Aurelia Butler

A deal allowing Ukraine to export grain to world markets by ship despite Russia’s blockade of the Black Sea has been extended, the UN and the Ukrainian and Turkish governments said on Saturday.The Black Sea grain initiative, agreed in July under the auspices of the UN and with Turkish mediation, has enabled Ukraine to ship 25mn tonnes of grain and edible oils, easing pressure on global food prices.Oleksandr Kubrakov, Ukraine’s deputy prime minister responsible for infrastructure, said in a tweet that the agreement had been extended for 120 days.However, Moscow indicated it had only agreed to a 60-day extension. Russian foreign ministry spokeswoman Maria Zakharova re-posted a letter it had sent to the UN earlier this week, saying it was only willing to extend beyond 60 days if there was “tangible progress” in unblocking flows of Russian food and fertiliser to world markets.The UN confirmed the deal had been rolled over but did not specify for how long, as did Turkish president Recep Tayyip Erdoğan.“The deal for the grain corridor was due to expire today,” Erdoğan said in a speech in the Turkish city of Çannakale, Reuters reported. “As a result of our talks with the two sides, we have secured an extension to this deal.”The original agreement struck last year specified that it would continue automatically for 120 days if no party objected. Ukraine, Turkey and the UN backed a full extension. Kyiv says a 60-day extension creates too much uncertainty for grain dealers and shippers.The deal was extended once in November. It allows exports of commercial food and fertiliser, including ammonia, from three Ukrainian ports in the Black Sea — Odesa, Chornomorsk and Yuzhny/Pivdennyi.The Kremlin had been pressing for the reopening of a pipeline to pump ammonia, a feedstock for fertiliser, from Tolyatti in central Russia to Odesa for export. It has also demanded an easing of what it claims are western restrictions on the export of Russian cereals, even though they are not covered by sanctions.The initiative has been a lifeline for Ukrainian farmers and grain traders because alternative export routes via rail and river barge have far less capacity and are much more expensive.Ships are escorted out of the authorised ports to avoid mines and then follow an agreed humanitarian corridor south towards Turkey.Ukrainian officials have complained that Moscow has been undermining the deal by ordering its officials to drag out inspections of Ukrainian ships as they leave the Black Sea for the Bosphorus. Russian inspectors were ordered to work shorter hours and take longer with each ship, delaying scores of ships for weeks, Kyiv claimed.“The Black Sea grain initiative, alongside the memorandum of understanding on promoting Russian food products and fertilisers to the world markets, are critical for global food security, especially for developing countries,” the UN said.“We remain strongly committed to both agreements and we urge all sides to redouble their efforts to implement them fully.” More

“Amidst a global crisis, today India’s economic system is strong, the banking system is strong. This is the power of our institutions,” Modi said at an India Today gathering.Bank stocks worldwide have been badly hit in recent days by the collapse of two mid-size U.S. banks. While authorities have rescued lenders on the edge, the turmoil has spurred worries about what may be lurking in the wider global financial system. More

(Reuters) – The European Central Bank (ECB) will likely need to raise interest rates further to tame persistent inflation, two leading hawks on the bank’s policymaking Governing Council said on Saturday, while playing down the risk of repeat of the 2008 financial crisis.The comments from the central bank chiefs of Austria and Belgium backed up remarks a day earlier from two fellow hawks – their Slovakian and Lithuanian peers – and pressed the case for higher rates to tame inflation running at 8.5% in the euro zone.The ECB raised interest rates as promised by 50 basis points on Thursday, sticking with its fight against inflation and facing down calls by some investors to hold back on policy tightening until turmoil in the banking sector eases.Robert Holzmann of Austria and Pierre Wunsch of Belgium said further action would likely be needed.”Inflation is proving much tougher than thought,” Holzmann told Austria’s ORF 1 radio. “I do expect some more interest rate hikes.” He added that the extent of further increases would be data-dependent.The ECB has hiked rates by 350 basis points since last July, lifting its benchmark refinancing rate to 3.5% on Thursday.”We know that we have to do more of this,” Wunsch told Belgian paper L’Echo. “At what measure? That’s not clear. It will be meeting by meeting.” Asked how high the benchmark rate could go, Holzmann replied: “Some of us are hoping it will stay below 4(%). I’m afraid it’s probably going to go above 4(%).”Wunsch said the ECB had a “long way to go” if its baseline inflation forecast materialised.The ECB on Thursday projected inflation would remain above its 2% target through 2025, based on forecasts it said had been formulated before a huge selloff in bank shares this week.The ECB also acknowledged on Thursday the outlook had become more uncertain after the collapse of two banks in the United States and more problems at Credit Suisse Group.NO CONTAGION RISKBanking stocks globally have been battered since Silicon Valley Bank collapsed and Credit Suisse was forced to tap $54 billion in central bank funding, raising questions about other weaknesses in the financial system.Asked if he saw the risk of another global financial crisis, like that of 2008, Holzmann replied: “No, because both – the Silicon Valley Bank problems and now Credit Suisse – are rather special problems.”Credit Suisse was dealing with “a longstanding restructuring problem”, he added.Wunsch said: “We don’t see a structural problem with European banks”, though he added it remained to be seen what impact the events in the U.S. banking sector and around Credit Suisse would have in coming days.”We do neither see a risk of contagion nor a risk of instability if we look at the figures from a rational perspective,” Wunsch added. Asked about the future of Credit Suisse, Wunsch said he only saw a “very low” likelihood that the bank might go bankrupt.”For one, according to the public figures its situation is not bad, in itself, and, secondly, the Swiss authorities would intervene if necessary as it is a bank of systemic importance,” he said. More

