Headlines

Global airlines hit out at governments on Monday for what the industry's leading ambassador termed their "shambolic" handling of the COVID-19 crisis, and urged nations to rip up the playbook of widespread border closures for any future pandemics, Reuters reported. "The cost of government mismanagement was substantial. It devastated economies, disrupted supply chains and destroyed jobs," Willie Walsh, director general of the International Air Transport Association, told an industry summit.

Central banks around the world are raising interest rates rapidly, except one. The Bank of Japan affirmed on Friday that it wanted rates around zero, even if investors are using that as a reason to sell the yen, the Wall Street Journal reported. “It is not appropriate to tighten monetary policy at this point,” said Gov. Haruhiko Kuroda. “If we raise interest rates, the economy will move into a negative direction.” Japan’s outlier status partly reflects its less-serious inflation problem—prices rose 2.5% overall in April, compared with more than 8% recently in the U.S.

Peru's central bank on Friday said it had reduced its growth projection for 2022 to 3.1% from 3.4% previously amid global economic volatility and a recent disruption to mining activity in the Andean nation, Reuters reported. The bank maintained its estimate for 3.2% GDP growth in 2023, bank president Julio Velarde said in a presentation accompanying its latest macroeconomic projections report. It saw a lower fiscal deficit for 2022 of 1.9% of GDP compared to a previous 2.5% projected in March, principally due to higher fiscal revenues, Velarde said.

Canadian Finance Minister Chrystia Freeland expressed confidence on Thursday in the Bank of Canada's ability to rein in surging inflation and keep price gains from becoming entrenched, but said there was no guarantee the economy would avoid a recession, Reuters reported. "The Bank has begun the work of bringing inflation back within target, and it has the tools and the expertise it needs to keep inflation from becoming entrenched," Freeland told a business audience in Toronto.

Australia's central bank decided to raise interest rates by a larger 50 basis points this month because policy would still be very stimulative and it needed to be normalised to stop high inflation becoming entrenched, Reuters reported. Minutes of its June 7 Board meeting, showed the Reserve Bank of Australia (RBA) discussed lifting the 0.35% cash rate by 25 basis points or 50 basis points and chose the latter as inflation had already outpaced all expectations.

Ukraine is expected to start selling electricity to Slovakia and Hungary this month, a move that could boost revenues for power generators in the country, sources told Reuters. The expansion of power trade with Europe, which is currently curtailed to limited amounts sold to Poland and Moldova, could increase cashflow to Ukrainian utilities hit by a drop in domestic electricity since the Russian invasion, while providing more energy to the 27-country European Union as it grapples with reduced gas supplies from Russia.

Central banks across Europe raised interest rates on Thursday, some by amounts that shocked markets, and hinted at even higher borrowing costs to come to tame soaring inflation that is eroding savings and squeezing corporate profits, Reuters reported. Fuelled initially by soaring oil prices in the wake of Russia's invasion of Ukraine, inflation has broadened out to everything from food to services with double digit readings in parts of the continent. Such levels have not been seen in some places since the aftermath of the oil crisis of the 1970s.

The European Central Bank poised to raise interest rates for the first time in 11 years vowed Wednesday to create an unspecified market backstop that could buffer member countries against financial turmoil like that seen during a debt crisis more than a decade ago, the Associated Press reported. Pressed by a government bond selloff, the bank’s governing council called an unscheduled meeting to address worrisome market shifts following the bank’s decision to hike rates in July and September.

Bond-buying under any new anti-crisis tool from the European Central Bank would probably involve selling other securities in its portfolio so purchases don’t upset efforts to curb record inflation, Bloomberg News reported. Policy makers are determined to neutralize any interventions in debt markets so they don’t exacerbate upward price pressures, said the people, who asked not to be identified because the discussions are private.

Russia promised on Thursday to speed up talks about increased gas sales to China and warned that Europe would pay a hefty price for its oil embargo against Russia, Reuters reported. Deputy Prime Minister Alexander Novak said Europe would pay an extra $400 billion in higher energy prices and could face a shortage of oil products. He did not give a time frame. Russia is heavily reliant on its multi-billion dollar energy exports for its financial health, while more than half the European Union's gas imports come from Russia, leaving the bloc exposed to any supply disruptions.