Aurelia Butler

LONDON (Reuters) – Insurance and compliance costs for transport companies are set to stay high after Western countries imposed trade restrictions on Russia with the prospect of broader sanctions putting more pressure on global trade, a survey showed.Russia has faced multiple sanctions since last year from Western countries including the United States, the European Union and the UK due to its invasion of Ukraine. These measures have added to existing sanctions on countries such as Iran and Venezuela, which have increased commercial burdens for companies. In a first study by law firm DWF, which canvassed leading transport companies in the road, rail, sea and air sectors, 64% expected increased insurance costs, and that number also saw international sanctions becoming more common in future.The survey, which polled executives from companies with revenues ranging from $1 billion to $100 billion – also found that 56% believed that a world with more sanctions would be riskier for their businesses.”Russia sanctions are adding to the considerable burden of compliance costs for businesses,” Jonathan Moss, DWF’s global head of transport sector, told Reuters.”The risk of non-compliance is serious as custodial sentences and large fines are a constant threat and enforcement actions are likely to be instigated more regularly in the coming months.”Moss said there had been notable rises in insurance premiums in aviation, marine, energy, political risk and cyber security.”A rise in claims with jets stranded in Russia and vessels stuck in Black Sea ports, together with expected future losses, a collapse in investment returns, reduced capacity and recessionary pressures have contributed to unprecedented high premiums in some lines of business,” he said.”A perfect storm is brewing. The inability for insureds to access their asset with insurers unable to investigate claims, send in loss adjusters and transfer payment to experts because of sanctions rules are also contributing to upward pressure on rates.”The survey – which was conducted between October and November last year – canvassed 50 senior executives with transport companies including the container and dry bulk shipping sectors, air and road cargo and freight forwarding. More

Analysts polled by Reuters had expected the annual rate to fall to 5.4% in February from January.STORIES:Market reaction: CAD/Link: COMMENTARYMICHAEL GREENBERG, SVP AND PORTFOLIO MANAGER, FRANKLIN TEMPLETON INVESTMENT SOLUTIONS”I think the Bank of Canada will be a little bit happy to see some of those core measures that they like to look at, come down off their highs from the middle or late last year. So that that’s good news, still elevated from an absolute sense, but in the right direction.””Our view is probably that with this banking stress that we’re seeing now, which obviously is not in the data yet, we should eventually see inflation continue to cool back down. The banking stresses probably crimps lending and all else equal economic growth a little bit.””That should probably keep the Bank of Canada on hold at the next meeting, assuming that the banking system continues to calm, but inflation is still quite elevated and a major concern.”ANDREW KELVIN, CHIEF CANADA STRATEGIST AT TD SECURITIES”I think the Bank (of Canada) is probably happy to see it. It’s in-line with the market’s expectation very broadly. It’s a very modest downside surprise. You get the broader trends here. You look at core inflation that is decelerating by about two-tenths year-over-year on average. And I think importantly, this also brings headline inflation tracking for Q1 below the BOCs forecast from January. So it just makes it easier for them to maintain their hold. Ultimately, there is more work that needs to be done if the BOC is going to stay at 4.5%. But it is certainly a step on the path towards the 2% inflation that the BOC has in their forecast. So they’ll welcome this.””I will say it’s all a little bit secondary given some of the volatility in the financial sector. But in an environment where policymakers are able to ring-fence some of the financial contagion, and we go back to an environment where we’re just looking at the fundamentals, this sort of CPI print is consistent with the BOC staying at 4.5% for all of 2023.”JAY ZHAO-MURRAY, MARKET ANALYST AT MONEX CANADA”While the Bank of Canada’s last rate statement was mildly hawkish, following the latest global banking troubles and this February inflation undershoot, the odds of another hike this cycle have dropped sharply. While the market seems a bit overzealous in pricing two cuts by year-end, we agree that the balance now tilts dovish. The instant USD-CAD rally off the back of the data reflects this, although it’s pulled back from the highs.” More

