Headlines

Global central banks need to make clear to financial markets the probable need for interest rates to remain higher for longer in order to bring inflation sustainably back down to target and avoid a rebound in price pressures, the International Monetary Fund said on Thursday, Reuters reported. The warning comes amid a significant easing in financial conditions since October as investors looked past the steep run up in interest rates by central banks last year designed to bring down an inflation rate that breached 6% in more than 80% of the world's economies.

Brazil's currency firmed and interest rate futures jumped on Thursday as a more hawkish outlook from the central bank led economists to push back forecasts for rate cuts to next year, Reuters reported. The central bank's policy statement was a setback for newly inaugurated President Luiz Inacio Lula da Silva, who has blasted the level of interest rates - maintained at a six-year high of 13.75% on Wednesday - as an obstacle to economic growth.

Zimbabwe's central bank has cut its policy rate by 50 percentage points to 150%, it said in a statement on Thursday, driven by a downward trend in inflation since late last year, Reuters reported. Monthly inflation fell to 1.1% in January from 2.4% in December, while yearly inflation dipped to 229.8% from 243.8%. "The moderation in interest rates is important and necessitated by the downward trend in the month-on-month inflation since the last quarter of 2022," said the bank, adding it expects the trend to continue into 2023.

The Paris Club of creditor nations is ready to provide financing assurances to Sri Lanka, a key step needed to unlock a $2.9 billion bailout by the International Monetary Fund (IMF), two sources with direct knowledge of the matter told Reuters. The informal group of bilateral lenders is set to announce its support to the crisis-hit nation on a debt overhaul "soon", said one of the sources, who asked not to be named because the talks are private.

Cryptocurrency exchange Kraken has shut its Abu Dhabi office less than a year after securing a license in the region, a spokesperson said on Thursday, as the company seeks to sharpen its focus after FTX's bankruptcy shook the digital assets sector, Reuters reported. The U.S.-based company had said last year it would reduce its workforce by 30%, or about 1,100 employees, as rising rates and worries of an economic downturn soured the sentiment on crypto.

The number of Swedish bankruptcies soared to the highest level in at least a decade in January, as construction companies come under pressure from an ongoing housing-market rout, Bloomberg News reported. The number of companies filing for bankruptcy increased by 47% from a year earlier in January, to 622, according to credit reference agency UC. The data highlights the effects of Sweden’s worst housing-price slump in three decades, which has contributed to a surge in defaults in the construction sector, with 130 builders filing for bankruptcy last month.

Inflation eased swiftly and sharply in the eurozone last month, as skyrocketing energy costs declined amid a broad European conservation effort, but prices for many goods continued to climb and policymakers are expected to raise interest rates this week, the New York Times reported. Consumer prices in countries that use the euro rose at an 8.5 percent annual rate in January, down from 9.2 percent in December and well below double-digit increases in autumn, according to a European Commission estimate released Wednesday.

The European Union risks missing a March target to agree on a reform of its debt-limit rules in the face of resistance from countries including Germany, a prospect that may force member states into abrupt and potentially painful budgetary adjustments, Bloomberg News reported. Berlin is especially doubtful about the idea of highly indebted governments negotiating tailored plans with the European Commission to bring their spending under control and wants to see reliable enforcement tools in place.

The UK government hopes to embrace the technological innovations emanating from the blockchain industry with a new set of plans to regulate digital assets, protect consumers, and make Britain "a global hub for crypto-asset technology," YahooFinance.com reported. The Treasury has released proposals for regulating crypto-exchanges, lending activities, and how digital assets are stored, describing crypto assets as having "a range of potential benefits, as well as posing risks to the consumer".

Britain was hit by the largest strikes in a decade on Wednesday as workers from train drivers to teachers to civil servants walked off the job for the day, forcing millions of children to miss school and commuters to stay home, the Wall Street Journal reported. The strikes reflect a growing challenge to the U.K. and some European countries of how to address falling real wages for many public-sector workers without further stoking inflation or damaging public finances after years of high spending.