Headlines

Thailand’s acting prime minister, who earlier this week called for measures to halt the baht’s slide, said the government won’t meddle with the central bank and how it handles the currency, Bloomberg News reported. Prawit Wongsuwan, who is leading the government after a court last month suspended Prayuth Chan-Ocha, said on Thursday he directed Finance Minister Arkhom Termpittayapaisith to “only talk” to the Bank of Thailand about the baht’s recent slump. That’s a walk back from remarks on Tuesday when he said he wants the baht back at 35 to a dollar.

Turkey’s central bank delivered another massive interest rate cut Thursday despite eye-popping inflation above 80%, moving the opposite way from world economies that are raising rates to control prices as the lira sunk to record lows, the Associated Press reported. The Central Bank of the Republic of Turkey lowered the benchmark rate by 1 percentage point, to 12%. The lira was trading around 18.38 against the dollar, weakening further than the previous record low of 18.36 in December.

Switzerland exited the era of negative interest rates on Thursday when its central bank joined others around the world in tightening monetary policy more aggressively to combat resurgent inflation, Reuters reported. The Swiss National Bank (SNB) raised its policy interest rate by 0.75 of a percentage point, ending the country's seven-and-a-half year experiment with negative rates which sparked opposition from its financial sector and fears of asset bubbles. The increase to 0.5%, from minus 0.25%, followed a 50 basis point hike in June from minus 0.75%, the SNB's first rate hike in 15 years.

Euro zone inflation is set to go higher and price growth is likely to be more persistent than earlier thought, European Central Bank board member Isabel Schnabel said on Thursday, defending the ECB's plans to raise interest rates further, Reuters reported. The ECB has lifted rates by a combined 125 basis points over its last two meetings to combat inflation that is nearing 10%, and markets have priced in further increases at each of the ECB's meetings through next spring.

Across northern and western Europe, vegetable producers are contemplating halting their activities because of the financial hit from Europe's energy crisis, further threatening food supplies, Reuters reported. Surging power and gas prices will impact crops grown through the winter in heated greenhouses such as tomatoes, peppers and cucumbers, and those which need to be placed in cold storage, such as apples, onions and endives. European farmers are warning of shortages.

South Africa's central bank delivered another big interest rate hike on Thursday, taking its main lending rate back near pre-COVID levels as it battles to bring inflation back to target, Reuters reported. The South African Reserve Bank (SARB) raised its repurchase rate by 75 basis points (bps) to 6.25%. The rand pared gains against the U.S. dollar after the decision was announced, as some traders had positioned for a larger hike. The SARB has now raised rates for the sixth time in a row, adding a total of 275 bps to the repo rate since its latest tightening cycle began in November 2021.

Germany will nationalize Uniper, seeking to save the country’s largest gas importer that was hit hard by Russian natural-gas cuts to Europe, the Wall Street Journal reported. The German government said Wednesday that it would take a 99% stake in the energy giant and inject in €8 billion, equivalent to around $8 billion. Berlin will acquire the stake of Uniper’s parent company, Finnish utility Fortum Oyj. Uniper was Germany’s largest importer of Russian natural gas and suffered heavy financial losses after Moscow throttled supplies.

The British government announced details of a plan on Wednesday to cut energy costs for companies over the winter, after industry groups warned that soaring bills were threatening the survival of countless businesses, the New York Times reported. Beginning in October and lasting for six months, businesses, charities and other public-sector organizations, including schools and hospitals, will see the wholesale price per unit they pay for energy set at 211 pounds (about $240) per megawatt-hour of electricity and £75 for natural gas.

The European Union’s executive arm plans to outline further actions to contain an unprecedented energy crunch by reducing markets swings, boosting liquidity and lowering natural gas costs, Bloomberg News reported. The European Commission aims to publish Sept. 28 a document detailing future steps to ease volatility and increase trading volume in energy markets as surging prices have made for ballooning margin calls, in addition to measures that the bloc could take to reduce fuel prices.

The International Monetary Fund (IMF) has called on financial regulators around the world to come together to develop a “global regulatory framework” for crypto assets, CoinDesk.com reported.