Investing.com — Treasury Secretary Janet Yellen is set to bolster hopes of more official support for U.S. banks later, in a speech that talks up the importance of midsized banks in particular.According to the text of a speech that Yellen will give to the American Bankers Association, Yellen will defend as “necessary” the steps taken to support Silicon Valley Bank after its collapse earlier this month, after a massive run by its depositors.“Similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion,” Yellen will say, according to various reports citing the advance text.The Treasury had intervened along with the Federal Reserve and Federal Deposit Insurance Corporation to guarantee all of SVB’s deposits after it failed earlier this month, despite the fact that due to its almost exclusively corporate customer base, nearly all of its deposits were above the $250,000 federally insured limit.However, that hadn’t been enough to stop sharp falls in the stock prices of other midsized banks, some of whom are seen – like SVB as being structurally short of liquid assets that they could sell to meet a deposit run.The speech comes a day after Bloomberg reported that Treasury officials are looking at ways to extend full insurance of bank deposits across the whole system, at least temporarily, while a more durable solution to the problems of regional banks is found.Fear that other regional banks could go the same way as SVB had triggered sharp falls in several midsized banks in recent days, notably First Republic Bank (NYSE:FRC). These were exacerbated by the hasty rescue of Credit Suisse (SIX:CSGN) by Swiss authorities at the weekend. However, almost all of them had shown signs of stabilizing on Monday.Yellen will say later that “aggregate deposit outflows from regional banks have stabilized” after a record injection of liquidity from the Federal Reserve through its standing facilities last week. Yellen will note that “the Fed facility and discount window lending are working as intended to provide liquidity to the banking system.” More

COLOMBO (Reuters) – Sri Lanka will get the first $330 million tranche of an International Monetary Fund bailout in the next two days, the global lender said on Tuesday, putting the onus on the cash-strapped country to rein in its debt to sustainable levels.Economic mismanagement coupled with the impact of the COVID-19 pandemic left Sri Lanka severely short of dollars for essential imports at the beginning of last year, tipping the island nation into its worst financial crisis in seven decades.The IMF’s executive board on Monday approved a nearly $3 billion bailout with the endorsement expected to catalyse additional support to the tune of $3.75 billion from the likes of the World Bank, the Asian Development Bank and other lenders.This was the 17th IMF bailout for Sri Lanka and the third since its decades-long civil war ended in 2009. Graphic: IMF to Sri Lanka’s rescue again – https://www.reuters.com/graphics/SRI%20LANKA-CRISIS/IMF/gkvlwblgxpb/chart.png The office of President Ranil Wickremesinghe said the programme would enable it to access up to $7 billion in overall funding.”Sri Lanka is no longer deemed bankrupt by the world,” Wickremesinghe said in a video statement. “The loan facility serves as an assurance from the international community that Sri Lanka has the capacity to restructure its debt and resume normal transactions.”Getting financial assurance from China, its largest bilateral creditor, was the last remaining hurdle for Sri Lanka in securing the IMF bailout. Once China confirmed its backing this month, the IMF went ahead with the deal.Sri Lanka, which also needed support from other major lenders like India and Japan, thanked the international community, including the United States, for talking to the Chinese government to back its debt restructuring plan.NO IMMEDIATE RELIEFThe IMF funding will, however, not immediately help millions of Sri Lankans, who are being squeezed by soaring costs of living, higher income taxes and a 66% increase in power tariffs.Half of Sri Lanka’s families have been forced to reduce portions they feed their children, according to a survey by Save the Children released this month.Citizens waking up on Tuesday to news of the IMF approval, said they hoped the funds would reduce some of their burden.”It must be spent to solve the country’s problems,” said vegetable seller Amilanath Jayatilake, 35, in Colombo. “If they reduce the price of fuel and food items and give people some relief, then it’s good.”The IMF deal clears the way for Sri Lanka to restructure about $58 billion debt owned by bilateral and private bond holders, according to latest government data. The IMF expects the economy to expand by 3% in 2026 after contracting by 3% during the current year. Graphic: Sri Lanka’s growth card – https://www.reuters.com/graphics/SRI%20LANKA-CRISIS/IMF/lbvggjloyvq/chart.png Shehan Semasinghe, state minister of finance, said the IMF bailout was “absolutely essential”.”But now we have to patiently focus on very difficult reforms going ahead,” he said in a statement late on Monday.The Colombo Stock Exchange All-Share index ended down 1%, while the Sri Lankan rupee was up about 6.5% against the dollar.Bonds were up by 0.79 cents to 1.67 cents across tenors, with the March 2029 bond leading the gains.TOUGH ROAD AHEADPeter Breuer, senior IMF mission chief for Sri Lanka, Asia and Pacific Department, said debt sustainability was one of the key criteria for the IMF to approve a bailout for any economy.Sri Lanka’s disbursements from the bailout package would be tied to reviews every six months, Breuer said, adding that the IMF had not set any growth target but had put in place an inflation band of 12%-18% for the country to achieve by end of 2023.Sri Lanka’s retail prices have eased from last year’s peaks but still hovered at over 53% in February, data showed on Tuesday. Graphic: No respite from price rise – https://www.reuters.com/graphics/SRI%20LANKA-CRISIS/INFLATION/zdvxdqxxrvx/chart.png Sri Lanka aims to announce a debt-restructuring strategy in April and step up talks with commercial creditors ahead of the next IMF review in six months, its central bank governor told Reuters this month.”We need to keep in mind that it’s still going to be a difficult road no matter how much potential funds or support is being thrown at Sri Lanka,” Katrina Ell, senior economist at Moody’s (NYSE:MCO) Analytics, told Reuters.”Ultimately, it comes down to them being able to successfully address some of the systemic problems in terms of economic management, fiscal management.” More

