Latin American banks managed to remain profitable and in growth mode in 2018, despite challenges that included an ongoing economic meltdown in Venezuela, Brazil’s slow recovery from a short recession, the Trump administration’s tense relations with Mexico and the devastation caused by two major hurricanes that slammed several Caribbean islands the year before.

Against all this, the region’s bankers again proved their resilience—forged from their accumulated experience during multiple crises in the past—and governments were better prepared, with appropriate regulations to lessen fallout from both external and internal shocks. On most fronts, 2018 was a positive, albeit challenging, year for the Latin American banking system.

As an engine for development, however, the system still has much to accomplish. In particular, Latin America’s large unbanked population poses both a challenge and an opportunity. In Mexico, an estimated 60% of the population still has no access to traditional banking channels. The new administration of President Andres Manuel Lopez Obrador is taking steps to address the issue, including policy initiatives to reduce Mexicans’ high cash usage and foster credit access. Latin American banks have continued to invest in technology to strengthen the digital channels they feel will be key to attract new market segments and court the unbanked.

The situation is improving, according to the 2018 Financial Inclusion Report of the Latin American Banking Federation (Felaban). Using data collected in 2017 from banks in 17 countries, the report shows regional per capita banking deposits doubled over the past decade, and Latin American banking sector credits reached 38.7% of regional GDP. Felaban acknowledges, however, that an appropriate digital-transformation drive is still required to close the region’s financial inclusion gap.

BBVA, Global Finance’s Best Bank for the region in 2018, credits a number of digital products and services with boosting its regional performance last year, highlighted by a 9.7% year-on-year increase in South American credit investments and an 11.8% jump in assets. At the end of 2018, BBVA’s sales on digital channels represented 54% of its total sales in South America and 37% of its total in Mexico, where the figure reportedly has tripled over the past two years alone. The bank has strengthened its digital presence and integrated several of its platforms. It also launched a regional Open Innovation program to support fintech startups, which it predicts will create the technology allowing it bank to continue creating disruptive customer solutions.

While international banks such as BBVA have made sizable technology investments in the region, local banks in some markets are counting on their local knowledge to help them compete for customers. One of these is Banorte, our pick for top bank in Mexico. “At Banorte, we are proud of being a Mexican bank working for Mexicans,” CEO Marcos Ramirez tells Global Finance. Banorte is Mexico’s second-largest bank and one of very few locally owned private financial institutions. “We understand our client’s culture, we are part of it, and work every day to understand their needs and make it easier for our customers to bank with us,” Ramirez adds. “All our decisions are made locally, allowing us to have a streamlined decision process.”

Bradesco, Brazil’s second-largest private bank, cites outreach to the unbanked, or “democratization of credit,” as one of its key business drivers. Since its beginning, Bradesco’s philosophy has been “to be a bank whose door is always open, welcoming everyone who comes in, regardless of their financial situation, with personalized service and according to the segmentation appropriate to the client’s profile,” the bank said in its submission to Global Finance. Accordingly, Bradesco maintains a presence in all of Brazil’s municipal districts, but digital banking has become an overwhelming driver of business. Digital channels accounted for 96% of transactions in 2018, a 17% increase over the previous year.

Other leading banks in the region are moving in a similar direction. Banco Mercantil Santa Cruz launched a new internet banking platform as well as a mobile banking application, to take the win for Best Bank in Bolivia. Our winner in Argentina, Banco Santander Rio, opened four digital branches, while Banco Itaú Paraguay launched the first digital agency in that country. El Salvador’s Banco Cuscatlán has enhanced its digital platforms, with penetration expected to rise to 50% by 2021, from 11% last year. Colombia’s Banco de Bogotá has introduced three new digital products for mortgages, free-purpose loans and payroll loans, while also participating in a blockchain-technology exploration project with the country’s central bank to implement an immediate interbank payment system.

Financial inclusion is also a priority for our winner in Honduras, Banco Ficohsa, which in 2018 launched Tengo, a mobile application, with an additional 300 points of service to perform financial transactions. The aim is to attract consumers with limited or no access to banks. After launching the first Agile Lab in the English-speaking Caribbean to accelerate its digital agenda, National Commercial Bank of Jamaica now has a dozen such projects, focused on developing solutions such as digital account openings and digital lending. RBC Royal Bank last year become first bank in Barbados to offer contactless-enabled point-of-sale devices for merchants, an initiative its Canadian parent pioneered across the Caribbean, which contributed to its win as Best Bank in Barbados.

In Costa Rica, BAC Credo-matic has supported economic development through innovative products, introducing contactless payments and e-commerce solutions in a country with 86% internet penetration. Already, 70% of the bank’s point-of-sale systems in Central America are contactless-ready and 80% of its card base is contactless. Likewise in Guatemala, Banco Agromercantil, majority-owned by Colombia’s Bancolombia, is deploying technology to create new offerings. It now operates BAM Chat, a digital tool that allows consumers to conduct live chats with bank staff.

These efforts are designed to increase banking-sector efficiency along with facilitating relationships with the unbanked population. Some experts warn, however, that the two objectives could clash as aggressive digitalization leads to branch closures, particularly in rural communities where the banking sector’s presence is already low. The result: Many communities could find themselves without a bank to support local development. The key, some close observers argue, is for banks to promote the use of multiple banking channels, including some in-branch transactions, rather than migrate exclusively to digital platforms.

Small to medium-size enterprises also present opportunities for our Best Bank winners in Latin America. Peru’s Banco BBVA Continental launched a new online channel and a mortgage product for real estate investments by SMEs in 2018. In the Dominican Republic, Banreservas has sponsored conferences to review opportunities for SMEs and has launched custom-tailored financial tools it expects will help make the sector more competitive.

Climate change and sustainable development are growing concerns in Latin America, as well. Banks in the region are responding with their own environmental initiatives, as well as supporting projects in the communities they serve. The International Finance Corporation (IFC) last year structured a $115 million transaction, along with the OPEC Fund for International Development, for Nicaragua’s LAFISE Bancentro to intermediate funds for SMEs and projects that meet smart-climate criteria. The transaction marked the largest ever between the IFC a Central American financial institution.

“We have a broad-based product offering that is suited to diverse financial needs and can be tailored to both a small, family-owned business as well a corporate syndication looking to invest in tools, technologies and working capital, with best practices that seek social and environmental conservation,” says Roberto Zamora, LAFISE Bancentro’s CEO. The bank’s financial product, Ecocreditos, is directed toward diverse economic sectors, including cattle farming, tourism, coffee, transportation, renewable energy and cleaner production. “With this offering, we have been able to finance biodigesters, solar panels, efficient lighting and cooling systems and process automatization, among others,” Zamora said.

Ecuador’s Produbanco introduced the country’s first “green” savings account last year in a bid to attract environmentally conscious customers. For the fourth year in a row, the bank received a Carbon Neutral Certification, granted to institutions that promote activities that reduce carbon emissions and offset their own. Produbanco offset 100% of its annual emissions by sponsoring 950 hectares of forest, while also spearheading energy-consumption awareness campaigns nationwide. Santander Uruguay has implemented initiatives adopted by its Spanish parent, which has made fighting climate change one of its core goals. The bank’s waste and emissions reductions achieved its 2016-2018 environmental-efficiency targets.

Banks in Latin America kept pace with their recent corporate social responsibility (CSR) investment initiatives last year, with education accounting for a large share. A Felaban regional report on financial-education initiatives in 2018 noted that 97% of financial-education programs offered by banks surveyed in the region were delivered free of charge to attendees, and self-financed by the various financial institutions.

Banco General, the largest locally controlled private bank in Panama, dedicated more than 40% of its CSR budget to education programs. In the Bahamas, CIBC FirstCaribbean, whose 11% profit hike in 2018 was its best performance in 11 years, supported the relaunch of its national financial-literacy campaign, which focuses on personal finance and banking for consumers.

Belize Bank granted 20 scholarships in 2018, bringing the total to date to 120 under its annual scholarship program. And Republic Bank in Trinidad and Tobago, offers RS Teen, a savings account for teenagers, as well as the Youth Link Apprenticeship Program for secondary-school students, which launched in 1986.

Banco de Chile has taken a different path with its CSR investments, focusing on support for the Teletón, an annual telethon that raises funds for people with disabilities. The bank has sponsored the event continuously for the past 40 years. Last year, more than 9,000 Banco de Chile employees worked as volunteers to support the highly rated televised fundraiser.

In the Caribbean, some CSR investments have focused on community rebuilding and economic recovery since Hurricanes Maria and Irma wiped out critical infrastructure and devastated the economy in places like Puerto Rico and the US Virgin Islands two years ago. Banco Popular de Puerto Rico’s move to restore its services, reduce ATM fees by 50% and introduce credit-repayment grace periods, all while operating under emergency conditions, strengthened customer loyalty and increased its customer base. The bank’s profitability has been supported by reconstruction spending and the beginnings of an economic recovery.

In the US Virgin Islands, FirstBank Virgin Islands is earmarking much of its CSR budget for its Community Reinvestment Program, which supports projects and initiatives focused on education and financial literacy, housing and economic development, community and social development, and environmental and community revitalization.

In Venezuela, where US sanctions and government-policy failures have created an economic debacle, Mercantil Banco Universal has thus far maintained its profitability streak amid the crisis by adhering to sound financial-management policies. It has also continued a program of CSR investments: The bank’s social-development initiatives include programs to aid children, the elderly and the disabled in a country the World Bank predicts will experience a 25% economic contraction this year and a 10 million percent rise in consumer inflation.

While digitization has enabled many of Latin America’s top banks to register positive performance, often under difficult economic conditions, bankers may need to once again consult their well-worn volatility-resilience handbooks in 2019.

Economists predict Latin American banks are in for some choppy waters ahead. BBVA Research lowered its regional growth outlook to 2.1% in 2019, a 0.3% downward adjustment from previous expectations. Citing US-China trade tensions and central banks’ more dovish policy positions, among other factors, Goldman Sachs has also lowered its growth outlook for several large Latin American markets, predicting Mexico and Brazil will grow by only 2.2% and 1.5%, respectively.

