Headlines

Pakistan's central bank raised its benchmark interest rate on Monday by 150 basis points to 13.75%, the second hike in less than two months, as the South Asian nation grapples with a sinking economy, Reuters reported. The key interest rates have been hiked by 400 bps in less than two months, according to the central bank. "This action, together with much needed fiscal consolidation, should help moderate demand to a more sustainable pace while keeping inflation expectations anchored and containing risks to external stability," the State Bank of Pakistan (SBP) said in a statement.

The Swiss National Bank will tighten monetary policy if inflation in Switzerland remains persistently high, governing board member Andrea Maechler said in an interview published on Monday, Reuters reported. The European Central Bank on Monday became the latest institution to signal it was hiking rates to combat soaring inflation, following similar moves by the U.S. Federal Reserve and the Bank of England. The SNB could follow suit, should Swiss inflation remain outside its target range 0-2%. April saw the highest inflation rate in Switzerland for 14 years, with prices rising by 2.5%.

The German economy, Europe's largest, is on track for a tepid economic recovery but risks are tilted to the downside and fiscal policy should be flexible in an uncertain environment, the International Monetary Fund said on Monday, Reuters reported. In a statement after a mission to Germany, the IMF said it projected growth to slow to about 2% in 2022, picking up in 2023 to slightly above 2% if energy prices and supply bottlenecks subside, and COVID-19 infections remain under control. "Growth would then decline toward potential after 2024," the IMF said in its so-called Article IV report.

Chile on Friday accepted a short-term liquidity line (SLL) from the International Monetary Fund (IMF) of around $3.5 billion, aiming to support the South American country's economy as it rebounds from the COVID-19 pandemic, Reuters reported. Chilean authorities also notified the IMF that of their decision to exit the current two-year flexible credit line, which was set to expire at the end of the month.

Brazil's Economy Ministry on Friday said it needs to freeze 10 billion reais ($2.1 billion) in expenditures to comply with the spending cap rule, which limits spending growth to the previous year's inflation, Reuters reported. The limitation highlights President Jair Bolsonaro's difficulties to approve new expenses that are not yet included in the budget while seeking reelection in October.

Mexican inflation is forecast to have slowed in the first half of May, although still far above central bank targets, a Reuters poll showed on Friday, reinforcing expectations of continued interest rate hikes through the rest of the year. The median forecast of 10 analysts surveyed was for annual consumer price inflation to have dropped to 7.58% in the first half of May, down from 7.65% in the second half of April. Annual core inflation, which strips out some volatile food and energy items, was seen at 7.22%, down slightly from 7.27% in the previous two weeks.

Thai AirAsia X, the long-haul budget airline under the AirAsia group, said its application for bankruptcy protection was accepted by Thailand’s Central Bankruptcy Court, Forbes reported. "Thai AirAsia X has entered into rehabilitation at an appropriate time with tourism recovering and the nation reopening”, Patima Jeerapaet, chief executive of Thai AirAsia X said in a statement released on Thursday.

China cut its benchmark reference rate for mortgages by an unexpectedly wide margin on Friday, its second reduction this year as Beijing seeks to revive the ailing housing sector to prop up the economy, Reuters reported. Senior officials have pledged further measures to fight a slowdown in the world's second-biggest economy, hit by COVID-19 outbreaks that prompted stringent measures and mobility restrictions and causing huge disruptions to activity.

China is quietly ramping up purchases of oil from Russia at bargain prices, according to shipping data and oil traders who spoke to Reuters, filling the vacuum left by Western buyers backing away from business with Russia after its invasion of Ukraine in February. The move by the world's biggest oil importer comes a month after it initially cut back on Russian supplies, for fear of appearing to openly support Moscow and potentially expose its state oil giants to sanctions.

Seizing Russian state assets to help finance the rebuilding of war-torn Ukraine remains a possibility, German Finance Minister Christian Lindner said on Friday, but he added that no decision on the matter was taken at a meeting with his G7 counterparts, Reuters reported. "We talked about the continuation of sanctions in connection with Ukraine and discussed the issue of the confiscation of Russian assets," Lindner said, wrapping up day two of the talks.