Headlines

Argentina hiked interest rates on Thursday after monthly inflation accelerated to the highest level this year, a move aimed at bolstering peso savings and reining in prices amid a wider economic crisis, Reuters reported. The central bank raised the benchmark Leliq rate to 38% from 36% previously after the country’s statistics agency had revealed October inflation speeding up to 3.8% and rolling 12-month inflation had been clocked at 37.2% in the month. The central bank also raised overnight and 7-day reverse repo rates.

Banks have been able to convince corporate borrowers to avoid applying for debt restructuring given that the “negative externalities" and aggregate debt recast are not expected to breach the ₹1-trillion mark, a State Bank of India report said on Wednesday, Mint reported. “In terms of numbers, assuming 15%-20% of the corporates had opted for moratorium, based on our earlier analysis, the restructuring amount originally envisaged was up to ₹7 trillion," Soumya Kanti Ghosh, group chief economic adviser, SBI said in the SBI Ecowrap report.

Private-sector creditors proposed short-term actions in support of the poorest world economies in a draft letter to the G20 that says the current debt relief extension could be “insufficient” to tackle some of those country’s short-term cash needs, Reuters reported.

The UK economy expanded at its fastest pace on record in the third quarter, but output was still well below pre-pandemic levels and growth is threatened by the latest lockdown restrictions, the Financial Times reported. Britain’s gross domestic product increased 15.5 per cent in the three months to September compared with the previous three months, the quickest pace since records began in 1955, according to the Office for National Statistics. The rebound reflected the reopening of businesses, shops, restaurants and bars after the national lockdown.

The Spanish government is considering extending its scheme of state-backed credit lines beyond December while also preparing measures to support the battered hospitality sector during the coronavirus pandemic, sources with knowledge of the matter said, Reuters reported. “Everything is under discussion right now, the increase of the grace period, the extension of those credits and of the entire scheme beyond December, but nothing has been closed yet,” one source said.

Avianca Holdings said on Thursday it has won the support of a large number of institutional investors and existing lenders, meaning it will no longer need the Colombian government’s participation as part of its restructuring process, Reuters reported. Avianca, Latin America’s second-largest airline, filed for Chapter 11 bankruptcy in New York in May. A U.S. bankruptcy court approved a proposed financing plan of over $2 billion to help the carrier exit Chapter 11 restructuring in October. The airline was expecting $370 million in credit from the Colombian government.

China’s bond market regulator launched an investigation on Thursday into a default by a mining firm, the latest in a series of setbacks for state-backed companies as the government winds down support for an economy hit hard by the COVID-19 pandemic, Reuters reported. The National Association of Financial Market Institutional Investors (NAFMII) said it was launching a “self-disciplinary” investigation into Yongcheng Coal & Electricity Holding Group Co Ltd, which defaulted less than a month after issuing a new bond.

The trustees of British defined benefit - or final salary - pension schemes must be ready for possible employer distress or insolvency to protect their members as COVID-19 impacts the economy, the country’s pensions watchdog said on Thursday, Reuters reported. “Trustees are the first line of defence for savers,” Mike Birch, director of supervision at The Pensions Regulator said in a statement. “The faster they act, the more options and greater time they’ll have to protect members’ retirements.

One in seven Spanish workers are in businesses at risk of collapse, according to new research by the European Central Bank, excluding those who work for financial companies, the Financial Times reported. This is the highest rate of all large eurozone economies, and comes despite the country’s national furlough scheme. It compares with about 8 per cent of employees in Germany and France and 10 per cent in Italy, also taking into account the use of subsidies to keep people in work, the ECB found.

European banks need to prepare their balance sheets for the risk of pandemic-induced non-performing loans hitting them in the new year, the head of the EU agency tasked with winding down failing lenders has said, the Financial Times reported. Elke König, chair of the Single Resolution Board, rejected suggestions from the European Central Bank that the EU needs to set up a network of “bad banks” to handle higher non-performing loans (NPLs), but she warned banks needed to do intensive work to sort out viable loans from unviable ones.  In an interview with the Financial Times