“We expect challenging credit conditions to carry on in 2019 due to trade tension … and commodity price trends,” concluded a Standard & Poor’s Global Banks 2019 Outlook discussing Latin American banks. The rating agency expects risks in the region to “remain elevated and potentially worse” this year.

Colombian President-elect Iván Duque, who will be sworn in on August 7, faces some important economic challenges, notably a growing fiscal deficit and a sluggish economy. The conservative populist, who won a run-off vote in June against Gustavo Petro of the left-wing Colombia Humana party, is counting on a platform of business-friendly policies to address those challenges.

Those policies signal an aggressive push for growth in Latin America’s fourth-largest economy, with GDP of $328 billion, according to the IMF. A lawyer and former senator—who was senior adviser at the Inter-American Development Bank and consultant to the Andean Development Corporation before leading the Democratic Center party to victory—Duque plans to simplify the tax code, reduce corporate taxes, provide fiscal incentives for investments that create jobs, and deepen local capital markets. He also aims to boost support for the agricultural and mining sectors, while adopting policies to further diversify the economy.

Colombia could use a spurt of investor confidence. Last December, Standard & Poor’s downgraded its sovereign debt from BBB to BBB-. Two months later, Moody’s slashed its ratings outlook from stable to negative. Weak prices for oil, Colombia’s main export, are creating further concerns.

The economy is expected to grow by 2.7% this year, according to both the IMF and OECD, after posting an anemic 1.8% in 2017. Last year’s fiscal deficit, at 3.6% of GDP, raised concerns that the government will have difficulty meeting its targets of 2.2% in 2019 and 1% by 2022, unless the incoming administration curbs public spending and boosts fiscal revenues.

The status of a peace treaty with FARC guerrilla forces, signed in 2016, is another concern. Duque opposed the deal and vows to overhaul it, although the controversial pact ended a 50-year civil war and helped move society toward stability.

Duque, who turns 42 on August 1, will be the youngest president in Colombian history. His background is just the sort to appeal to investors: a law degree from the Sergio Arboleda University in Bogotá and postgraduate studies in international economic law at American University and in public policy management at Georgetown University.

Global Finance (GF): What is Santander’s vision for its business in Latin America?

Enrique Alvarez: Santander has a longstanding relationship with Latin America, which goes back to when the bank was founded 160 years ago. Our presence has grown over time and the region is key for the Group, contributing to our diversification and growth. We are in Latin America to stay.

Our banks in Latin American have also proved to be a relevant source of innovation. Take as an example Work Cafes in Chile, a revolution of the branch concept that makes customers want to come to the bank. Or Superdigital in Brazil, a mobile platform for making deposits, withdrawals and payments even if you do not have a bank account, providing new products and services to the unbanked population. These are just some examples of how we are innovating to help people and businesses prosper, our purpose.

GF: What are the main challenges that Latin American markets pose for the bank?

Alvarez: In macroeconomic terms, the outlook for the world economy is positive. Growth is expected to be close to 4% in 2018, a six-year high. And, most importantly, the cycles are aligned: Both developed and emerging countries are growing. Regarding Latin America, the general situation can be summed up in four main points: sustained growth in lending, higher interest rates than in mature markets and low banking penetration levels, and a more favorable demographic evolution than in mature markets. This environment favors profitable growth. So, at this point of the cycle, there are no major concerns on the economic front.

It is true that emerging markets sometimes involve higher levels of volatility on different fronts, but we have a deep understanding of the region and know how to manage in these contexts as we have proven in the recent years. We are convinced our local teams will continue to deliver outstanding results for the Group while doing things right in a simple, personal and fair way.

More broadly, Latin America has the same challenge we are facing worldwide: the digital revolution, which is creating new challenges and opportunities at a pace we have never seen before. That change is having an impact on politics and society everywhere. And for Santander, it has an impact on how we do business. That’s why we believe it is essential to fulfill the cultural transformation we are working so hard on.

GF: What are the main opportunities that Latin American markets pose for the bank?

Alvarez: Challenges and opportunities are closely linked together in the context of the digital revolution. Latin America offers huge potential for growth as there is still a significant percentage of the population that remains unbanked, 160 million people.. Digitization offers the possibility of providing financial products and services to people who wouldn’t have had access to them before and to do so in a more efficient way.

Now banking can be done through a mobile phone, without the need to travel to deposit money or take out a loan or get insurance. For us, this is a clear opportunity to earn the loyalty of more customers. The example of Superdigital I mentioned earlier proves this potential-it is growing at around half a million customers a year in Brazil, supporting inclusive and sustainable growth wherever we operate. Our services and products are already bringing new customers into the financial system, enabling them to share the benefits of growth.

GF: How can Latin American banks remain profitable?

Alvarez: Santander has a unique model, with scale in its key markets which is very difficult to replicate. The critical mass we have in our core countries, which are also the region’s most relevant banking markets, is crucial to understanding the recurrence and stability of our profits. At the same time, the benefits of being part of a Group are clear in terms of economies of scale, innovation and sharing of talent and best practices.

The macro environment in Latin America is positive, and so is the context for the banking business, so we are optimistic. The digital revolution provides new, more efficient ways to provide products and services to people who have never before worked with a bank, and to do so more efficiently. We are confident we will continue to deliver profitability, which will in turn enable us to support the communities where we operate.

Global Finance (GF): What is Banco Agrícola’s vision for its business in El Salvador?

Ana Beatriz Marin Restrepo: As part of Bancolombia Group, our aspiration is to be the leading financial group that sets trends, generates a superior experience for our clients, takes pride in its employees and generates value for its shareholders in a sustainable manner. We attain this through our focus on expanding the portfolio of products, services and channels that allow us to deepen our attention to segments in which we are not yet leaders, contribute to the bankerization of the country, promote digital transformation and design client-centric experiences, thus ensuring the preference and satisfaction of our customers that produces profitable and sustainable growth.

GF: What are the main challenges that the Salvadoran market poses for the bank?

Restrepo: In general, we see international and Central American region economic perspectives more positive than the previous year. The recent political agreements made regarding the financing of the government´s long-term debt, the national general budget and pension reform have generated an improvement in El Salvador´s credit rating, which is positive for the performance of the local economy. Recent changes in immigration policies in the United States bring new challenges which could have an impact on the local economy. However, we have a very robust financial system. With a positive performance trend in growth and profitability, Banco Agrícola will continue to support Salvadorans in achieving their dreams, participating not only in the economic sphere but as a manager of development, welfare and sustainability for communities and for the country.

GF: What opportunities is the bank focused on?

Restrepo: Banco Agrícola as a universal bank serves different customer segments with an integral portfolio of products and services. Our growth expectations are aligned with the economic growth projections of the country, with opportunities in the sectors of consumption, housing, industry, commerce and construction. Additionally, we are strengthening capacities such as deep knowledge of our customers, digital transformation, efficiency management and innovation, which allow us to maintain and consolidate our leadership position that characterizes us as the preferred bank of Salvadorans.

GF: How can Salvadoran banks remain profitable?

Restrepo: The Salvadoran financial system is solid and highly competitive, as the main player in that sector we could say that the key is to bet on profitable and sustainable growth in the long term as a result of the commitment to responsible sales, prudent risk policies, disciplined commercial management and operational excellence through efficient processes.

Latin American bankers, though, are no strangers to such volatility, having continually survived economic, banking and political crises. Today, the region’s financial institutions are focusing on robust customer-acquisition plans that include attracting Latin America’s underbanked population and supporting the growth of small- and medium-size enterprises (SMEs). Meanwhile, investments in technology are boosting operational efficiency, increasing competitiveness, helping reach new customers and addressing growing global concerns over cybersecurity.

This year’s Best Bank winners have taken different approaches to maintaining profitability and introducing innovations, while also seeking ways to contribute to the communities in which they operate.

For Spain’s Santander, our pick for Latin America’s Best Bank, the region remains a key driver for the group’s growth, contributing 51% of its total income. Santander’s Latin American operations serve more than 44 million customers through more than 6,000 branches in six markets. Brazil is its star performer, posting a 42% year-over-year rise in attributable profits, to €2.5 billion ($3.1 billion).

“Santander operates as a local bank in the markets where it is present, which means we have an in-depth knowledge of the needs of our clients in each country,” says Enrique Alvarez, Santander’s head of strategy, who notes its local banks still deliver the advantages of being part of a “strong, international group bringing innovation, technology and best-in-class products and services.”

Alvarez points to Santander’s Latin American operations as a source of innovation. “Take as an example Work Cafes in Chile, a revolution of the branch concept that makes customers want to come to the bank,” he continues, “or Superdigital in Brazil, a mobile platform for making deposits, withdrawals and payments even if you do not have a bank account, providing new products and services to the unbanked population.”

Digital transformation drives much of the regional banking sector’s growth strategy. “We direct our priorities and efforts toward the digital transformation plan,” says Ricardo Cuesta Delgado, CEO at Ecuador’s Produbanco. “We are focused on short-term digital enhancements for our customer base and medium- and long-term flexibility to allow for the best and most automated user experience possible.” Produbanco has traditionally catered mainly to the corporate sector, but has increased its focus on SMEs and urban areas beyond the capital city of Quito, which remains its core market.

At Mexico’s BBVA Bancomer, bank management sees a NAFTA renegotiation and this year’s presidential election as potential challenges. Still, it feels that the strength of the banking sector, including high solvency and liquidity ratios, will enable BBVA Bancomer to weather any storms ahead. Much of this confidence results from policies and initiatives that have been in place for some time.

“In 2013, BBVA Bancomer launched an important transformation plan that involved technology, innovation, refurbishment of branches and a complete improvement in the quality of customer service,” says CFO Luis Ignacio de la Luz Dávalos, who notes that the plan continues to be supported by ambitious investments.

