Aurelia Butler

KARACHI, Pakistan (Reuters) – Pakistan’s central bank kept its key rate unchanged at 22% on Monday after a scheduled meeting of its monetary policy committee, with inflation expected to decline gradually in coming months, the bank’s governor said.Governor Jameel Ahmad told a press conference that the inflation outlook for the next fiscal year was between 20% and 22%, in line with government projections and that Pakistan’s deal with the International Monetary Fund (IMF) had not necessarily required a further rate hike.”The IMF did not say anywhere that we have to increase rates,” Ahmad said. “They said the policy stance should be aggressive and we will go forward with an aggressive policy stance.”The monetary policy committee meeting was the first since a new $3 billion bailout was approved by the IMF earlier this month for the ailing economy that had been teetering on the brink of a global debt default.Ahmad said Pakistan was on “on course” to meet the medium-term inflation target of 5-7% and that the bank would ensure it complied with the IMF requirement of keeping the open market and inter bank rates for the currency close to one another.The IMF signalled following the bailout that the bank must continue with its monetary tightening cycle to tame inflation.The State Bank of Pakistan (SBP) has raised its key policy rate by 12.25 percentage points since April 2022, to curb soaring inflation.The rise in the consumer price index rise slowed in June from a record high of 38% year on year in May, but remained elevated at 29.4%. The CPI index decreased 0.3% in June from May.The government projects inflation to average 21% for the current fiscal year that started on July 1. The IMF, however, forecasts inflation at 25.9% for the same period. Pakistan’s central bank raised the key rate by 100 basis points to 22% in an off-cycle meeting in June, just weeks after having held rates at a scheduled meeting.The bank noted on Monday that the economic uncertainty has decreased since the last meeting, while near-term external sector challenges have been largely addressed and investor confidence had improved. It projected real GDP growth of between 2% and 3% for this fiscal year.Pakistan’s government said the rates had been increased on the IMF’s demand in the run-up to the approval of the new bailout agreement. More

Massa, who is also a presidential candidate in this October’s election, said in a speech that it would be possible because of an extended swap deal with China and a new loan from the Development Bank of Latin America (CAF).Massa confirmed the repayment will be made with a $1 billion bridge loan from CAF and $1.7 billion coming from the second tranche of a swap with China, a move Buenos Aires recently made to complete part of its June payment to the IMF.Argentina, which has been grappling with a severe economic crisis with sky-high inflation and falling central bank reserves, needed to avoid a default with the Fund, with maturities of $2.6 billion due on Monday and almost $800 million due on Tuesday.”I want to bring you peace of mind – Argentina is not going to use a single dollar of its reserves to pay today’s maturity,” Massa said in a televised speech.The challenge for Argentina now, he added, is to “continue to take care of the (foreign currency) reserves while maintaining the economic activity levels.” More

WASHINGTON (Reuters) – U.S. President Joe Biden will travel to the key battleground state of Arizona and two other Western states next week as part of a travel blitz by senior administration officials touting recent economic gains and the anniversaries of key legislation.Biden will visit Arizona, New Mexico and Utah from Aug. 7-10, after a week’s vacation in his home state of Delaware, to hail the work of the Inflation Reduction Act (IRA) to combat the climate crisis and “unleash a clean energy and manufacturing boom,” an administration official said. Biden will also host an event at the White House on Aug. 16, the official added.Senior White House officials and cabinet members will fan out across the country starting this week, and continuing through the August congressional recess, to mark the anniversaries of the IRA, the CHIPS and Science Act, and the PACT Act, which benefits veterans, the official said.The U.S. economy grew at a faster-than-expected 2.4% annualized rate in the second quarter, and headline inflation has fallen sharply from the highs of 2022, pointing to a soft landing that could help Biden in the runup to the 2024 presidential election.But economists say measures of underlying price pressures have moved more slowly and the personal consumption expenditures price index, stripped of food and energy costs, remains more than double the Federal Reserve’s 2% target.The Biden administration has struggled to sell its message of economic progress to a skeptical American public and connect the dots from the legislation to future jobs and growth.This summer’s travel sprint is part of its ongoing push to get that message out. Vice President Kamala Harris will travel to Wisconsin with Commerce Secretary Gina Raimondo to highlight broadband infrastructure investments made possible by the $1 trillion bipartisan infrastructure law signed into law 20 months ago.The spate of recent legislation had boosted private investments sharply, the official said, with over $500 billion in manufacturing and clean energy investments announced since the CHIPS and the IRA were signed into law last year, and over $280 billion in infrastructure funding announced by the government.This week, Agriculture Secretary Tom Vilsack will also travel to Oregon to highlight wildfire defense grants made possible by the infrastructure law, and to Washington state to highlight climate-oriented investments in agricultural research.Energy Secretary Jennifer Granholm and White House National Climate Advisor Ali Zaidi plan to visit Puerto Rico as part of ongoing efforts to rebuild a more resilient grid in the U.S. territory and lower energy costs.Transportation Secretary Pete Buttigieg will travel to central and southern Illinois to highlight investments in clean energy, as well as Houston, Texas, to participate in a ribbon cutting for the Houston Port, the official added.Other cabinet members will visit Maine, Maryland, Nevada, Michigan and California, the official said. More

LONDON (Reuters) -Britain’s banks and building societies have until the end of August to justify to regulators why some of their savings rates are low or face sanctions, the markets watchdog said on Monday, as Bank of England rates look set to rise to their highest since 2008.While the sector has been passing on higher interest rates rapidly to mortgage customers, lawmakers have criticised lenders for not upping rates on savings worth around 1.5 trillion pounds ($1.9 trillion) at a similar speed, amid a cost-of-living crisis.The Financial Conduct Authority (FCA) set out an action plan to enforce a new duty to customers after its review found that nine of the biggest savings providers, on average, passed on only 28% of BoE rate hikes to easy-access deposits between January 2022 and May this year.The nine firms – Lloyds (LON:LLOY), HSBC, NatWest, Santander (BME:SAN) UK, Barclays (LON:BARC), Nationwide Building Society, TSB Bank, Virgin Money (LON:VM) UK, and the Co-operative Bank – passed on 51% to notice-period and fixed-term deposits over the same period.Smaller lenders offer higher savings rates than their bigger rivals, the FCA added.Five of the banks held about 260 billion pounds in easy access savings accounts offering 1% or less and they would be targeted, the FCA said. The BoE base rate is currently 5% and markets expect a hike to at least 5.25% on Thursday.The FCA said it does not expect the full BoE rate to be passed on to savers given that historically the gap is about 2%.NOT A PRICE REGULATORBanks should “speed up” decisions on savings rates to within a couple of weeks of a BoE move, Sheldon Mills, the FCA’s executive director of consumers and competition, told reporters, adding that the FCA would not be a “price regulator”.”Firms offering the lowest savings rates will be required to justify by the end of August how those rates offer fair value, according to the consumer duty that enters into force today,” the FCA said in a statement.”If they are unable to do so, the FCA will take action.”The new duty requires firms regulated by the FCA to compile evidence that they are ensuring “good outcomes” for customers across products, services, value and after-sales support.Banks and building societies offering the lowest rates have to complete a “fair value” assessment for the regulator by the end of August. Those that fall short are promised “robust” FCA action by the end of the year.Parliament’s Treasury Select Committee, said the action by the FCA represented more progress for savers.The FCA will also review the timing of changes to savings rates each time BoE rates move, publish an analysis every six months of the best and worst easy-access rates, analyse how savings products contribute to profitability and, by the end of March 2024, review how firms engage with customers.($1 = 0.7781 pounds) More