Headlines

The Bank of Canada raised interest rates for an eighth consecutive and potentially final time, saying it expects to move to the sidelines and weigh the impact of its rapid tightening, Bloomberg News reported. Policymakers led by Governor Tiff Macklem increased the benchmark overnight lending rate by 25 basis points to 4.5% on Wednesday, the highest level in 15 years. Bonds rallied and the loonie dropped. While the quarter percentage point hike matched expectations of markets and economists, most analysts didn’t see the central bank explicitly declaring a potential end point.

Japan’s government cut its monthly economic assessment in January for the first time in 11 months, as trade weakened due to a global economic slowdown, Bloomberg News reported. The Cabinet Office said in its latest report Wednesday that parts of the economy are showing weakness, while overall it’s picking up moderately. It downgraded its view of exports, imports and bankruptcies. Japan is bracing for the impact of a global economic slowdown from aggressive monetary policy tightening, and the fallout from China’s abrupt end to its zero-Covid policy.

Turkey’s central bank is considering a measure to deter lenders from selling currency derivatives to their customers, the latest effort to curb growing corporate demand for dollars, Bloomberg News reported. The monetary authority is designing a new regulation to require banks to hold collateral for forward contracts, with the goal of ultimately cooling off demand for hard currency in the spot market, according to people familiar with the discussions.

Polish rate-setter Ludwik Kotecki said on Wednesday that he sees scope for some small interest rates hikes this year but doesn't believe the Monetary Policy Council will decide to raise them, Reuters reported. "I would still see room for small interest rate hikes this year (...) but it probably won't happen. I just hope no one comes up with the idea of ​​lowering interest rates," Kotecki told website gazeta.pl.

The central bank of Kuwait raised its discount rate to 4% from 3.50% effective Jan. 26, it said in a statement on Wednesday, Reuters reported. The decision is in line with "recent developments in the local and international economic conditions, local monitory and banking indicators and movements on KWD interest rate in the local market considering changes to the interest rates on the other major currencies," Governor Basel Al-Haroon said in the statement. Read more.

The government has proposed the decriminalisation of several violations under the Insolvency and Bankruptcy Code (IBC) to further improve the ease of doing business and speed up corporate failure resolution, the Economic Times of India reported. The move is in line with the government's initiative to clean up the statute book to decriminalise minor offences and switch to monetary penalties. A similar process has been carried out in the laws for companies and limited liability partnerships.

Americanas SA three largest shareholders, the billionaire founders of 3G Capital, said on Sunday they had not known of $4 billion in accounting 'inconsistencies' at the Brazilian retailer, Reuters reported. In their first official statement since Americanas filed for bankruptcy this month, Jorge Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles said they were "sorry for investor and creditor losses". "We didn't know of and would never allow any accounting manipulation in the company", the statement said.

European Union lawmakers backed a draft law on Tuesday to implement the final leg of post-financial global bank capital rules, adding "prohibitive" requirements to cover risks from cryptoassets, Reuters reported. The European Parliament's economic affairs committee approved a draft law to implement Basel III capital rules from January 2025, though backing several temporary divergences to give banks more time to adapt.

Japan raised its estimates for long-term interest rates over the coming few years in government's twice-yearly fiscal projections issued on Tuesday, following the central bank's decision last month to allow 10-year bond yields to move more widely, Reuters reported. Higher rates will test the government's ability to service the industrial world's heaviest debt burden at more than double the size of Japan's annual economic output.

The Export-Import Bank of China has offered Sri Lanka a two-year moratorium on its debt and said it will support the country's efforts to secure a $2.9 billion loan from the International Monetary Fund, according to a letter reviewed by Reuters. Regional rivals China and India are the biggest bilateral lenders to Sri Lanka, a country of 22 million people that is facing its worst economic crisis in seven decades.