Banco Santander Río has the stated goal of becoming Argentina’s best digital bank, for which it launched a three-year, $500 million technology-investment plan. “We expect a macroeconomic scenario of strong credit growth, interest rate decreases, and an augmentation of the deposit base,” says CEO José Luis Enrique Cristofani. However, he notes that banks will need to further increase the use of digital channels to improve efficiency, and views a more competitive environment—which includes non-banking competitors in the digital space—as a key challenge.

Costa Rica’s BAC Banco San José has successfully gone digital. Some 80% of its customer transactions since 2016 have been made using electronic and mobile banking channels, and it was the first bank in the country to open digital branches. Among its technology innovations is the introduction of an electronic wallet that allows customers to make digital payments and complete cardless ATM withdrawals.

BBVA Paraguay is another digital success story, with consumer loans obtained through digital channels jumping to 21% in October 2017 from 14% a year earlier, while digital sales of insurance products rose 20% during the same period.

Belize Bank has helped the small Central American country overcome longstanding criticisms over how much it lagged its neighbors in terms of automated banking. The bank replaced its 15-year-old ATM operating system in 2017, launching a mobile banking app as part of the upgrade.

Banco de Crédito del Peru, which has maintained a 30% to 33% market share in its home country for the past century, launched an award-winning chatbot last year that has enhanced the customer experience.

The National Commercial Bank of Jamaica put into production the first solution obtained from its digital Agile Lab last year, allowing customers to open accounts online. The bank believes this is the first solution of its kind in the English-speaking Caribbean. More than 40% of the bank’s customers now use its online account-opening services.

Bradesco, one of Latin America’s largest banking conglomerates, has pioneered innovation among Brazilian banks throughout its 75-year history. In 2017, it invested $1.8 billion in technology. However, Bradesco’s customer-outreach philosophy goes well beyond digital solutions. The bank’s growth strategy is based on what it calls the “democratization of credit,” which includes maintaining a presence in all Brazilian municipal districts and providing services to all socioeconomic classes.

The Dominican Republic’s state-owned Banreservas has also sought ways to get closer to its clients. In 2017, its neighborhood sub-agents—which include supermarkets, grocery stores, pharmacies and gas stations—handled more than 1 million transactions. The bank has also been recognized for its support of SMEs and the fast-growing tourism sector, both of which contribute to the country’s economic development.

In Colombia, Banco de Bogotá took a different approach to reach a broader customer base, launching a new type of savings account last year aimed at the lower-income market. The product attracted 30,000 customers and is helping shrink the country’s unbanked population. This year, Banco de Bogota kicks off a three-year plan to create what it calls the “office of the future,” in response to changing customer needs in the digital environment.

Education remains among the Latin American banking sector’s key priorities when it comes to corporate social responsibility (CSR) initiatives. Banco Ficohsa in Honduras, which operates in five countries and most recently acquired an insurance company in Guatemala, views education as the main catalyst for economic development. Among its CSR efforts, it has created 29 technology centers equipped with more than 500 computers, built 140 preschool education centers and trained 274 teachers.

In neighboring Nicaragua, Banco LAFISE Bancentro integrates technology into the learning process by providing students and teachers with laptops and sustainable connectivity infrastructure in schools. To meet its goals, the bank has partnered with the One Laptop per Child Program. The bank remains the country’s most profitable financial institution, with net profit of $51.8 million and a return on equity of 23.9% last year.

Scotiabank Bahamas teaches savings and investing techniques to youth through a partnership with the Royal Bahamas Police Force Summer Youth Camps. The bank also offers mortgage seminars to the community, recognizing that mortgages and home ownership have a multiplier effect on local economies.

At Republic Bank in Trinidad and Tobago, the bank’s social investment program focuses on improving literacy levels and building skills among the country’s youth. The program also participates in youth development efforts through poverty alleviation and assistance to persons with disabilities.

SMEs are another important target for banking sector growth and profitability in Latin America.

“During the last few years, the bank has been growing its share in the retail and SME markets,” says Alberto Valdés Andreatta, CEO at Banco Mercantil Santa Cruz in Bolivia. He notes that last year’s acquisition of Banco PyME Los Andes ProCredit, a local SME-focused bank, has contributed to strengthening SME relationships.

Banco Agromercantil in Guatemala targets SMEs by tailoring products specific to that market.

Bandes Uruguay, a full-service division of Venezuela’s state-owned development bank, is also focused on servicing its SME customer base, while working on its commitment to pursue Latin American integration. Scotiabank Barbados sponsors Bank on Me, a reality television show that provides mentoring and coaching for entrepreneurs who also compete for cash prizes.

After the Storms

Last year’s hurricane season devastated businesses on many Caribbean islands, impacting their respective banks and banking customers. Hurricanes Maria and Irma destroyed infrastructure, downed power lines and left many families homeless throughout the region. In Puerto Rico, Maria wreaked havoc on an already weakened economy, prompting Banco Popular de Puerto Rico to spring into action to tend to its customers.

The bank, which took a $67.5 million provision for storm-related losses, focused on getting its branches and ATMs operational as quickly as possible, despite the lack of electricity and telecommunications. Banco Popular took some unusual measures, including printing out balances and transporting receipts by car to rural branches. It gave customers a three-month grace period for loan repayments and is still helping to modify mortgage terms for storm victims.

In the US Virgin Islands, FirstBank Virgin Islands faced similar challenges, but managed to reopen branches and restart its ATMs, while also extending moratoria on loan repayments. The bank engages in community reinvestment to support low- and moderate-income individuals and families in education, financial literacy and housing. It also promotes economic, community and social development, and environmental and community revitalization.

Scotiabank Turks and Caicos also declared payment moratoria on mortgages, personal loans, credit cards and lines of credit, thereby contributing to hurricane relief efforts for islanders there. As the primary relationship bank for the local government, its role in such efforts has been substantial.

Despite the region’s challenges, many banks remain profitable. Venezuela’s Mercantil Banco Universal has operated successfully despite the country’s economic and political challenges, with an 831.3% year-over-year rise in total assets last year while its net credit portfolio rose by nearly 481% and its equity jumped by some 500%. In 2017, the bank also maintained its leadership in savings deposits, with a 17.1% market share. Naturally, such results are also driven by the Venezuelan market’s distortions and limitations.

Banco de Chile reported a 4.3% gain in net income and a 19.3% rise in profitability, despite its home country’s sluggish economy. The bank’s strategy was based on improving its customer experience and driving recurring income. It also worked to improve productivity, maintain adequate levels of risk-return and control expenses proactively.

Panama’s Banco General, which has held investment-grade ratings from Fitch and Standard & Poor’s since 1997, completed its 2015-2017 Strategic Plan last year, which included increasing its corporate and commercial loan portfolios by 6.3% and 5.8%, respectively. It also grew its branch network by 14.1% and ATM footprint by 39.4%. With sustainability efforts becoming increasingly important, the bank last year moved 2,000 employees to its new, environmentally friendly operations center last year.

Government policies in El Salvador have, in some cases, favored the banking sector by supporting overall economic performance. “The recent political agreements made regarding the financing of the government’s long-term debt, the national general budget and pension reform have generated an improvement in El Salvador’s rating, which is positive for the performance of the local economy,” says Ana Beatriz Marin Restrepo, CFO at El Salvador’s Banco Agricola.

Marin believes economic growth prospects, both globally and in Central America, are improving, although she concedes that recent US immigration-policy changes could have an adverse impact on local economies.

“Banco Agricola will continue to support Salvadorans in achieving their dreams, by participating not only in the economic sphere but as a manager of development, welfare and sustainability for communities and for the country.”

Santander remains optimistic about the Latin American region’s economic outlook. “The macro environment in Latin America is positive, and so is the context for the banking business, so we are optimistic,” says Santander’s Alvarez. “The digital revolution provides new, more efficient ways to provide products and services to people who have never before worked with a bank, and to do so more efficiently. We are confident we will continue to deliver profitability which will, in turn, enable us to support the communities where we operate.”

Global Finance (GF): What is the bank’s vision for its business in Ecuador?

Ricardo Cuesta Delgado: Banco de la Producción S.A. (Produbanco) has remained focused on the four pillars of a long-term strategic plan: execute responsible risk management; maintain our market dominance in corporate banking; expand in small and medium-sized enterprises, commercial middle market, personal banking, and credit and debit cards; and implement cutting-edge strategies in omni-channel banking. The latter has yielded stellar results in the face of mounting operating challenges for Ecuadorian banking.

We intend to achieve these goals by reinforcing our customer-centered culture, enhancing inter-relationships between different market segments and strengthening relationships with existing customers. We believe in utilizing the most innovative technology available and exploiting the strengths of the Produbanco brand and corporate image to push our objectives forward. The successes the bank recently achieved have been among its hardest won due to the backdrop of Ecuador’s languishing economy in recent years, so it would be reasonable to assume that the bank will prosper as oil prices rise and the nation begins to recover [economically].

GF: What are the main opportunities?

Ricardo Cuesta Delgado: We direct our priorities and efforts towards the digital-transformation plan. We are focused on short-term digital enhancements for our customer base and medium- and long-term flexibility to allow for the best and most automated user experience possible.

The corporate sector is the bank’s flagship market, one in which it is the country’s undisputed leader. Indeed, it is its excellence in this sector in particular that has earned Produbanco its reputation for possessing a avid lending appetite, despite the deterioration in operating conditions that continues to plague Ecuador’s banking sector.

In terms of potential growth areas, Produbanco has specifically identified SMEs as its main target—a sector that is also a crucial growth engine for Ecuador’s economy overall. Produbanco´s SME banking unit provides a fast and flexible service to its SME customers while providing an integrated advisory service that enables customers to capitalize on the expertise of the bank’s commercial team and enjoy a highly tailored portfolio of products that has been designed in response to the most common financial needs of SMEs.

Retail banking is another area in which Produbanco continues to shine ever-brighter. More recently, it has been mainly focusing on creating a single, cohesive brand experience for its customers through which they can potentially gain access to the various benefits and products that are available. In addition to specific banking divisions, technology plays a pivotal role in Produbanco achieving its stated objectives.

