Headlines

Sweden’s central bank lowered its key interest rate and signaled that borrowing costs could be lowered again next year to support the stuttering economy, the Wall Street Journal reported. The Riksbank cut its key interest rate by a quarter of a percentage point to 2.50% on Thursday. The move marks a return to more gradual monetary policy easing.

Norway’s central bank held its key policy rate at 4.5% as it pushes on with efforts to bring inflation down, but said it will likely begin monetary policy easing in March, the Wall Street Journal reported. The policy rate has been at 4.5% since December 2023 and has helped to significantly dampen inflation from its peak, but a rapid rise in business costs will likely restrain further disinflation, Norges Bank said.

Taiwan’s central bank maintained interest rates unchanged again, delivering a third consecutive hold as it keeps a watchful eye on inflation and signs of overheating in the housing market, the Wall Street Journal reported. The Central Bank of the Republic of China (Taiwan) kept its benchmark discount rate at 2.000% on Thursday. It maintained secured and unsecured loan rates at 2.375% and 4.250%, respectively. The Taiwanese central bank attributed the hold to cooling domestic inflation and global economic conditions.

El Salvador reached a deal with the International Monetary Fund after four years of negotiations that were strained by the country’s adoption of Bitcoin as a legal tender, Bloomberg News reported. The Central American nation and the Washington-based lender agreed on a $1.4 billion loan program to be disbursed over 40 months, according to a statement by the IMF. In exchange, El Salvador had agreed to adopt measures that will improve its primary balance and help cut its debt-to-GDP ratio.

Just as central bankers around the world were growing more confident that inflation was coming back under control and growth stabilizing, a new economic threat looms: potentially hefty tariffs imposed by President-elect Donald J. Trump, the New York Times reported. It’s too soon to know what policies Mr. Trump will carry out during his second presidential term or how other governments might respond. But central bankers are alert to the risk that global trade tensions will make managing inflation more challenging.

An organization that works to document what happened at a notorious residential school says it’s at risk of going bankrupt by the end of the month unless Canada makes a decision on whether it will fund the group’s work, the Canadian Press reported. The Survivors’ Secretariat, which works to uncover the truth about what happened at the Mohawk Institute, a residential school that operated in Brantford, Ont., also says the ministry of Crown-Indigenous relations is letting down survivors with the delays in processing its applications.

Long feted as the savior of Russia’s economy in the face of sanctions over the war in Ukraine, central bank Governor Elvira Nabiullina is increasingly under attack from officials who say she’s now destroying it with record high interest rates, Bloomberg News reported. Nabiullina faces rising criticism within the Russian political and business elite ahead of the bank’s final rate-setting meeting of the year on Friday. Analysts forecast that policymakers may hike the key interest rate to 23% from 21% now, and possibly as high as 24% to curb persistent high inflation.

More insolvencies hit construction than any other sector in the year to November, according to new official figures, ConstrucitonNews.co.uk reported. The latest data from the Insolvency Service revealed that 4,208 construction firms became insolvent in the year to November 2024. It means the sector represented 17 per cent of liquidations, administrations and company voluntary arrangements across England and Wales this year.

Thames Water has won court approval to secure a £3bn cash lifeline from some of its biggest creditors, The Guardian reported. The company will need to hold a formal vote to win support from the majority of creditors in January, before its deal is rubber-stamped by the courts in February. The decision, which covers a complex debt-restructuring effort, was essential to ensure the company has enough money to stave off temporary nationalisation, Thames said.

The Financial Stability Board (FSB) on Wednesday pitched recommendations for governments to reduce risks around hedge funds, insurers and other non-bank financial intermediaries, which now account for almost half of global financial assets, Reuters reported. The sector of non-bank financial intermediation has grown by around 130% between 2009 and 2023, making markets more vulnerable for stress events, according to the Basel-based FSB, which acts as the G20's financial risk watchdog.