Headlines

China should lower interest rates and boost infrastructure investment to ensure the economy will grow by at least 5% next year, according to an influential Chinese think tank, Bloomberg News reported. Authorities need to boost domestic demand, including consumption and investment, to counter the property slump and any slowdown in exports, Zhang Bin and Zhu He, research fellows at China Finance 40 Forum, wrote in an article Monday.

Japanese Prime Minister Fumio Kishida indicated he could consider writing guidance for companies on share buybacks, triggering a dip in the nation’s stock market that’s been boosted by such repurchases in recent years, Bloomberg News reported. Kishida said introducing “guidelines” on buybacks would be appropriate, in response to a question in parliament from opposition lawmaker Takayuki Ochiai. The Japanese premier added that caution would be needed in implementing any strict regulations.

Japan pledged $3.4 billion in its largest contribution to the International Development Association (IDA) of the World Bank, to ensure the recovery of low-income countries from the COVID-19 pandemic, finance ministry officials said on Tuesday, Reuters reported. The pledge came as Japan hosted an online meeting on the 20th replenishment of the IDA, brought forward by a year at the initiative of the world's third biggest economy, amid concern about shortage of funds to boost vaccines and medical systems.

Hungary's central bank raised its base rate by 30 basis points to 2.4% on Tuesday, its highest level since May 2014, and pledged further rate hikes next year in order to anchor rising inflation expectations, Reuters reported. The National Bank of Hungary (NBH) also raised the rate on its overnight deposit facility by a larger-than-expected 80 basis points to 2.4%, aligning it with the base rate in a surprise move which the bank said was aimed at supporting the stability of swap market rates. The base rate decision was in line with a Reuters poll forecast last week.

The International Monetary Fund urged the Bank of England on Tuesday to avoid an "inaction bias" when it comes to raising interest rates as it forecast British inflation would hit a 30-year high of around 5.5% next year, Reuters reported. The BoE has said rates will need to rise to ensure that consumer price inflation - currently 4.2% - returns to its 2% target in the next couple of years.

Britain will remove all 11 countries from its COVID-19 travel red list on Wednesday, Health Secretary Sajid Javid told parliament, Reuters reported. "Now that there is community transmission of Omicron in the UK and Omicron has spread so widely across the world, the travel red list is now less effective in slowing the incursion of Omicron from abroad," he said.

France plans to require banks to build up their capital reserves again after easing requirements during the coronavirus crisis to keep credit flowing, the finance stability council said on Monday, Reuters reported. The council said it expects to raise the countercyclical capital buffer from 0% to the pre-crisis level of 0.5% at its next meeting in March. The council, which is chaired by Finance Minister Bruno Le Maire and includes the central bank governor, said that economic and financial conditions justified increasing the amount of extra capital banks have to keep on hand for a rainy day.

Parliament has passed amendments to the Companies Act that reform Cayman’s restructuring regime for insolvent companies, the Cayman Compass reported. The changes introduce a formal restructuring procedure under the supervision of a restructuring officer outside the traditional winding-up process. Distressed companies can now apply to the Grand Court for a restructuring officer to be appointed when the company is unable to pay its debt and aims to present an alternative arrangement or compromise to its creditors.

A wave of selling swept through Chinese developers’ bonds and shares after the sudden plunge in a major property firm’s notes renewed concern over the health of the sector, Bloomberg News reported. Shimao Group Holdings Ltd.’s dollar notes dropped as much as 12 cents on the dollar, with the selloff spreading to other company bonds including Sunac China Holdings Ltd. and KWG Group Holdings Ltd. Trading was halted in six of Shimao’s yuan bonds after they plunged, with one falling more than 50%.

India is working out a package on an urgent basis to assist Sri Lanka, following finance minister Basil Rajapaksa's New Delhi visit that focussed on measures to tide over an economic crisis that the island nation is facing, the Economic Times of India reported. India is expected to extend a food & health security package to Sri Lanka on an urgent basis, along with an energy security package and currency swap, and also push Indian investments, officials told ET.