Our growth strategy is focused on maintaining our market share in our core markets and growing our customer base in other markets. We have been able to increase our market share because of our incremental growth in cities other than Quito, Ecuador´s capital city, which is our core market. The local markets in which we have grown include Guayaquil, Cuenca, Manta and Ambato, among others.

The duo wasted little time, acting switfly to lift currency controls to jump-start the nation’s ailing economy. The timing of the December 16 move took markets by surprise, which means Prat-Gay’s immediate challenge is to keep the peso from slipping further. It declined sharply on news that the government was ending a policy of strict limits on the sale of US dollars. Equally important for Prat-Gay, is forging a deal with so-called holdout bondholders from the country’s record $100 billion debt default in 2001.

Moody’s, which revised its outlook on Argentina’s Caa1 rating to “positive” after Macri’s election, says resolving the holdout standoff is crucial for Argentina to borrow abroad. The government has been locked out of international debt markets since the default but needs access to fresh funds as it unwinds capital controls amid dwindling foreign reserves and weak commodity export prices.

Some US hedge funds and other holdouts have refused to join 93% of the country’s creditors in restructuring its debt, demanding 100% of the face value of their bonds. A US court has blocked payment to other debt holders until the holdouts are accommodated.

Prat-Gay headed the nation’s central bank from 2002 to 2004, a period that saw inflation fall to 5% from 40% and GDP grow robustly. Inflation has since soared to about 25% The budget deficit is above 6%, and the peso (had been) massively overvalued.

An economist with degrees from Argentina’s Catholic University and the University of Pennsylvania, Prat-Gay headed a JP Morgan Chase unit in London and co-founded Tilton Capital, a Buenos Aires—based asset management firm.

Moody’s said it “expects the new administration to devote efforts to improving the economic and institutional environment… through a series of reforms aimed at tackling persistently high levels of inflation and lack of accountability.”

Fitch predicted Macri’s market-friendly policies will improve the banking environment. “The new government is expected to intervene in banking matters less, and this could potentially alleviate market distortions and improve long-term funding access over the medium term,” it said.

Corruption has long been part of the cost of doing business in Latin America. Yet new scandals coupled with the region’s economic slowdown have unleashed a wave of protests demanding greater accountability. Analysts say the current unrest may finally force governments to implement new laws and regulations to boost transparency, potentially changing the region’s business environment. Next year could mark an important turning point.

Latin American GDP growth is declining. The UN Commission for Latin America and the Caribbean (Eclac) predicts regional growth of just 0.15% this year, compared with 4.6% average growth from 2003 to 2008. Brazil, the region’s largest economy, could post a nearly 3% GDP contraction this year and shrink another 1% in 2016. And Venezuela, whose failed economic policies prompted a 4% GDP contraction in 2014, is in for further declines in 2015–2016.

The bleak economic outlook has made the region’s governments less popular. A poll by Chile-based Latinobarómetro showed average government approval ratings in Latin America at 47%, down from 60% in 2009. Recent corruption scandals will continue to erode support into 2016, as governments seek to maintain credibility and tackle the political backlash.

In Brazil, an ongoing scandal has grabbed international headlines. Lawmakers and government officials are alleged to have taken an estimated $5 billion in kickbacks from construction companies for approving overpriced contracts at state-owned oil company Petrobras. Several key officials, including leaders of both houses of Congress and a former president, face charges. Protesters are calling for president Dilma Rousseff’s impeachment.

A 2010 report by the Federation of Industries of the State of São Paulo estimates corruption costs Brazil 1.4% to 2.3% of its GDP annually.

Among companies implicated in the kickback scandal are Brazilian construction giant Odebrecht, which has received large infrastructure contracts from Petrobras, and Britain’s Rolls Royce, which supplies power turbines for offshore oil platforms. Petrobras’s investment budget was slashed by 30% for 2016, to $19 billion. Falling oil prices, a weakened currency that slipped 35% against the dollar this year, and a sovereign downgrade in September that boosted borrowing costs were other factors in the cut.

“I have never felt, in 35 years of studying Brazil, less confident of what is going to happen,” says a US-based analyst who asked not to be named. “People are disgusted by political corruption, but whether or not there will be a direct path to deep reform is not at all clear,” she adds, noting that opposition leaders who spearheaded the corruption investigation are now being implicated as well.

Brazil’s Clean Company Act of 2014 may be a first step toward greater transparency. The law makes companies responsible for corrupt practices by their employees, penalizing both those giving and taking bribes. Meanwhile, in Mexico, where corruption allegations are pending against president Enrique Peña Nieto and his wife, Congress is pushing anti-corruption reforms including a new system where several government agencies and the judiciary jointly oversee corruption cases.

Corruption scandals are not expected to affect Mexican growth, however, with GDP predicted to expand 3.5% this year on the heels of a US recovery and the results of reforms that include opening state-owned oil company Pemex to private investment.

“Transparency is the first step in combating corruption, but it doesn’t guarantee anything unless there is an end to impunity,” says Marco Fernández, researcher at México Evalúa, a public policy think tank in Mexico City, and professor at Mexico’s Instituto Tecnológico de Monterrey. “If these new legal frameworks are not accompanied by a strengthening of institutions that enforce laws, we won’t get very far,” adds Fernández, who has consulted on corruption issues for the Inter-American Development Bank, the OECD and the United National Development Programme. He advises that anti-corruption agencies be staffed primarily by technical experts.

“In the developing world, corruption is public enemy number one,” World Bank Group president Jim Yong Kim said at an anti-corruption event in 2013. The World Bank estimates as much as $1.5 trillion is lost to corruption worldwide each year. Joel Turkewitz, program coordinator for the regional governance hub at the World Bank, says the problem includes not only payoffs but also deeper, institutionalized inequalities, like trade and tax policies “that are shaped to benefit particular groups.”

Turkewitz feels there is a growing disincentive to engage in corruption globally. “What we’ve been watching is a change in risks for companies engaging in corruption,” he says. He noted the risk of both market liability and criminal liability, including threats of prosecution in other jurisdictions. He points to the UK’s bribery law, which “for the first time makes an affirmative responsibility for companies to know what their partners are doing since they can be held liable for their actions.” Turkewitz predicts similar steps will be taken in Latin America.

The focus has been primarily on Brazil and Mexico, but Guatemala offers hope that Latin America may be on a new path. Following a corruption scandal earlier this year in which president Otto Pérez Molina and other officials were accused of implementing a bribery scheme at the customs bureau, Guatemalans took to the streets to protest. Perez stepped down and is now in jail, along with his vice president, awaiting trial. The movement has spread to neighboring Honduras, with calls for president Juan Orlando Hernández to resign amid a scandal involving corruption at the Social Security Institute.

“I believe that what appears to be a rise in corruption in recent years is actually the result of reforms and changes implemented mainly in the last 15 years that are starting to show positive effects,” says Alejandro Salas, regional director for the Americas at Transparency International. Salas contends corruption is more visible today on account of laws providing greater access to public information, the use of technology for e-government, improved procurement systems, availability of social media as an alternative information channel, and the sophistication of organized civil society. These factors, he says, are “making it increasingly easier to detect corruption, talk about it and stress the damaging effects it brings.”

How business will react to the changing environment is yet to be seen, as many new laws and regulations won’t go into effect until next year. Salas believes companies will react differently. Some, he says, may take their investments elsewhere. Some may view the push for greater accountability with optimism, while still others­—along with some governments­—may take an opportunistic approach and seek to differentiate themselves from other players in the region by playing fair.

“Good behavior is good business,” said Ban Ki-moon, UN secretary-general, last year. “Business groups can convert anti-corruption action into firm support for sustainable development.” In Latin America, it seems the message is being heard loud and clear.

Generally speaking, monetary policy does not come in a one-size-fits-all model. Since the global financial crisis, however, central bankers in many countries have adopted a similar tack. They’ve stopped acting as inflation fighters. Instead, they’ve embraced unconventional policies to stave off deflation, which remains a persistent problem. And they’ve had to do this while wrestling with volatile swings in free-floating currency rates. Many countries, particularly those in emerging markets, have drifted toward flexible, but managed, exchange rate systems.

And while monetary policy is an inexact science, central bankers on the whole are getting better at their jobs. “Central banking as a profession has come a long way, striving to adapt itself to the challenges faced by economies over time,” says Stanley Fischer, vice chairman of the Federal Reserve and former governor of the Bank of Israel. “And both the practice and theory of central banking will continue to evolve.”

They’ll have to. Global markets are increasingly intertwined, which adds to the complexity of keeping economies on an even keel. The appreciation of the US dollar, for one, has kept central bankers in emerging markets on their toes. Cheaper exports are a good thing, pricier imports are not. And central bankers in developing countries have been holding their breath, anticipating what will happen when the US federal funds rate goes up.

The wild swings on global stock markets that commenced in late August put the Fed’s move on hold. But Fischer, speaking at a roundtable for African central bankers at the University of Oxford, noted that the eventual rise in the Fed’s overnight rate will likely trigger higher interest rates around the world. “The increase in global interest rates could cause investors to adjust their portfolios, triggering capital outflows from emerging market and developing economies,” he said.

That could well be the case in Asia. Many central banks in the region, including those of China and India, have cut interest rates this year and devalued their currencies to promote growth. Higher interest rates in emerging markets and developing nations will make those countries less attractive to asset managers. Fischer believes the US central bank is well aware of possible damage to other economies from its policy moves, however. “In an interconnected world,” he says, “fulfilling the Fed’s objectives requires that we pay close attention to how our own actions affect other countries, and how developments abroad, in turn, spill back into US economic conditions.”

Case in point: Many African nations were able to issue bonds in global markets in recent years—some for the first time ever. But higher interest rates could limit these countries’ ability to finance essential projects or fund budget deficits on favorable terms. The slump in commodities prices—and the surge in the US dollar—will make it more difficult. “The reduced ability of governments to finance their needs will likely increase the challenges faced by central banks in their efforts to assist the economic growth and development agendas of their national governments,” Fischer notes.

