Aurelia Butler

LONDON (Reuters) – The pace and scale of interest rate hikes across major developed and emerging economies shifted into a lower gear in July with policy makers adopting a more cautious approach in the face of varied inflation rates and a lacklustre global growth backdrop. Three of the six central banks overseeing the 10 most heavily traded currencies that met in July hiked rates, while the other three kept their benchmarks unchanged, Reuters data showed. That compares to seven hikes across nine meetings in June. In July, the U.S. Federal Reserve, the Bank of Canada and the European Central Bank lifted their key rates by a cumulative 75 basis points, taking the 2023 year-to-date tally for G10 central banks to a total of 1,025 bps across 31 hikes. With no rate setting meetings for many major banks such as the Fed and ECB scheduled, August looks set to be a quiet month though the trajectory for moves beyond that was uncertain. “The Fed and ECB left the door open for additional tightening, but a Fed hike in a still very robust U.S. economy is much more likely than one by the ECB in an ailing euro area,” said Christian Keller, head of economics research at Barclays (LON:BARC).Across developing economies, more evidence of a turning in the cycle emerged with Chile becoming in July the first major central bank in Latin America to cut interest rates by 100 bps, following in the footsteps of smaller peers Costa Rica and Uruguay which had lowered benchmarks in recent months. “Chile announced a larger-than-expected rate cut, and is the first emerging market to jump on the easing bandwagon in the current cycle,” said Charu Chanana, market strategist at Saxo. “The move could be a catalyst to kickstart a broader EM easing cycle, as they went early into the tightening cycles and brought inflation under control.”Twelve out of 18 central banks in the Reuters sample of developing economies had interest rate setting meetings in July. However, nine central banks opted to keep policy unchanged, with rate hikes coming from Turkey and Russia – two countries whose monetary policy circles are determined by domestic dynamics rather than global trends. Faced with a weak rouble fuelling inflation pressures, Russia’s central bank hiked its key interest rate by a greater-than-expected 100 basis points to 8.5% in July while Turkey’s policy makers lifted the benchmark by 250 basis points to 17.5% in their quest to steer the economy onto a more orthodox track. The year-to-date tally for emerging markets stands at 1,725 bps of tightening across 24 hikes and – more than half way through the year – well below the pace and scale seen the 2022, where central banks in developing economies delivered 7,425 bps across 92 hikes. On the rate cutting side, emerging market central banks have seen three cuts reducing interest rates by 160 bps in total. More

ASUNCION (Reuters) – Paraguay is seeking more Taiwanese investment to diversify its farm-driven economy focused on exporting raw materials to China, incoming Finance Minister Carlos Fernandez Valdovinos said in an interview.Paraguay remains the only South American nation with formal diplomatic relations with Taiwan, which China claims as its own territory. As Paraguay prepares for the Aug. 15 inauguration of the next government, it has reinforced its 70-year friendship with the democratic island, even as China ramps up diplomatic and military pressure.”We are very good at producing soybeans and meat, but we must diversify,” Fernandez told Reuters on July 28 at his temporary office in Asuncion. “We ask Taiwan to help us with that, through investments from its private sector.”A Taiwan delegation including business leaders will travel to Paraguay in August for the inauguration of conservative President-elect Santiago Pena, he added. CHINA “IS NOT CONVENIENT” FOR PARAGUAYParaguayan farmers who support switching ties to China to boost the landlocked country’s agricultural exports “are not seeing the risks” that Beijing presents, Fernandez said.China, as a buyer of raw materials from Paraguay with no added value, “is probably convenient for some sectors,” Fernandez said. “But as a strategy for the economic and social development of Paraguay, it is not convenient for us to continue betting solely and exclusively on the main export sectors.”Paraguay’s cattle ranchers had been pressuring officials to gain access to the lucrative Chinese market for their beef before the April 30 election, which Pena won by a sizeable margin.Big meatpackers say they can get better prices elsewhere, as demand for more specialized cuts and processed foods grows. “China has lowered prices for beef cuts and we see the immediate effect of that across the border in Brazil and Uruguay,” said Jair Antonio de Lima, founder and president of Paraguayan meatpacking firm Concepción, in an interview.Volume sales of Uruguayan beef in the first half of this year to China have fallen as much as 39.9% from the year-ago period.”Taiwan is still an important market for us, prices there are better than in China,” Lima said.Paraguay hopes this year to conclude a lengthy certification process to export beef to the United States, which could also pave the way to other attractive markets such as Japan and South Korea, Fernandez said.ANOTHER SOVEREIGN BONDParaguay is planning to issue close to $1 billion in sovereign bonds in international markets, possibly as soon as January, Fernandez said.Proceeds will be used primarily to finance the 2024 budget and settle debts inherited from the outgoing administration which issued $500 million in 10-year sovereign bonds as recently as June.The bond offering is subject to congressional approval. Congress will debate whether to return the debt ceiling to 1.5% of Gross Domestic Product. The annual target had been raised since 2020 to ease the impact of the COVID-19 pandemic, Russia’s invasion of Ukraine and other factors.Paraguay’s fiscal deficit ballooned to 3% of GDP last year. “By 2026 or if possible sooner, we hope to reach 1.5%,” said Fernandez. More

