Aurelia Butler

Bangko Sentral ng Pilipinas Governor Felipe Medalla said in a telephone message to Reuters that a pause in interest rate increases was possible “if the April CPI (consumer price index) is not higher than the March CPI”.Medalla said a “zero or negative month-on-month inflation” may also support the case for a rate hike pause. Philippine headline inflation eased for a second consecutive month in March to 7.6% from 8.6% in February but it remained above the central bank’s 2%-4% target for the year.To tackle inflation, the BSP has raised its benchmark interest rate by 425 basis points since May last year to 6.25%. Medalla has said future policy moves would be data-dependent. It next meets on May 18 to review policy. More

The writer is a former president of Colombia, a Nobel Peace Laureate and a member of The Elders, an NGOWorld Bank/IMF governors meeting in Washington this week have a historic opportunity to address the triple crises of climate, debt and poverty. They should restore trust in multilateralism by setting a high level of ambition for the international financial institutions (IFIs) to turbocharge their work addressing some of the world’s biggest challenges. The challenges are urgent. An annual $1tn of external finance would help developing countries protect their people from growing climate impacts, transition their economies and restore nature. But a 2009 pledge of $100bn a year has still not been met. Meanwhile, 60 per cent of low-income countries are in, or close to, debt distress. The economic shocks from the pandemic and Russia’s war on Ukraine exacerbate inequality. The World Bank estimates that nearly 100mn more people now live in extreme poverty than before the pandemic.World Bank governors look set to make incremental changes, perhaps $5bn in extra annual lending — nowhere near the tripling of resources necessary. Given the front-loading of loans for Covid, lending may actually decrease next year and, with resources scarce, differing shareholder views on IFI priorities risk worsening global mistrust. The sheer scale of need demands a paradigm shift. The international response must be much bigger. We need more private capital invested in developing countries, and more international public money to both facilitate that investment and supplement domestic resources. But the cost of capital for most developing countries is too high, the international system for helping those with debt difficulties isn’t working, and the richer nations don’t want to put enough money into solving problems they have partly caused. The IFIs are the most efficient way to finance both national development and global public goods. Yet they are conservative and disinclined to innovate at scale. We need more IFI lending, mobilising as many extra resources as possible while protecting the poor. Ideas for how to do this include making better use of existing IFI capital, capital increases, more concessional finance, more private investment, creative use of the IMF’s special drawing rights to lower interest rates, innovative taxes on those who profit most from fossil fuels. Some of these may carry risks — but the risks to us all of inaction on climate, pandemics and poverty are enormous.With enough additional money, it’s easier to resolve the supposed trade-offs of climate versus development, and national priorities versus global public goods. It is not a choice of a healthy economy or a healthy planet. We can’t have one without the other. Nor should the countries that have done least to cause climate change get fewer resources for their priorities. Let’s have zero emissions and zero poverty.Decisions about exactly how to spend extra IFI resources can come later. The task now is to build confidence that an ambitious deal can be brokered. Announcements from these spring meetings will be a small step. The appointment of a new World Bank president this year will be an opportunity to change the conversation about bigger steps. Balanced deals involve global political leadership. There are ample opportunities at international meetings this year. But all will fail unless a transformational package is negotiated to meet the concerns of all countries. Ultimately the big decisions are for shareholders. With other multilateral institutions stuttering, and great power rivalries jeopardising so much, we need the IFIs to help solve the world’s economic problems more than ever — and the political will for them to scale up dramatically. The theme of the World Bank/IMF meetings is “reshaping development for a new era”. Leaders who build the global alliance to deliver prosperity for people and planet will earn the world’s gratitude for many years to come. More

The massive stimulus deployed by Haruhiko Kuroda, whose term as governor ended on Saturday, helped end deflation but failed to sustainably achieve the central bank’s 2% price goal because inflation expectations remained low, Nakaso was quoted as saying in an interview with the Nikkei newspaper.As a result, the BOJ had to sustain ultra-loose policy for a prolonged period despite rising costs such as the pain on banks and dysfunction caused in the bond market, he said.”The increasing side-effects are a sign the policy effect (of YCC) is working its way through the economy,” Nakaso said. “When the appropriate timing comes, the BOJ’s new leadership will likely modify or abolish YCC,” or yield curve control.The next challenge will be to end negative interest rates and start a full-fledged policy normalisation, Nakaso said.There need to be clear signs Japan’s output gap is improving and wages would rise sustainably for the BOJ to abandon negative rates, he said.”The BOJ will make the appropriate decision when it confirms that the momentum for hitting 2% inflation can be sustained,” he said on the expected timing of an end to negative rates.Under YCC, the BOJ guides short-term interest rates at -0.1% and caps the 10-year bond yield around zero as part of efforts to sustainably hit 2% inflation.Markets are rife with speculation that the BOJ will tweak or end YCC under Kazuo Ueda, who became its governor on Sunday, as inflation exceeds 2% and the central bank’s huge bond buying draws criticism for distorting market pricing.Nakaso, who had been considered among candidates to succeed Kuroda, served as deputy BOJ governor for five years until 2018. More

“What we want to discuss, after the tax reform, is a rule that ends the chopping and changing, and gives greater stability to this type of spending,” Haddad said in an interview published on Saturday by newspaper Folha de S.Paulo.Progressive governments do away with rule that links spending to revenue growth, he said, and then conservative governments come along and reintroduce them, ending their obligation to spend fixed amounts in areas such as education and health.Brazilian governments permanently face spending difficulties because 95% of the federal budget is tied to obligatory expenditure, leaving only 5% for discretionary spending.When they presented the new fiscal framework that proposes limiting real growth in public spending, Treasury officials said it would be necessary to revise the floor for spending on health and education, which is currently linked to the level of government revenues, to avoid reduction in other areas.Haddad said he could not anticipate which expenses would be revised, whether they would include the readjustment of the minimum wage and the remuneration of public servants, because those decisions were up to President Luiz Inacio Lula da Silva. More