Typically, a central bank’s choice of monetary policy framework depends on the objectives it aims to achieve, on the challenges that an economy faces, and on the structure of the financial markets and the economy in which it operates, according to Fischer. In many developing countries, financial systems remain small and are not diversified. That hinders the ability of central banks to conduct open-market operations, he says. In these cases, changes in policy rates have a limited effect on the economy and other interest rates. Therefore, as developing countries seek to modernize their policy frameworks, Fischer explains, they must engage in a parallel effort to develop the market institutions needed to carry out monetary policy effectively.

Of course, every country faces a different economic situation. And every central bank has to take a wide range of factors into account when formulating policies aimed at remedying problems.

As our Central Banker Report Cards show, some central bankers are doing a better job than others at making the right moves. We assessed 74 governors on an A to F scale. Nine governors received an A. Three central bankers—all from Latin American countries—got a D. None of the 74 merited a failing grade.

Global Finance has published the report cards since 1994. The rating is based on, among other things, inflation control, economic growth, currency stability and interest-rate management, as well as the determination of central bankers to protect their independence in the face of political pressure.          

Vanoli was appointed to halt the slide in the peso, but the currency continues to plunge. In late August, the black market exchange rate hit a record low of 16 per dollar; the official rate was 9.3. Nevertheless, Vanoli insists the currency is not overvalued. Instead, the central bank is using international reserves to defend the official rate. Market analysts predict a new government in December will pursue a devaluation and lift currency controls. The central bank has no autonomy, and Vanoli is believed to be defending the peso for political reasons. Meanwhile, private economists put the country’s annual inflation rate at close to 30%. At this point, it’s unclear which is dropping faster: the value of the peso or the credibility of the country’s central bank.

Despite lower energy prices, which are cutting into gas export revenues, the Bolivian economy remains strong. The central bank has worked to keep public debt levels under control, although the deficit is still on the rise. International reserves are growing, however. In fact, the reserve funds are among the highest in Latin America as a percentage of GDP. The strong economy has vindicated Zabalaga’s foreign exchange and monetary policies, which have, in turn, helped Bolivia shield itself from energy market price volatility. Fitch upgraded Bolivia to BB in August, citing strong fiscal and external balance sheets.

Times are tough right now in Brazil. Nevertheless, Tombini insists the country’s GDP rate will go up in 2016 and the inflation rate will go down. Experts say he’s got it wrong on both scores. In a survey in August, local economists predicted a 0.24% GDP contraction and 5.5% rise in prices next year. Indeed, Brazil is bracing for recession. Investors contend Tombini was pressured by president Dilma Rousseff to slash interest rates to untenable levels during her first term, even as her administration continued to boost spending. In July the central bank boosted the benchmark Selic rate to a nine-year high to curb inflation.

Canada will be lucky to eke out even modest economic growth this year after slipping into recession in the first half of 2015. The Bank of Canada did its part to stimulate the economy by cutting its benchmark rate in January, and again in July. The Canadian dollar fell to its lowest level since 2009—the last time Canada was in recession—but the country’s export picture remains bleak. The drop in oil prices, the central bank’s dovish monetary policy and the uncertainty surrounding the October election have not improved the situation. The central bank’s economic forecasts have repeatedly proven to be overly optimistic.

Vergara’s cautious monetary stance has helped Chile contend with an economic slowdown that is expected to yield GDP growth of just 1.8% in 2015 and 1.9% in 2016. While expressing concerns about the current economic situation in China, the US interest rate outlook and weak growth among its Latin American neighbors, Vergara says Chile’s macroeconomics remain sound. The central bank began reducing interest rates ahead of the slowdown and expects to bring the inflation rate down to 3% next year. It’s currently above 4%.

With nearly half of the country’s export revenues coming from petroleum sales, weaker oil prices have hit Colombia hard. In fact, the current-account deficit may reach 5.8% in 2015, the largest gap since 1980. Still, Uribe gets high marks for keeping the economy on track; the IMF predicts the GDP will still grow by 3.4% this year. The central banker has also kept inflation under control and effectively managed the fallout from the peso’s steep slippage. By avoiding the temptation to use interest rates to curb inflation, Uribe has helped Colombia steer clear of a recession—a real achievement given what’s going on in several other countries in Latin America.

Costa Rica’s economic prospects remains mixed. Policymakers have been encouraged to continue slashing the official interest rate—which currently stands at a nine-year low—to stave off a deflationary spiral. Lower interest rates have not yet sparked the expected spurt in GDP growth. In fact, the central bank in July cut its 2015 expansion forecast from 3.4% to 2.8%. The government’s soaring fiscal deficits have led to several credit downgrades. Foreign direct investment, which fell in 2014, is expected to remain flat. Castro is working to keep the ship steady.

It is too soon to grade Martinez—he took over as head of the central bank in August. But he is not a newcomer to the institution. Martinez, an economist, chaired the bank’s board of directors starting in 2003. He has also occupied other government posts, including undersecretary in the National Planning and Development Ministry. Martinez’s challenges include overseeing implementation of the government’s virtual currency, which was rolled out this year, making Ecuador the first country in the world with its own electronic legal tender.

In May, just seven months after being picked to lead Guatemala’s central bank, Suárez was arrested on charges of fraud. The central bank chief, who also sits on the board of the country’s Social Security Institute, allegedly took a kickback for helping a Mexican vendor win a $15.7 million government contract to supply dialysis services to 530 patients. The arrest came as Guatemalans also called for the impeachment of president Otto Pérez Molina, who resigned in Sepember as his administration was engulfed in a widening corruption scandal. Suárez, who was previously Guatemala’s representative to the IMF, received a vote of confidence from the monetary policy board.

While Mexico continues to take its cues from the US Federal Reserve, Carstens has shown independence in reacting to a weakening peso and potential inflationary spike. The central bank is selling dollars to support the currency, but Carstens says he will not depend exclusively on foreign exchange interventions. Carstens served as secretary of Finance from 2006 to 2009 and took bold steps to reinvigorate Mexico’s then-flagging economy. As the governor of the Bank of Mexico, he faces some stiff challenges, including weak oil prices and president Enrique Peña Nieto’s dwindling popularity. GDP in Mexico is expected to grow 1.7% to 2.5% this year.

Fernández, who has headed the central bank since 2013, is a key member of Paraguay’s economic team, which has turned the nation’s economy into one of the region’s star performers. Despite weakened economies in neighboring Brazil and Argentina—the two largest markets in the Mercosur trading bloc—Paraguay is poised for 4% growth this year. That’s an accomplishment, considering the central bank boss has kept the reins on inflation. The rise in consumer prices remains within the central bank’s 4.5% medium-term target. Fernández is eyeing the potential impact of global currency volatility.

Velarde’s prudent—and often countercyclical—policies have paid off. Peru boasts the region’s lowest inflation rate (4%), while posting one of Latin America’s highest GDP growth rates (around 3% this year). Although often breaking through the 1% to 3% official inflation target, the central bank has kept CPI close to the band. The central bank recently tightened forex controls and increased dollar sales to curb the depreciation of the nuevo sol. Velarde continues to act decisively to face domestic and global risks.

Janet Yellen finessed the difficult task of bringing quantitative easing to an end and preparing the markets for the Federal Reserve’s gradual tightening of monetary policy. The data-driven Fed has overseen a steady decline in the US unemployment rate without becoming overly concerned about a potential flare-up of inflation. Yellen, the first female to head the Fed, has kept a steady hand on the monetary tiller. She likely will be a strong defender of the Fed’s inflation target when the time comes to dampen expectations of rising prices. Meanwhile, the Fed head will undoubtedly act with caution and with a clear aim to meet the Federal Reserve’s long-term goals of maximum employment and 2% inflation.

Uruguay’s central bank gets high marks from local leaders based on its credibility and for implementing policies that support the financial system’s ongoing stability. Bergara argues that the country’s economy is strong enough to tackle regional and global challenges, including GDP weakness in neighboring Brazil and Argentina, a strengthening US dollar and the recent Chinese renminbi devaluation. Inflation, however, remains the bank’s chief concern. The annual rate is hovering near 9%, versus the official 4% to 6% target.

The central bank ceased publishing economic data in late 2014, sparking speculation about the full extent of the country’s economic tailspin. In December the government put the inflation rate at 68%. The figure may now be closer to 100%. Barclays predicts the CPI will rise to 200% by year-end. The government has tried to ease the crisis by imposing price controls on basic goods. But widespread shortages—and a 90% depreciation of the bolívar on the black market—are not encouraging signs. With more than 90% of Venezuela’s export revenues generated by oil, the picture is not pretty.

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Kallaur was appointed chairman of the board of the National Bank of the Republic of Belarus in December. About three months later, an IMF mission to the country stressed the need for the central bank to follow through on measures to move toward a more flexible exchange-rate regime and to tighten monetary policy. The Fund also wants the bank to fully implement a money-targeting framework to bring inflation back to single digits. That won’t be easy. In 2014 the inflation rate nearly hit 18%. The World Bank projects negative growth for Belarus this year. The Belarusan ruble has fallen by approximately 40% against the US dollar, and according to the World Bank, currency pressures persist because of the country’s low level of reserves.

Radev, a senior economist at the International Monetary Fund, was appointed as new governor of the Bulgarian National Bank in July. His predecessor, Ivan Iskrov, reportedly resigned over the handling of Corporate Commercial Bank. The financial institution was taken under central bank supervision after an audit found irregularities in its operations. The bank’s management was eventually accused of operating a Ponzi scheme, and its chairman fled the country. It’s no surprise, then, that one of the first things Radev told reporters following his appointment was that he would focus on bank supervision, crisis management and asset quality in order to restore confidence in the domestic financial system. Following the failure of Corporate Commercial Bank, liquidity measures were introduced by the central bank, which helped avert a run on domestic banks by depositors. Radev’s ability to support a strong, independent and accountable Bulgarian central bank will be critical, says the IMF.

