Headlines

The National Bank of Poland (NBP) kept its main interest rate on hold at 6.75% on Wednesday, it said, opting to leave borrowing costs unchanged despite soaring inflation as it warned of an economic slowdown in the coming months, Reuters reported. With regional peers finishing monetary tightening cycles, Polish policymakers had also signaled that the end of rate hikes was near. However, with inflation rising to 17.2% in September, the highest since 1997, most economists had predicted that the cost of credit would continue to rise.

Hungary's central bank accepted 2.093 trillion forints ($4.90 billion) worth of bids from banks at its first floating-rate two-month deposit tender on Wednesday as part of its efforts to drain forint liquidity and tighten monetary conditions further, Reuters reported. The National Bank of Hungary (NBH), which ended its cycle of rate hikes last month taking the base rate to 13%, has said it would deploy an array of tools to tighten liquidity conditions from this month, including the new deposit instrument.

Romania unexpectedly pressed ahead with a robust pace of monetary tightening, raising borrowing costs to the highest level in over a decade to combat persistent inflation, Bloomberg News reported. The central bank in Bucharest lifted its benchmark interest rate by 75 basis points to 6.25% on Wednesday, following a similar decision at its last meeting in August. Only five out of 15 economists in a Bloomberg survey predicted the move, while most analysts saw a step of 50 basis points; one predicted a 25 basis-point hike.

Ukrainian Central Bank Governor Kyrylo Shevchenko abruptly submitted his resignation on Tuesday, citing health reasons in a Facebook post, Reuters reported. "Due to health-related issues that can no longer be ignored, I have made a difficult decision for myself. I am leaving the post of the head of Ukraine's National Bank," he said. Shevchenko, who assumed the post in July 2020 promising to maintain the bank's independence and cooperation with the International Monetary Fund, said he had submitted his letter of resignation to President Volodymyr Zelenskiy and asked him to accept it.

European Union countries reached a compromise on a new package of Russia sanctions that includes support for a price cap on oil sales to third countries, with a formal agreement expected on Wednesday, Bloomberg News reported. EU ambassadors on Tuesday night discussed ways to mitigate the impact the new package would have on countries with large shipping industries. Greece, Cyprus and Malta expressed concerns about curbs on transporting Russian oil and have been pushing for assurances on the effectiveness of the new mechanism and its potential impact.

The world sorely needs more grains and Canada has a bin-busting harvest this year -- but shippers fear there aren’t enough rail cars to transport it all, Bloomberg News reported. There were almost 2,400 outstanding grain-car orders for the nation’s two major carriers, Canadian National Railway Co. and Canadian Pacific Railway Ltd., according to the latest data from Ag Transport Coalition. “We have to make up these orders,” Wade Sobkowich, executive director of the Winnipeg-based Western Grain Elevator Association, said Tuesday in a phone interview.

The majority of funds made available as part of the European Union's pandemic recovery fund have not yet been disbursed, Chancellor Olaf Scholz said on Tuesday when asked about the possibility of further joint debt to address the energy crisis, Reuters reported. "These funds have overwhelmingly not been spent yet," Scholz said after a meeting with the Dutch prime minister in Berlin, adding that this support could be "particularly effective" now that a second crisis has followed the COVID-19 pandemic.

Germany is ready to discuss measures that could contain gas and power prices in the European Union, German Finance Minister Christian Lindner said on Tuesday, Reuters reported. "We need to tackle this problem at its roots.

Asset managers including Blackrock Inc. and Schroders Plc are limiting institutional investors’ withdrawals from some UK property funds after a wave of requests to move money, Bloomberg News reported. Schroders’ UK Real Estate fund has deferred redemptions due at the start of October to as late as July 2023, which will give the £2.8 billion ($3.2 billion) fund more time to ensure it has enough cash to cover the payments, according to a statement on its website.

The European Central Bank will raise interest rates as much as needed to bring down core inflation although the pace could possibly slow after the end of the year, ECB policymaker Francois Villeroy de Galhau said on Tuesday, Reuters reported. Villeroy, who is also governor of the French central bank, said that 4.8% in euro zone core inflation, which excludes energy and food prices beyond the central bank's control, was too broad and too high. "We will raise interest rates as much as necessary to bring core inflation down," Villeroy told Dutch newspaper NRC.