The European Central Bank raised rates by 50 basis points on Thursday, leaving the door open to future hikes as it forecast inflation to remain stubbornly above its 2% target through 2025. In an interview published on Saturday, Wunsch, a policy hawk, told Belgian paper L’Echo that the ECB still needed to raise rates and had a “long way to go” if its baseline inflation forecast materialised.The bank has lifted its deposit rate by 350 basis points to 3% since July, the fastest pace on record, and central bank chiefs in Austria, Lithuania and Slovakia have made the case for further hikes.”We know that we have to do more of this. At what measure? That’s not clear. It will meeting by meeting,” Wunsch said.Despite market uncertainty, a large majority of policymakers still backed higher rates at the latest meeting, he said, adding that a different decision might have contributed to creating uncertainty. “Firstly, inflation has remained too high, for too long. Secondly, we don’t see a structural problem with European banks,” he said, although it needed to be seen what impact the events in the U.S. banking sector and around Credit Suisse would have in coming days.Banking stocks globally have been battered since Silicon Valley Bank collapsed and Credit Suisse was forced to tap $54 billion in central bank funding, raising questions about other weaknesses in the financial system.”We don’t have any information indicating the European banks to be vulnerable,” Wunsch said. “If you look at the Belgian banks, they are more solid than the average of European banks. That’s why it is very hard to imagine a repeat of the financial crisis.”He underlined it was crucial to distinguish between Europe and the U.S., where a softer application of capitalisation rules had enabled some regional banks to run up higher interest rate risks than they would have been allowed to in Europe.”We do neither see a risk of contagion nor a risk of instability if we look at the figures from a rational perspective,” the central bank governor said. Asked about the future of Credit Suisse, Wunsch said he only saw a “very low” likelihood that the bank might go bankrupt.”For one, according to the public figures its situation is not bad, in itself, and, secondly, the Swiss authorities would intervene if necessary as it is a bank of systemic importance,” he said. More

“Inflation is proving much tougher than thought,” Holzmann, a member of the ECB’s policymaking Governing Council, told ORF 1 radio. “I do expect some more interest rate hikes,” he said, adding that the extent of further increases would be data-dependent.Asked how high interest rates could go, after the ECB raised its benchmark refinancing rate to 3.50% on Thursday, he said: “Some of us are hoping it will stay below 4(%). I’m afraid it’s probably going to go above 4(%).”The ECB raised interest rates as promised by 50 basis points on Thursday, sticking with its fight against inflation and facing down calls by some investors to hold back on policy tightening until turmoil in the banking sector eases.Asked if he saw the risk of another global financial crisis, like that of 2008, Holzmann replied: “No, because both — the Silicon Valley Bank problems and now Credit Suisse — are rather special problems.”Credit Suisse was dealing with “a longstanding restructuring problem”, he added.Turning to the issue of Raiffeisen Bank International’s Russia business, Holzmann said: “I see a lot of challenges but it is quite possible that a solution can be found.” He did not specify what a solution could look like.Raiffeisen is deeply embedded in the Russian financial system and is one of only two foreign banks on the Russian central bank’s list of 13 “systemically important credit institutions”, underscoring its importance to Russia’s economy, which is grappling with sweeping Western sanctions.Raiffeisen shares fell sharply last month after the company received a request for information from the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) to “clarify payments business and related processes maintained by RBI in light of the recent developments related to Russia and Ukraine”.Austria’s finance ministry earlier this month played down concerns about the U.S. sanctions officials scrutinising Raiffeisen. More