Singer is not the only central bank governor who has resorted to unconventional monetary policies in the past few years to deal with external shocks. But he has been one of the more successful at avoiding deflation. The Czech National Bank boss realized early on that conventional monetary policy instruments—such as long-term interest rates—needed to be supplemented with an increased focus on exchange rates to keep inflation within the central bank’s 2% target range. Singer identifies the weakening of the koruna as one of the keys in the Republic’s economic turnaround. He says he can now see “the light at the end of the tunnel.” It’s not an oncoming train, either.

The Danish krone’s newfound safe-haven status has put Rohde through the ringer. To stem capital outflows, he’s had to intervene over the past 12 months in foreign exchange markets and bring interest rates on certificates of deposit into negative territory. Rohde’s willingness to wade into the FX markets appears to have paid off: The exchange rate for the krone has remained relatively stable. The Danmarks Nationalbank anticipates that the country’s GDP growth rate will rise to about 2% this year.

Draghi has proven that he is able to deliver the goods under pressure. Although he was slow to introduce quantitative easing across the eurozone, the ECB did respond quickly to the latest crisis in Greece, extending emergency funds to keep Greek banks afloat. The ECB’s actions contained the problem, preventing the crisis from spreading to the rest of Europe. Draghi’s bond-buying program—and his statement that he would do whatever it takes to defend the single currency—continue to resonate as Europe dips in and out of crisis. Draghi has demonstrated that he is ready to use, albeit reluctantly at times, all instruments at his disposal to defend the euro.

While other Eastern European countries have eased off on interest rate cuts, moderate levels of inflation and a desire to boost economic growth have seen the Central Bank of Hungary take a different tack. Indeed, the bank has continued to chip away at deposit rates, which were cut by 15 basis points to 1.35% in July. The economic recovery in the country is still protracted, though. By maintaining a relatively loose monetary policy, Matolcsy hopes not only to keep inflation within the target range but also to provide the necessary support for sustainable growth. Further easing of rates seems unlikely in the short term, but the central bank has given itself enough room to maneuver if it needs to take further action.

Iceland’s central bank governor knows all about crisis management. In 2008 the Icelandic economy went into a meltdown as banks collapsed under the weight of huge debt loads. The country’s economy appears to have turned a corner, though, with 4% GDP growth predicted for this year. But Guðmundsson knows his job is not done yet. To stem growing inflationary pressures from wage increases, the bank’s monetary policy committee upped its benchmark rate by 0.5 percentage points to 5.25% in June, then to 6.25% in August. Intervention in the FX markets has also prevented the exchange rate for the króna from rising on the back of increased capital inflows. But Guðmundsson’s biggest challenge may be what to do about the capital controls that were put in place in response to the 2008 crisis. The central bank has been toying with the idea of lifting controls for some time in order to encourage economic growth, but a deal with the foreign creditors of collapsed Icelandic banks has still not been finalized.

Olsen responded swiftly to the decline in oil prices last December by cutting the key policy rate to 1.25% to counter the negative impact on the country’s growth outlook. In June the bank cut the rate by another 25 basis points to 1% in response to higher unemployment and a deteriorating economic outlook. Olsen hinted that he might make further cuts to the base rate in autumn. He may have to. Norway’s economy remains in slow-growth mode, owing to low oil prices—a problem that doesn’t seem likely to go away anytime soon.

Last year’s grade for Belka (B-) was overshadowed by allegations about the central bank’s independence from the government. Those allegations came after a Polish magazine released a secret recording of the central bank governor purportedly discussing the removal of the country’s Finance minister. Belka’s six-year term as governor is due to end next June. These days, he appears to be spending more time defending Polish banks—which withstood the global financial crisis without having to be propped up—against the threat of increased bank levies. With inflationary pressures expected to remain low, the bank kept its reference rate of 1.50% unchanged at its July monetary policy council meeting.

Isărescu is one of the longest-serving central bank governors, having headed the National Bank of Romania since 1990. With inflation at –1.67%, well below the bank’s 2.5% target, Isărescu responded by lowering the monetary policy rate by another 0.25 percentage points in May before maintaining the key rate at a historical low of 1.75% in July. The cuts, along with a reduction in minimum reserve requirements, appear to have had the desired effect, boosting household and corporate lending. In a March 2015 report, the IMF recommended that the central bank move toward a fully-fledged inflation-targeting regime while still leaving room for further monetary policy easing in light of deflationary pressures.

Nabiullina has had her work cut out for her since becoming the first woman in a G8 country to head a central bank. She has had to weather the impact of Western sanctions against Russia for the country’s incursions into eastern Ukraine. So far, she has managed to limit the damage—particularly on the depreciating ruble, which has also been hit by falling oil prices. Unlike her Western counterparts, who have resorted to quantitative easing to revive growth in their economies, Nabiullina is relying on interest rates to do the trick. She has continued to reduce the bank’s benchmark rate, which at July stood at 11.0%. Further cuts are anticipated as long as inflationary pressures remain in check. Internal pressures on prices are unlikely to be an immediate threat, given the slackening in domestic demand.

Ingves has indicated that monetary policy remains flexible in case unexpected inflationary pressures arise. After a long period of low prices in Sweden, however, the rate of inflation is expected to return to the bank’s stated 2% target next year. The rate as of September 1 stood at –0.1%. Like his counterparts in Switzerland and Denmark, Ingves has had to manage inflation amid the flood of money pouring into the eurozone as a result of the European Central Bank’s quantitative easing program. But so far, the Sveriges Riksbank appears to be doing everything it can to ensure that prices remain on an upward trajectory, cutting the repo rate by 0.10 percentage points to –0.35% at its July meeting. Bank authorities believe they have enough room to maneuver, if needed, in terms both of rates and of further extensions of the government’s bond-buying program.

Since becoming chairman of the Swiss National Bank, Jordan has been forced to resort to extraordinary measures to defend the franc against strong capital inflows. The central bank initially defended the currency floor of SFr1.20 per euro, but fluctuating market conditions both at home and abroad forced Jordan to abandon the minimum exchange rate. The Swiss franc still remains overvalued. But Jordan is now using interest rates, which are in negative territory, to contain upward pressure on the currency’s value. Inflation is expected to remain in negative territory until 2017. Jordan and the bank, however, believe it is merely part of an adjustment following the removal of the exchange rate floor, rather than a longer-term deflationary spiral.

Leading up to Turkish elections in June, doubts surfaced  about Başçi’s independence from Recep Tayyip Erdoğan’s AKP government. Erdoğan tried to influence the central bank to implement rate cuts to reduce the cost of borrowing. But after the AKP Party failed to secure a parliamentary majority in the vote, Başçi appears to be reasserting himself. In a welcome move, the Turkish central bank is looking at simplifying its unconventional monetary policy, which has used an interest rate corridor and reserves to contain financial risks and instability from capital inflows. Eventually, the one-week repo rate is expected to be the true indicator of the central bank’s main monetary policy stance. Başçi has maintained the bank’s tight liquidity policy to try to manage inflation, which in July stood at 6.8%—the lowest level in 14 months.

The appointment in July, 2014 of former investment banker Valeria Gontareva as central bank governor was welcomed by foreign investors. Gontareva hasn’t wasted any time in trying to revive the country’s economic and banking problems, but it is perhaps too early to tell how she’ll ultimately tackle the problems. Gontareva has already hinted at easing monetary policy if inflation continues to decelerate. She’s also pointed to signs of a gradual economic recovery. But she has a long road ahead of her before her policies take hold. The bank is now focused on growing its reserves and implementing an inflation-targeting regime. Changes to the banking sector are also in Gontareva’s sights with her drafting of a “Strategy for Reforming the Banking System of Ukraine—2020.”

Great expectations surrounded the appointment of Carney to the Bank of England governorship. As the first outsider to be appointed to the role—and given his track record in containing the effects of the global financial crisis on the Canadian financial system—Carney was viewed as somewhat of a miracle worker. But he still seems to be finding his feet at the Bank of England. While Carney has ushered in a new era of transparency for monetary policy decisions, he may be overdoing it. Hinting this summer about a possible rate rise, Carney may have jumped the gun, given the crisis in Greece and the global impact of a slowing Chinese economy. At the moment, Carney appears to be a spectator to economic events taking place around him, with little opportunity so far to exert any real influence on the outcome.

After keeping rates unchanged for 18 months, the Reserve Bank of Australia pushed the cash rate deeper into record-low territory, with quarter-percentage-point cuts in February and May. Falling commodities prices and a strong currency at the time argued in favor of lower rates to stimulate economic growth. The central bank has a tricky task in balancing a high unemployment rate against a booming housing market, however. Inflation has been held within the RBA’s 2% to 3% inflation target. The economy depends heavily on demand from China for Australia’s natural resources. A potential hard landing in the People’s Republic would sorely test Stevens’ abilities.

Elman Rustamov was reappointed in April as chairman of Azerbaijan’s central bank, a position he has held since 1995. In February, the monetary authority abandoned the peg between the country’s currency, the manat, and the dollar. It now targets the manat to a basket of dollars and euros. Oil and gas account for about 95% of Azerbaijan’s exports and 75% of the government’s revenues. The slumping price of oil and spillover effects from Russia’s economic downturn have restrained growth, prompting the central bank to cut its refinancing rate by 50 basis points to 3% in July. The country’s underdeveloped financial sector is made up primarily of state-owned institutions, and access to credit is difficult for small and medium-size enterprises—not exactly ideal for promoting long-term growth.

Despite nationwide strikes, or hartals, early this year, Bangladesh has managed to maintain a real GDP growth rate above 6%. Bangladesh Bank governor Atiur Rahman instructed financial institutions to lower interest rates on loans after the government cut rates on national savings certificates, which are backed by the state. As political tensions eased, garment exports recovered, while remittances from overseas workers continued to grow. The country’s economic fundamentals appear to be improving, with moderate inflation and rising foreign currency reserves. Nonperforming loans remain a problem, however, particularly at government banks.

