Aurelia Butler

KARACHI (Reuters) -Pakistan’s central bank on Monday held its key rate at 22% for the fifth policy meeting in a row and increased its full-year inflation projections. The governor of the State Bank of Pakistan said the decision was warranted due to “elevated” inflation – which was 29.7% in December. He said a rise in the bank’s average inflation forecast for the fiscal year ending in June to 23-25%, from a previous projection of 20-22%, was due to rising gas and electricity prices.The decision is the last under a caretaker government before general elections due next week and comes as Pakistan undertakes reforms linked to a $3 billion Standby Arrangement with the International Monetary Fund (IMF). “SBP opted for a wait and see approach during this policy (meeting) and refrained from abruptly starting a monetary easing cycle,” said Tahir Abbas, head of research at Arif Habib Limited.”Economic indicators are gradually improving and inflation is expected to decline significantly from March 2024 onwards, where we believe that (the) SBP is expected to start a monetary easing cycle,” he said.The country’s external accounts and foreign exchange reserves have improved, the current account deficit is expected to shrink, the central bank’s governor Jameel Ahmad said.Pakistan’s key rate was raised to an all-time high of 22% in June to fight persistent inflationary pressures and to meet one of the conditions set by the IMF for securing the bailout.While the rescue programme has helped avert a sovereign debt default, some of the attached conditions, such as raising its benchmark interest rate, increasing government revenue, and increasing electricity and natural gas prices, have complicated efforts to curb inflation and have dampened business sentiment. But Ahmad said that Pakistan was in a “better position” since signing the IMF stand-by agreement. Despite negative real rates, the business community had been pushing for a rate cut for some respite amidst the economic challenges. More

KORSOR NAVAL BASE, Denmark (Reuters) – Denmark on Monday sent a frigate to the Red Sea, where it will participate in a U.S.-led coalition to safeguard commercial traffic against attacks by Yemen’s Houthi militants.The Iran-aligned Houthi have launched waves of exploding drones and missiles at commercial and navy vessels since Nov. 19, in response to Israel’s military operations in Gaza.In response, shipping firms have since December diverted hundreds of vessels around southern Africa’s Cape of Good Hope, a journey that takes 10-14 days longer and is more costly than the passage via the Red Sea and Suez Canal.Denmark, home to shipping company Maersk, is sending the 139-metre Iver Huitfeldt frigate to the area as part of Operation Prosperity Guardian formed last month to protect merchant vessels.“If you think that the answer to the Houthis is to simply allow them to terrorise free world trade, you are on the wrong track,” Defence Minister Troels Lund Poulsen told reporters on board the frigate before it departed the Korsor naval base.”That is also why we, together with the Americans and the British, are now showing responsibility and sending a signal that we will not tolerate what is happening,” the minister said.The Houthi rebels last week fired three anti-ship ballistic missiles toward a U.S.-flagged container ship operated by Maersk.The frigate carries U.S.-made Harpoon anti-ship missiles and ESSM surface-to-air interceptor missiles, but will not be able to defend itself or other ships against ballistic missiles, said head of the Danish Navy Command, Henrik Ryberg.Denmark has for years planned to buy the more powerful and longer-range SM-2 and SM-6 missiles capable of defending against ballistic missiles but has not got delivery of those yet, he said.Danish special operation forces, which have previously been used to combat pirates in the Gulf of Guinea, will not participate in this operation, Ryberg said.The frigate with a crew of around 175 will begin operations in the Red Sea once the Danish Parliament approves a resolution to send the warship into the area, which is expected on Feb. 6. It will not participate in U.S.-led offensive operations against the Houthis, the minister said.Danish shipping companies annually send about 2,500 ships through the Red Sea, a route that accounts for about 15% of the world’s shipping traffic.”Right now, we have very few Danish ships sailing through the strait, simply because it is too unsafe. But in order to return, we need more security and that’s what the coalition is all about,” said Anne Steffensen, head of industry group Danish Shipping. More

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Kalinak, speaking on state broadcaster RTVS’s Sunday debate show, said Slovakia would seek to use a discount for the possible purchase of attack helicopters that it received from the U.S. last year.The discount came after Bratislava sent its retired MiG-29 fighter jets and a S-300 air defence system to Ukraine.”We have opened the debate whether it would be possible to use this discount as well for the Patriot (system),” Kalinak said.Bratislava received the U.S. offer last year for 12 new Bell AH-1Z Viper helicopters at a two-thirds discount, with part of the price covered under the U.S. Foreign Military Financing programme after it sent its old fighter jets to Ukraine.The offer came before the new government that includes Kalinak took power in October 2023. Prime Minister Robert Fico’s government has halted supplies of military aid to Ukraine from officials stockpiles.Kalinak said that while the helicopters under discussion were for offensive purposes, Slovakia’s priority should be on defence and specifically air defence.The country borders Ukraine and has been part of NATO efforts to bolster its eastern flank.Slovakia currently has a Patriot system from Italy stationed in the country set to stay until April.Kalinak said Slovakia was also in talks with Poland and Israel about short- to medium-range air defence systems. More

Chinese policymakers have taken steps to support the country’s stock markets following recent sharp falls.”Listed companies are an important micro foundation for high-quality economic development,” He said at a national video conference on promoting the development of listed companies.”Promoting high-quality development of listed companies helps to achieve high-level technological self-reliance, accelerate the construction of a modern industrial system and enhance market confidence.”Government departments should step up support for high-quality listed firms to boost confidence and stabilise capital markets, the vice premier said.He also addressed property financing at the conference, noting that localities should seize the opportunity to establish and efficiently operate urban real estate financing coordination mechanisms, the report added.A Hong Kong court on Monday ordered the liquidation of property giant China Evergrande (HK:3333) Group, dealing a fresh blow to confidence in the country’s fragile property market as policymakers step up efforts to contain a deepening crisis. More