WASHINGTON (Reuters) -TikTok CEO Shou Zi Chew said the Chinese-owned short video app company faces a pivotal moment as a growing number of U.S. lawmakers seek to ban the popular app over national security concerns.Chew said in a video posted on TikTok early Tuesday the app now has more than 150 million active monthly U.S. users. “That’s almost half the U.S. coming to TikTok,” Chew said. TikTok in 2020 said it had 100 million U.S. users.Chew, who will testify Thursday before the House Energy and Commerce Committee, said: “Some politicians have started talking about banning TikTok.””Now this could take TikTok away from all 150 million of you,” he said in the video that features the U.S. Capitol in the background.He asked TikTok users to leave comments about what they wanted U.S. lawmakers to know about “what you love about TikTok.”Chew also said 5 million U.S. businesses use TikTok to reach customers.TikTok’s critics fear its U.S. user data could be passed on to China’s government by the app, which is owned by the Chinese tech company ByteDance. TikTok rejects the spying allegations.TikTok also said Tuesday it had updated its community use guidelines and offered more details of its plans to secure the data of U.S. users. The company said it had started to delete this month U.S. user protected data in data centers in Virginia and Singapore after it started routing new U.S. data to the Oracle (NYSE:ORCL) Cloud last year.Last week, TikTok said the Biden administration demanded that TikTok’s Chinese owners divest their stake in the app or it could face a U.S. ban. TikTok, which has said it has spent more than $1.5 billion on rigorous data security efforts, said “if protecting national security is the objective, divestment doesn’t solve the problem: a change in ownership would not impose any new restrictions on data flows or access.”A growing number of U.S. lawmakers support a ban on TikTok. This includes Energy and Commerce Committee chair Cathy McMorris Rodgers, congressional aides told reporters on a call Monday. On Friday, six more U.S. senators backed bipartisan legislation to give Biden new powers to ban TikTok.On March 1, the U.S. House Foreign Affairs Committee voted along party lines to give President Joe Biden new powers to ban TikTok. More