Headlines

Sweden’s central bank lowered its key interest rate for the first time in more than eight years on Wednesday, underlining the readiness of European policy makers to move ahead of the Federal Reserve as inflation cools, the Wall Street Journal reported. The Riksbank cut its key rate to 3.75% from 4.0% becoming only the second central bank from a rich, advanced economy to begin its easing cycle following the post-pandemic surge in inflation. Switzerland’s central bank was the first to move in March. This century, Europe has typically followed the U.S. in lowering borrowing costs.

Chile’s consumer prices rose more than forecast last month, underscoring the central bank’s caution over further interest rate cuts after it spearheaded reductions in Latin American over the past year, Bloomberg News reported. Prices increased 0.5% from March, above the 0.4% median estimate from analysts in a Bloomberg survey. The annual inflation rate rose to 4% from 3.7% in the chained series, the national statistics institute reported Wednesday.

Artificial intelligence lacks the human judgement skills needed to set interest rates, the head of the Monetary Authority of Singapore said on Monday, Reuters reported. But AI could make it easier for criminals to launch cyber attacks, said Chia Der Jiun, managing director of Singapore's central bank. He said AI was being used in some economic models and in areas such as fraud detection, but stressed it was not at a stage where it could "supplant human judgement". "There is a great deal of judgement involved in understanding and having a view as to the forward path of inflation...

Uganda plans to pull back from variable interest-rate loans after government debt has more than doubled in almost five years because of obtaining costly commercial credit, the East African nation’s Finance Ministry said, Bloomberg News reported. The stock of public debt jumped to 93.4 trillion shillings ($24.7 billion) at the end of last year from 42.2 trillion shillings in June 2019, according to the ministry’s medium-term debt management report. It was up 13.6% year-on-year in 2023 in dollar terms, partly due to Stanbic Bank budget financing.

The Reserve Bank of Australia left interest rates unchanged Tuesday, and stuck with the message that it isn’t ruling anything out as it seeks to bring inflation under control, the Wall Street Journal reported. The RBA held the official cash rate at 4.35%, where it has remained since November. The outcome was widely anticipated by economists. “The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out,” the RBA said at the end of a two-day policy meeting.

European Central Bank Governing Council member Joachim Nagel said forces including geopolitics and decarbonization could keep consumer-price growth elevated in the years ahead, Bloomberg News reported. “A range of potential factors could lead to higher inflationary pressure in the future,” the Bundesbank president told a conference Tuesday, also citing demographic trends that may lead to “persistently higher wage growth.” While saying more research is needed, Nagel doesn’t expect a return to the kind of weak inflation rates seen before the pandemic.

The number of European banks taking account of environmental risks in their reserves for loan losses has more than tripled in a year, signaling an initial win for the regulator in its effort to prepare for climate change, Bloomberg News reported. After the European Central Bank ramped up pressure last year, a wider effort to change how banks use so-called provisioning overlays has resulted in 55% of lenders now taking climate into account, up from 16% last year, according to a presentation by the regulator delivered last month to auditors and seen by Bloomberg.

Fisker's Austrian unit filed for bankruptcy protection on Tuesday as the cash-strapped EV startup looks for strategic options after talks with a major automaker for a potential investment collapsed, Reuters reported. The unit, Fisker GmbH, said other divisions are not included in the restructuring process and will continue to operate normally. Fisker has been under pressure since it warned of going concern in February. It faces stiff competition and subdued customer spending in the wake of a tough economy.

Attorneys for Sung Kook “Bill” Hwang are expected to argue that prosecutors are pushing a novel and nonsensical market manipulation theory when the criminal trial of the former Archegos Capital Management boss kicks off in New York this month, Reuters reported. Archegos, a $36 billion family office which invested Hwang's personal wealth, collapsed spectacularly in March 2021 after its highly leveraged bets on a small number of stocks via complex derivatives quickly soured.

Australian budget airline Bonza has canceled all flights through May 14 as lessors seek to seize its planes, Bloomberg News reported. The embattled carrier grounded its fleet on April 29 after the lessors issued termination notices. Hall Chadwick, which has been appointed as administrators to the airline, said Tuesday it has been in discussions with the lessors to see whether the grounded planes could become operational in the short term, but to no avail.