Headlines
Resources Per Region
Uruguayan fintech dLocal, the South American country's first unicorn, saw its shares plummet on Friday, after Argentine news outlet Infobae published an article saying the government was investigating it for a possible fraud of at least $400 million, Reuters reported. Citing unnamed official sources, Infobae said the Argentina government was investigating the fintech for "improper manouevers" and transfers abroad that would constitute a fraud, with most of its income coming from services sold to subsidiaries of the same firm.
Read more
Britain's Treasury chief said he would be prepared to see the U.K. economy slip back into recession if further interest rate hikes are necessary to bring down inflation, the Associated Press reported. With the Bank of England expected to keep raising rates following higher-than-anticipated inflation figures this week, Jeremy Hunt said it was necessary to prioritize measures to slow the pace of price increases. In an interview with Sky News that aired Friday, Hunt said the “only path to sustainable growth” is to bring inflation under control.
Read more
Japan’s unemployment rate fell for the first time in three months, potentially feeding into higher wages and providing support for the Bank of Japan’s sustainable inflation goal down the line, Bloomberg News reported. The jobless rate dropped to 2.6% in April, as the number of those without jobs declined by 150,000 from the previous month, the ministry of internal affairs reported Tuesday. Economists had expected the unemployment rate to decline to 2.7%.
Read more
Chile’s central bank said there’s no evidence that the domestic inflation slowdown had been consolidated, even as headline consumer price and consumption readings head in the right direction, Bloomberg News reported. The only plausible monetary policy option was to keep rates unchanged at an over two-decade high of 11.25%, central bankers wrote in the minutes to their May 12 decision. The risks associated with scenarios of higher inflationary pressures were “particularly complex and costly,” they wrote.
Read more
Call it a quasi-central bank digital currency or a government-sponsored stable coin — Zimbabwe’s new gold-backed virtual token is the country’s latest attempt to end decades of chaos, according to a Bloomberg News commentary. The digital coin went live earlier this month in a bid to divert demand for US dollars in the landlocked African nation, where inflation has soared and the local Zimbabwean dollar is struggling. The idea, at least according to officials, is that the new token will give people and businesses an easy way to use the ultra-safe value of gold as a currency benchmark.
Read more
South Africa's central bank has warned of risks to the country's financial stability, due to capital outflows and the possibility of sanctions following a U.S. diplomat's accusation of supplying weapons to Russia to aid its campaign in Ukraine, Reuters reported. These risks, along with the threat of a grid failure due to repeated power cuts and persistent high inflation, have increased the systemic risks to the financial system, the South African Reserve Bank (SARB) said in its biannual health check on Monday.
Read more
British ministers are considering sweeping reforms to the 39 billion pounds ($49.22 billion) Pension Protection Fund that protects savers in company pension plans, the Financial Times reported, according to Reuters. Proposals brought before ministers could see the government-backed fund being given an extended remit to take on struggling corporate “defined benefit” retirement schemes, the newspaper said citing people briefed on the matter.
Read more
U.S. appeals court judges on Wednesday appeared skeptical of the U.S. Environmental Protection Agency's claim that it can require an idled oil refinery in the U.S. Virgin Islands to obtain a costly new pollution permit before restarting operations, Reuters reported. During oral arguments in St. Croix, a three-judge panel of the Third U.S. Circuit Court of Appeals questioned whether the federal Clean Air Act allows the agency to require Port Hamilton Refining and Transportation LLLP, the refinery's owner, to obtain the permit, since they are typically only necessary for new projects.
German airline Lufthansa on Thursday signed a deal with the Italian government for a 41-percent minority share in the long-struggling ITA Airways, formerly Alitalia, the Associated Press reported. The deal calls for investments of 575 million euros in capital increases, 325 million euros from Lufthansa and the rest from the Italian Finance Ministry, providing capital for growth. Lufthansa will also have the option of buying the remaining shares at a later date.
The German economy was in recession in early 2023 after household spending in Europe's economic engine finally succumbed to the pressure of high inflation, Reuters reported. Gross domestic product fell by 0.3% in the first quarter of the year when adjusted for price and calendar effects, a second estimate from the statistics office showed on Thursday. This follows a decline of 0.5% in the fourth quarter of 2022. A recession is commonly defined as two successive quarters of contraction.