The dramatic slowdown in China’s economic growth has sent shock waves through global financial markets this year. The country’s central bank has attempted to limit the damage. It has lowered interest rates and reserve requirements and devalued the renminbi—a controversial move that has sparked concerns about a possible currency war. It also introduced a new monetary policy tool, the pledged supplementary lending facility, to allow it to acquire local government debt. The monetary easing was also designed to halt a disastrous plunge in prices on local stock exchanges and to replace capital that left China. It hasn’t been particularly successful. Amid the volatility, the government is pressing ahead with efforts to liberalize China’s financial markets.

The Hong Kong Monetary Authority intervened heavily in April to defend the local currency’s peg to the dollar. The de facto central bank bought nearly $7 billion to stop a rise in the Hong Kong dollar after China made it easier for mainland funds to purchase Hong Kong stocks. The HKMA remains committed to keeping the local currency in a range of HK$7.75 to HK$7.85 to the US dollar. Real GDP grew 2.5% in 2014, but growth slowed this year, owing to weak exports and slower growth in tourist arrivals. Although trade and financial services are key sectors of the economy, the government is encouraging technology start-ups and creative industries, such as film production.

India’s economy was blessed this year with a good monsoon and falling oil prices, which helped to bring down the current-account deficit. The rupee has remained relatively steady in the face of steep declines in other emerging markets currencies. By all rights, Reserve Bank of India governor Raghuram Rajan could take some of the credit for the rupee’s performance. However, he says the “economic recovery is still a work in progress.” Rajan fought successfully to protect the RBI’s independence when the government sought control of the monetary policy committee. At the same time, he delivered a series of rate cuts that boosted real GDP growth to 7.5% in the first quarter, surpassing that of China.

Bank Indonesia unexpectedly cut its policy rate by a quarter point to 7.5% in February, as officials expected inflation to continue easing. Instead, inflation rose and economic growth slowed. With the rupiah sinking to a 17-year low in July, the central bank prohibited foreign currencies from being used in domestic transactions. President Joko Widodo, who took office last October, responded to weak commodity export prices by seeking to transform the economy through industrialization. He says he needs more time to accomplish his goal. Meanwhile, the World Bank in July lowered its 2015 real GDP growth forecast for Indonesia to 4.7% from 5.2%.

After two decades of fighting deflation, the Bank of Japan has once again failed to meet its 2% inflation target. Governor Kuroda remains optimistic that the BOJ will hit the target in the fiscal year beginning in April 2016, but that is unlikely to happen without additional monetary easing. The central bank in July lowered its GDP growth forecast to 1.7% for the current fiscal year to March 2016—but failed to offer any new economic stimulus. The weak yen has sparked a pickup in exports, but consumer spending has declined following last year’s sales tax increase. The country’s economy may gradually gain momentum if wages rise, but it is difficult to rely on the BOJ’s forecasts, which have routinely missed the mark.

Kazakhstan’s economy, the largest in Central Asia, has taken a one-two punch from falling oil prices and declining trade with Russia, its largest trading partner. The central bank widened the trading band of the country’s tenge currency against the dollar in July, instead of opting for a snap devaluation. It was under pressure to let the tenge weaken after the Russian ruble fell 46% last year. Governor Kelimbetov says the National Bank would like the tenge to float freely in the medium term. Growth in real GDP is likely to slow to about 1.5% to 2% this year, from 4.3% in 2014. The slump in the country’s economy has forced the government to postpone many infrastructure projects.

Governor Zeti, whose current five-year term ends next year, is fighting to defend the central bank’s independence. Prime minister Najib Razak has been ensnared in a scandal over billions of dollars that are purportedly missing from a sovereign wealth fund. Not surprisingly, the alleged wrongdoing has roiled the country’s financial markets. Nevertheless, real GDP growth has remained resilient. Bank Negara Malaysia left its overnight policy rate unchanged at 3.25% at its July meeting, amid a steep decline in the ringgit. Officials said monetary policy is accommodative and will continue to support economic growth. A 6% goods and services tax came into effect in April and brought a short-term rise in headline inflation, but underlying inflation remained constrained. The decline in energy prices will lower Malaysia’s export revenue, but oil and gas constitute only 14% of the country’s exports.

After raising interest rates repeatedly in 2014, the Reserve Bank of New Zealand changed course and lowered rates in June and July, as prices for its dairy exports continued to weaken. The country earns more than $10 billion a year, or one-third of its export sales, from the dairy industry. Real GDP growth has slowed to around 2.5%, and inflation is below the central bank’s 1%-to-3% target range. New Zealand is tackling its overheated housing market with restrictions on loans and a new capital gains tax on foreign investors. The cut in the official cash rate in June—a quarter point—was the first rate reduction in more than four years.

Despite a shortage of electricity and a Taliban insurgency, Pakistan’s real GDP is continuing to grow at a rate of around 4%. The central bank cut its benchmark interest rate by a full point in May and a half point in July to 6.5%, the lowest in 42 years. It said the cuts were designed to stimulate economic growth at a time of slowing inflation, owing mainly to weak oil prices. The State Bank of Pakistan says it expects inflation to remain low. Overcoming persistent electricity outages and improving security are the keys to attracting investment and enabling sustained economic growth, the central bank says.

Amando Tetangco has kept a steady grip on the monetary reins, while the economy of the Philippines has galloped ahead, and with declining oil prices, inflation has remained below the central bank’s 2%-to-4% target range. At a time when many other emerging markets central banks provided monetary stimuli, Tetangco decided that domestic demand was strong enough to maintain the economy’s momentum. Liquidity is ample and higher public spending will support additional growth, he says. At its June meeting, the central bank kept the rate it pays lenders for overnight deposits at 4%, and the rate for special deposit accounts at 2.5%.

Singapore’s economy slowed abruptly in the second quarter, registering an annual real GDP growth rate of 1.7%. The weaker-than-expected performance could prompt an easing of monetary policy in October. The Monetary Authority of Singapore usually releases policy statements twice a year, in April and October. The MAS made an exception in January, however, when it loosened its grip somewhat and reduced the slope of the trading band for the Singapore dollar. The de facto central bank uses the exchange rate as its main monetary policy tool. The currency is pegged to a basket of currencies of Singapore’s main trading partners.

The Bank of Korea cut its base rate by a quarter point in March and another quarter point in June, to a record low 1.5%. The monetary policy committee cited sluggish exports and weak domestic consumption following a deadly outbreak of Middle East Respiratory Syndrome (MERS) as reasons for the rate cuts. In July the government declared an end to the MERS outbreak, which claimed 36 lives and hit the retail and tourism industries. Officials in Seoul announced a $20 billion fiscal stimulus package to support businesses affected by the crisis. South Korea posted a record current-account surplus in the first half of 2015, despite falling exports, as lower oil prices cut its energy import bill.

Arjuna Mahendran was appointed central bank governor in January by Sri Lanka’s newly elected president, Maithripala Sirisena. The central bank cut its benchmark rate by a half point to 6% in April. It said it expected GDP growth to slow to 7% this year from 7.4% in 2014. The Sri Lankan rupee fell to a record low in June. But Mahendran, a former chief investment officer at the wealth management arm of Dubai-based Emirates NBD, said the country should let market forces determine the exchange rate. The central bank kept its benchmark rate unchanged at its June and July meetings, after Sirisena called for early parliamentary elections.

Taiwan’s economy is expected to outperform Hong Kong, Singapore and South Korea once again this year. The central bank left its benchmark interest rates unchanged in June, as low oil prices kept inflation well below the official target, helping to spur domestic demand. The central bank has not changed its policy rates since 2011, although it intervenes regularly in the foreign exchange market to maintain orderly conditions. It has continued to use open-market operations to manage liquidity. Real GDP growth was 3.8% in 2014 but could slow marginally this year as a result of a sluggish global economy and weakening overseas demand for electronic components. The unemployment rate fell to 3.6% in May, the lowest in 14 years.

Thailand’s military-led government in July selected Veerathai Santiprabhob as the country’s new central banker, effective October 1. Santiprabhob is a former International Monetary Fund economist with a Harvard PhD. He replaces Prasarn Trairatvorakul, who was ineligible for a second term because he is more than 60 years old. The Bank of Thailand cut its official repurchase rate by a quarter point in both March and April to 1.5%, citing weaker growth in China and local drought conditions. The cuts were aimed at weakening the relatively strong Thai baht to boost exports, which account for two-thirds of GDP. The economy is continuing to struggle after last year’s military coup, with gross domestic product expanding by just 0.9%.

Uzbekistan’s opaque economy was hit by the recession in Russia, which has lowered remittances from transient workers. Gazprom has cut its purchases of Uzbek natural gas, but China could take up some of the slack. The central bank lowered its refinancing rate by a full point to 9% in January, although GDP growth for 2014 was reported at 8.1%. Rising public investment is expected to keep the command economy growing at a relatively fast pace this year. The government says inflation will be held to 5.5% to 6.5%. The country is an oil importer and will benefit from the drop crude prices.

The State Bank of Vietnam devalued the dong against the dollar by 1% in January and May, hoping to maintain the export competitiveness as other regional currencies declined. Vietnam’s real GDP expanded by 6% last year, the most in three years, thanks to rising exports and foreign direct investment. Inflation eased and the country rebuilt its foreign exchange reserves. Much of the central bank’s attention has been focused recently on cleaning up bad loans and recapitalizing the banking system.

Algeria’s GDP expanded by 4% in 2014 on rising oil production, while inflation slowed to 3%. The country’s large foreign exchange reserves helped shield the economy from the decline in oil prices, but Governor Laksaci says the economy’s ability to weather the oil shock will diminish if prices stay low. Algeria depends on the oil and gas sector for 98% of exports and 58% of government revenue. The central bank focuses on liquidity instead of interest rates and has held the 4% discount rate unchanged. Joblessness remains a huge problem in Algeria. The unemployment rate is 10.6%.

The National Bank of Angola raised interest rates repeatedly this year in an effort to support the weak kwanza and restrain rising inflation. Angola is Africa’s second-largest oil producer, and it relies on crude exports for 95% of its foreign currency earnings. Former Finance minister José Pedro de Morais was named central bank governor in January, replacing José de Lima Massano, who had held the position since October 2010. The central bank raised its policy rate by a quarter point in March, and a half point each in June and July, with the rate reaching 10.25% as inflation neared double digits.

