “working closely” with Egypt to set dates for discussing a much-delayed review of a $3 billion bailout package, citing recent progress on reforms.

“Our discussions are essentially focused on Egypt’s success,” Managing Director Kristalina Georgieva told reporters at the lenders’ annual meetings in Marrakech on Thursday.

Roubini says markets are downplaying risk of major Middle East conflict (11:22 a.m.)

Global financial markets are ruling out for now the risk of a “massive conflict across the Middle East,” said economist Nouriel Roubini.

Investors expect Israel “to have no choice but to go into Gaza and get rid of Hamas,” Roubini told Bloomberg television. Markets are pricing in a baseline scenario in which “Israel occupies Gaza, it’s going to get ugly, but the conflict remains contained.”

Weak European economy faces inflation and oil risks, says Gentiloni (10:40 a.m.)

The European economy faces persistent difficulties due to inflation as well as the risk of an impact on oil prices due to the conflict between Israel and Hamas, according to European Commissioner for the Economy Paolo Gentiloni.

“We have a weak economy, but we are not in recession, and that is mixed news,” he said in an interview with Bloomberg television in Marrakech. “If you think about what we expected a year ago, we expected a worse situation than what we find ourselves in.”

Georgieva: Monitoring events in the war between Israel and Hamas very closely (9:33 a.m.)

IMF chief Kristalina Georgieva said the ongoing conflict after Hamas’s attack on Israel poses a “new cloud” over the global economy, but it is too early to judge the consequences.

“In terms of economic impact, we are monitoring developments very closely, particularly its impact on the oil markets. It is too early to say,” she declared during a press briefing in Marrakech. “This is very clearly a new cloud on a horizon that is not the sunniest for the global economy.”

ECB’s Centeno says current stance will bring inflation back to target (9:04 a.m.)

Mario Centeno, a member of the Governing Council of the European Central Bank, expressed confidence that current monetary policy settings will bring inflation back to target.

“With the current level of interest rates, we will make a substantial contribution to the 2% target,” the Portuguese central bank governor told Bloomberg TV. “We will achieve this by continuing this monetary policy, maintaining it for a period of time until we are completely sure that inflation is coming down.”

African markets contract as investors flee growing uncertainty (9:00 a.m.)

African capital markets are smaller than they were a year ago after uncertainty triggered by Russia’s war in Ukraine, the biggest rise in global interest rates since the inflationary shocks of the 1980s and the depreciation of the currency which led to the flight of investors.

The flight to safety has driven up the cost of debt and reduced the continent’s pension assets, as well as foreign exchange, stock and bond markets, according to the latest report from Africa’s Financial Markets Index. Absa Group Ltd., which assesses the financial development of 28 countries.

Bank of Korea warns of potential impact of conflict on oil (8:49 a.m.)

Bank of Korea Governor Rhee Chang-yong said any potential worsening of the Middle East conflict, which would lead to a sharp rise in oil prices, could weigh on the bank’s growth forecasts, but that it is too early to assess the impact at this stage.

“If this problem goes beyond the regional framework and extends to the entire Arab region, then it will have a big impact,” Rhee told Bloomberg TV’s Francine Lacqua.

Sri Lanka and China agree to restructure $4.2 billion in debt (6:44 a.m.)

Sri Lanka and China have agreed to restructure $4.2 billion in debt, allowing the South Asian nation to secure more funds from the International Monetary Fund.

The agreement reached “on the key principles and indicative conditions of debt treatment” constitutes a key step towards the restoration of long-term debt sustainability and economic recovery of Sri Lanka, said the Ministry of Finance of country.

IMF negotiations on debt standoff between China and private lenders (October 11, 7:49 p.m.)

Global creditors are increasingly at odds over how to level the playing field among lenders when governments default, hampering efforts led by the International Monetary Fund to speed up sovereign debt restructuring.

Talks scheduled for Thursday at the IMF’s annual meeting in Marrakech, Morocco, between different groups involved in the restructurings – including China and private creditors – are unlikely to produce progress, according to people attending the session.

–With help from Martha Beck, Adelaide Changole, Sam Kim, Alexander Weber, Ekow Dontoh, Eric Martin, Jana Randow, Christopher Condon and Mirette Magdy.

(An earlier version of this story corrected the spelling of Israel in the headline)

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