(Reuters) – An obscure cloud service company has been providing state-sponsored hackers with internet services to spy on and extort their victims, a cybersecurity firm said in a report to be published on Tuesday. Researchers at Texas-based Halcyon said a company called Cloudzy had been leasing server space and reselling it to no fewer than 17 different state-sponsored hacking groups from China, Russia, Iran, North Korea, India, Pakistan and Vietnam.Cloudzy CEO Hannan Nozari disputed Halcyon’s assessment, saying that his firm couldn’t be held responsible for its clients, of which he estimated only 2% were malicious.In an exchange over LinkedIn, Nozari told Reuters: “If you are a knife factory, are you responsible if someone misuses the knife? Trust me I hate those criminals and we do everything we can to get rid of them.”Digital defenders say the case is an example of how hackers and ransomware gangs use small firms operating at the fringes of cyberspace to enable big hacks. Halcyon estimated that roughly half of Cloudzy’s business was malicious, including renting services to two ransomware groups. “It’s a rogues’ gallery on that through one provider,” said Halcyon executive Ryan Golden ahead of the report’s publication.Halcyon arrived at its conclusion by mapping out Cloudzy’s digital footprint, in part by renting servers directly from the firm and by tying it to known hacking operations. The cybersecurity firm CrowdStrike (NASDAQ:CRWD), which wasn’t involved in the research, said that it hadn’t seen state-sponsored hackers using Cloudzy. But it had seen other cybercriminal activity connected to it.Cloudzy’s geographic base of operations is unclear. Halcyon researchers analyzed Cloudzy’s employees’ social media, including LinkedIn and Facebook (NASDAQ:META) postings, and found the firm is “almost certainly” a front for another internet hosting company called abrNOC, which Nozari runs from Tehran. Nozari, who says he lives outside Iran but would not be more specific, told Reuters the companies are separate, although he acknowledged that abrNOC employees helped with Cloudzy’s operations. He didn’t provide details.Cloudzy is registered under its previous name, RouterHosting, in Cyprus and the U.S. state of Wyoming, according to corporate records reviewed by Reuters and confirmed by Nozari. He said the company needed U.S. domicile to be able to register internet protocol addresses in America.It’s not clear whether Nozari’s registered agent – CloudPeak Law, a Wyoming law firm based in the small city of Sheridan – was aware of the allegations against its client.A woman who answered at CloudPeak Law’s office confirmed that her firm was RouterHosting’s agent but said that, due to client confidentiality, “that is the extent of what anyone in our firm is going to be able to tell you.” The firm didn’t respond to a follow-up email.Cloudzy’s business model is typical of several small virtual private server providers that rent internet hosting services in exchange for cryptocurrency, no questions-asked, said Adam Meyers, an executive with CrowdStrike.“There’s a whole ecosystem of ne’er-do-well kind of folks who are in this business,” he said. More

China will encourage financial institutions to offer targeted and diversified financial support to some small and medium-sized enterprises in the manufacturing sector, according to a joint statement by the industry and finance ministries, financial and securities regulators and the central bank.Small and medium-sized enterprises in key industrial sectors will also be offered appropriate products for foreign exchange hedging, the statement said. Earlier on Tuesday, China’s top economic planner announced an extension of loan support tools for small businesses until the end of 2024, vowing to expand credit for private firms and meet their demand for land. The flurry of initiatives to help to private businesses comes after authorities vowed to make the sector “bigger, better and stronger” after small businesses were squeezed during three years of COVID curbs. The private sector accounts for 60% of China’s gross domestic product and 80% of urban jobs. Investors have been awaiting concrete stimulus measures as data suggested the economy still struggled in July. Chinese stocks closed down on Tuesday after a sharp rebound in recent sessions.Private fixed-asset investment shrank 0.2% year-on-year in the first half of 2023, in contrast to an 8.1% rise in investment by state entities, highlighting weak private sector confidence. More