The Central Bank of Bahrain has held the benchmark repo rate unchanged at 2.25% this year. With its currency pegged to the dollar, Bahrain has little flexibility in its monetary policy. The country’s real GDP is expected to grow about 4% this year, despite lower oil prices. The economy is being supported by a full pipeline of infrastructure projects, funded primarily by the Gulf Cooperation Council Development Fund and the private sector. Banks have cleaned up their loan portfolios and are in a strong position to withstand any economic slowdown, according to the central bank governor.

The Bank of Botswana cut its benchmark interest rate in August for the second time this year, even as other central banks in Africa raised rates to support their currencies and contain inflation. “The current state of the economy, as well as the domestic and external economic outlook, including the inflation forecast, suggest that easing monetary policy is a step in the right direction,” the Bank of Botswana said. The bank cut its main lending rate by a half point to 6% in August, following a full percentage point reduction in February. Real GDP growth is slowing from last year’s 7.9% advance, and inflation is near the lower end of the central bank’s 3%-to-6% target band. Botswana, the world’s largest diamond producer, is continuing to run a budget surplus.

The Central Bank of Egypt allowed the pound to weaken by 2.5% in July, helping to restore the competitiveness of the country’s exports. It lowered the overnight deposit rate by a half point to 8.75% in January and held it at that level through the July meeting of the monetary policy committee. Economists say interest rates could fall further as inflation pressures ease. The Arab Gulf countries provided a lift to Egypt’s foreign exchange reserves, helping to relieve pressure on the balance of payments. Real GDP increased 4.3% last year and is forecast to grow by about 5% this year and in 2016.

Ethiopia is one of the world’s fastest-growing economies. FDI is on the rise and the country is financing a number of big infrastructure projects. The IMF expects Ethiopia’s real GDP to grow 8.7% this year and is encouraging the government to allow a greater role for the private sector in its command economy. The National Bank of Ethiopia has held its benchmark interest rate steady at 5% this year. The country has held inflation to single digits in recent years.

Ghana’s central bank surprised economists in May when it raised its benchmark interest rate by a full percentage point to 22%. The move was designed to prop up the cedi, which has fallen sharply amid concerns about rising government debt and declining foreign currency reserves. But the exceedingly high interest rates are choking economic growth. Ghana received a $918 million loan in April from the IMF to support a reform program. The IMF said in June that economic growth this year is expected to slow to about 3.5% due to low cocoa and gold production, as well as continual power outages.

Iraq’s oil-dependent economy contracted by 2.7% last year and is forecast to shrink further this year, with unemployment above 25%. Falling oil prices and big increases in military spending to combat ISIS have forced the government to delay paying its international debts. State-owned enterprises employ half of the workforce. The Central Bank of Iraq has held its policy rate at 6%, a move that lacks significance as the economy is largely based on cash. Inflation has been held to around 1.7%, with the currency effectively pegged to the dollar.

The Israeli economy has continued to perform well, supported by a carefully orchestrated monetary policy. The Bank of Israel reduced the interest rate in March by 0.15 percentage points to a record low 0.1%, as the inflation rate was negative over the preceding 12 months. This may have been the bottom of the rate-cut cycle. The bank forecast in late June that inflation in the next four quarters would increase to 1.6%. The shekel soared in response to the perceived shift in policy, prompting the central bank to intervene.

Jordan’s unemployment rate remains stuck around 12%, but lower oil prices, slowing inflation and record foreign currency reserves portray an economy on the mend. Real GDP growth was 3.1% in 2014 and is expected to pick up to about 3.8% this year. The Central Bank of Jordan cut its benchmark rediscount rate by a quarter point in February and another quarter point in July. Jordan has no oil and little water. It also is sheltering and feeding more than 620,000 refugees from the fighting in Syria.

The Central Bank of Kenya reinforced its inflation-fighting credentials in June, when it raised its benchmark rate by 1.5 percentage points to 10%. The monetary policy committee acted at an unscheduled meeting after the shilling plunged to its lowest level against the dollar since November 2011. That meeting was led by acting governor Haron Sirima. President Uhuru Kenyatta has named Patrick Njoroge, former adviser to the International Monetary Fund, as the new governor to replace Njuguna Ndung’u, who resigned in March. The country’s inflation rate rose from 5.5% at the beginning of the year to 6.9% in May. Real GDP is projected to grow by 6.5% this year.

The Central Bank of Kuwait has held its benchmark discount rate unchanged at a record-low 2% since October 2012. But the economy remains sluggish because of low investment and overreliance on oil revenues. Kuwait is still running a current-account surplus and adding to its substantial foreign exchange reserves. Economists say government spending is skewed toward wages and subsidies, not capital investment. Private-sector credit growth has been weak.

Lebanon has been struggling with political and security issues for years, but its financial sector remains robust. Governor Salameh says the economy is growing at a modest but sustained rate of about 2%. The central bank has held the benchmark repo rate unchanged at 10% and has kept the Lebanese pound steady. Refugees from the conflict in Syria now make up more than a quarter of the country’s population and are putting a substantial strain on resources. The tourist industry has seen business decline. Still, Lebanon has foreign exchange reserves of more than $40 billion.

Morocco’s agriculture-based economy has benefited this year from favorable weather and declining oil prices. The central bank, Bank Al-Maghrib, has kept its policy rate steady at 2.5% so far this year. It says this is consistent with price stability and takes into account an increase in the minimum wage in July. The country’s real GDP growth rate is expected to increase to 5% this year from 2.4% in 2014, while inflation remains low at about 1.5%. In April the central bank revised the dirham’s currency peg, doubling the dollar’s weighting to 40%.

The Bank of Namibia raised its benchmark repo rate a quarter point to 6.5% in June, citing high growth in household credit. It said many of these loans are used to import luxury goods that are nonproductive. Economic growth accelerated to 5.3% in 2014 and is expected to pick up further in 2015, while low oil prices have restrained inflation. Namibia’s economy is largely composed of a capital-intensive mining sector and a labor-intensive agricultural sector. FDI, domestic investment and internal demand are driving economic growth.

Nigeria’s central bank in June restricted access to the interbank foreign exchange market to conserve its dollar reserves. Importers could no longer get foreign currency to buy a range of items. Investors weren’t allowed to buy foreign-currency bonds. Emefiele said the bank wanted to encourage the purchase of locally produced goods. The naira came under pressure as a result of lower oil prices, and the central bank has spent billions to prop it up. The bank has maintained its policy rate at a record high 13%.

Oman is stepping up efforts to promote economic diversification in the face of lower oil prices. The country has a break-even oil price of about $108 a barrel, and declining oil revenues are pushing the fiscal and current-account balances into widening deficits. The Central Bank of Oman pegs the rial to the dollar and manages liquidity through an online deposit facility. The CBO has kept its benchmark rate at a record-low 1% since March 2012. In July the central bank established an independent department to handle Islamic banking,

Although lower oil prices are cutting into Qatar’s fiscal and current-account surpluses, the nation has ample resources to support its massive infrastructure investment. The population is expanding rapidly as foreign workers arrive to build stadiums for the 2022 FIFA World Cup and other projects like Doha’s $35 billion metro. A construction boom is fueling growth in the financial services market. As the Barzan natural gas field starts production, real GDP growth of about 7% is likely this year The central bank has held the official repo rate unchanged at 4.5% this year.

The Saudi Arabian Monetary Agency, the kingdom’s central bank, says government spending ensures abundant liquidity in the economy. SAMA has maintained its repo rate unchanged at 2% since January 2009. The agency has little room to maneuver in setting monetary policy, since the riyal is pegged to the dollar. The kingdom’s real GDP grew 3.5% last year and is seen slowing to about 2.8% in 2015, owing to falling oil prices. SAMA has kept the pricing of its bills unchanged at 80% of the Saudi interbank bid rate to encourage bank lending. The kingdom issued $4 billion of bonds in July, the first since 2007.

The South African Reserve Bank raised its policy rate by a quarter point to 6% in July, despite a weakening in domestic output. Governor Kganyago, who replaced Gill Marcus last November as central bank boss, inherited an economy plagued by low growth and high inflation and constrained by power outages and labor unrest. The rate increase also helped support the rand. The bank expects real GDP growth of 2% this year, up from 1.5% in 2014.

Tunisia’s central bank has kept its benchmark interest rate on hold at 4.75% this year, despite economic weakness across the board. The tourism industry has been hit hard by terrorist attacks.  In March militants killed more than 20 people visiting the Bardo National Museum in Tunis. On July 4, president Beji Caid Essebsi declared a month-long state of emergency after 38 tourists were shot dead at the beach resort of Sousse. The government expects GDP growth of 1% this year, down from 2.3% in 2014. The inflation rate has remained near 5%, despite the decline in oil prices.

The Bank of Uganda raised the central bank rate by a full point in June and another 1.5 points at a special meeting in July, to 14.5%, to restrain inflationary pressures amid a steep drop in the shilling. The monetary policy committee sees steady economic growth after a 5% increase in real GDP last year. Infrastructure investment is the government’s top priority, the IMF said in July.

The UAE central bank has kept its overnight repurchase rate unchanged at a record-low 1% since January 2009 but money market rates began rising markedly in August. The country will post a fiscal deficit this year, as a result of lower oil prices. To fill the gap, authorities are considering ways to trim spending and hike revenues. The government has deregulated some fuel prices and is considering a sales tax. The IMF sees GDP growth of 3% this year, down from 4.6%. 

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Vale, the Brazilian mining giant formerly known as CVRD, decided to walk away from its proposed $90 billion acquisition of Swiss miner Xstrata after both sides failed to reach an agreement on the deal. The transaction would have been the largest-ever cross-border acquisition by a Latin American company. Vale reportedly had $71 billion in bank commitments to close the deal. Both sides left open the possibility of restarting negotiations.

Santiago Fittipaldi