Headlines

Bank of Korea Governor Rhee Chang-yong highlighted rapidly rising private and public debt and an aging population as threats to South Korea’s economic outlook in his inauguration speech. Rhee took office Thursday after being nominated by President Moon Jae-in almost a month ago. He has so far expressed support for higher interest rates to rein in inflationary pressures while pointing to economic risks from the war in Ukraine, China’s virus lockdowns and the Federal Reserve tightening.

The U.K. seized 2 million pounds ($2.61 million) from a London-based fintech firm, saying that the funds were linked to a $150 million U.S. wire fraud conspiracy, Bloomberg News reported. QPay Europe Ltd., which offers due diligence and underwriting services, agreed to forfeit the money following court proceedings, the Financial Conduct Authority said in a statement Thursday. The funds were routed repeatedly through different accounts in several countries without appearing to have any legitimate purpose, the FCA said.

Bank of England policy maker Catherine Mann said she’s considering whether interest rates need to rise by more than a quarter point next month, reigniting the debate about a quicker pace of tightening for monetary policy, Bloomberg News reported. Money markets cranked up BOE tightening wagers after the remarks, betting on at least one half-point hike by August. Yields on U.K. two-year government bonds -- which are the most sensitive to monetary policy -- surged by as much as 16 basis points to 1.72%, the highest since 2009.

Canada's annual inflation rate accelerated faster than expected in March, hitting a 31-year high amid broad price pressures, official data showed on Wednesday, pointing toward another oversized rate hike from the Bank of Canada in June, Reuters reported. The headline rate hit 6.7% in March, well above analyst expectations of 6.1% and a full percentage point higher than in February. It was the 12th consecutive month above the central bank's 1-3% control range and just short of the 6.9% hit in January 1991.

Canadian home price and sales growth will moderate in the coming years from recent pandemic-era highs but stay elevated in 2022 as higher employment and immigration drive demand, the national housing agency said on Thursday, Reuters reported. Sales and price growth will continue to moderate more in line with historical averages by late 2023 or early 2024 amid higher mortgage rates but elevated price levels will persist, putting greater pressure on affordability for new homebuyers, the Canada Mortgage and Housing Corporation said in its 2022-2024 market outlook.

Mexico’s state-owned oil giant Petroleos Mexicanos will resume paying its debt maturities this year, ending a government policy of covering its amortizations to help the beleaguered driller shore up its finances, according to a Finance Ministry official, Bloomberg News reported. The Finance Ministry no longer needs to make debt payments because of the extra revenue Pemex is getting from higher oil prices, according to the official, who asked not to be named discussing a private matter.

Russia’s payment of rubles on two dollar bonds was ruled a potential default by a derivatives panel, bringing holders of insurance contracts on the debt closer to a payout, Bloomberg News reported. The Credit Derivatives Determinations Committee said Wednesday that a “Potential Failure-to-Pay” event occurred for credit-default swaps when Russia paid rubles after foreign banks declined to process U.S. currency transfers. The group, which includes Goldman Sachs Group Inc., Barclays Plc and JPMorgan Chase & Co., said the potential failure happened on April 4.

All large euro zone banks can withstand a full write-off of their Russian exposure and still respect their capital requirements, the European Central Bank's top supervisor Andrea Enria said in a letter published on Wednesday, Reuters reported. Russia's invasion of Ukraine and the ensuing Western sanctions have already forced the European units of some Russian banks out of business and caused some European lenders to leave Russia or consider such a move.

Governments must target fiscal support to vulnerable populations hit hardest by rising energy and food prices, and now facing growing food insecurity as a result of Russia's war in Ukraine, the International Monetary Fund (IMF) said on Wednesday. Higher food and energy prices have heightened the risks of social unrest, especially in low-income countries already struggling with high debt levels after the COVID-19 pandemic, and now facing higher borrowing costs amid interest rate hikes, the IMF said in its latest report on global fiscal developments.

The U.S. rolled out new sanctions on Wednesday against more than 40 individuals and entities accused of evading the ongoing wave of penalties imposed on Russia as punishment for invading Ukraine, the Associated Press reported. The sanctions include the first set of penalties against cryptocurrency mining firms in relation to the war. The Treasury Department’s sanctions arm designated the commercial bank Transkapitalbank, which has operations in China and the Middle East. Transkapitalbank is a Russian privately owned commercial bank which the U.S.