Aurelia Butler

Ukraine’s allies are pushing the IMF to finalise plans for a multibillion-dollar lending programme as they seek to strengthen the war-torn country’s finances. The fund’s representatives are planning to meet Ukrainian officials in Warsaw in mid-February to advance discussions over a loan that could range from $14bn-$16bn, said officials familiar with the talks. The goal is to finalise it by the spring. Ukraine has said it is facing a $38bn deficit this year, while the World Bank has estimated that more than half of its energy infrastructure has been destroyed by Russian attacks, compounding the pressure on its economy.To cover the financing gap, the EU has put forward €18bn in a package agreed between its member states in December. But the bloc and other major partners of Kyiv want international lenders to accelerate their efforts to provide further support.“The expectation is that other international donors including other G7 and international financial institutions would cover the rest of the financing need,” said Valdis Dombrovskis, European Commission executive vice-president, during meetings in Kyiv.He told the FT that an IMF programme for Ukraine would carry “a certain signalling effect” that “can trigger also further donor support”. The sooner the loan arrived the better, he added. “These are not circumstances in which the IMF would normally lend, so it is a positive step that they are actually working on a proper disbursing programme.” The US has also been pushing the IMF to deliver new financial aid quickly to Ukraine. “Treasury is encouraging the IMF and Ukraine to work together expeditiously toward agreeing on a programme,” the US Treasury said on Thursday. Securing approval for a multiyear aid package has been a prolonged process, given vast uncertainty about the financial situation in a war-torn country like Ukraine as well as its capacity to pay back what the IMF would lend out.Kyiv has been pushing for funding from the IMF since September but talks have been held up by the conditions the fund would require to lend, as its rules do not allow financing to war zones. The fund is considering a three to four-year package of aid worth $14bn-$16bn, said people familiar with the discussions.The fund previously granted $2.7bn of emergency funding and in December approved a four-month programme for Ukraine aimed at both shoring up the economy and preparing it for a significant IMF loan.“We have been supporting Ukraine since the onset of the war and are committed to keep it going,” an IMF spokesperson told the FT. “We’re engaging closely with the Ukrainian authorities and hopefully move towards a fully-fledged programme as soon as feasible.” Ukraine’s finance ministry declined to comment. Advancing official loans to Ukraine is a complex process given the difficulties the country will have paying them back. The European Investment Bank on Thursday said it can only continue financing “risky” projects there if EU countries provide further guarantees.Werner Hoyer, president of the EU’s lending arm, said: “If you want us to do more we need support because what we are doing in Ukraine is bloody risky.”Since March last year, the EIB has distributed €1.7bn in funding to projects to help rebuild roads, trams and schools in Ukraine, with another €535mn due to be disbursed in 2023. Talks on guarantees to underpin loans have resumed in recent weeks and Hoyer said he was “very confident” that member states would provide support. The discussions come as the EU prepares to start tense negotiations over its long-term budget later this year. The European Bank for Reconstruction and Development has committed to a total of €3bn worth of loans and guarantees for Ukraine in 2022 through 2023, while the World Bank said it has disbursed $16bn in aid to date. More

BENGALURU (Reuters) – Indonesia’s economic growth likely slowed in the fourth quarter as declining commodity and energy prices hit exports, and a widely expected global recession could accelerate the slowdown this year, a Reuters poll found.Southeast Asia’s largest economy exported a record $292 billion in 2022, driven by high global commodity prices that boosted the value of the rupiah and improved the country’s current account.But export growth slowed in the latter part of the year as prices moderated.After reporting its strongest annual growth in more than a year in the third quarter, the resource-rich economy expanded a weaker 4.84% in October-December compared with the same three-month period a year earlier, according to the median forecast of 21 economists in the poll. If realised, it would be the slowest growth rate in over a year.Forecasts for gross domestic product (GDP) growth, due to be released on Feb. 6, ranged from 4.00% to 6.20%.On a quarterly basis, growth was expected to have eased to 0.33%, down from 1.81% in the third quarter. That was based on a smaller sample of forecasts.”Indonesia’s economic growth is going to slow in line with the ongoing global slowdown. The ongoing global recession has dampened prices and demand for commodities,” Suryaputra Wijaksana, an economist at Bank Central Asia, said.”Global decoupling also … disrupted demand for Indonesia’s exports. It contributed to slowing growth by reducing investment and domestic consumption as commodity-related sectors impacted negatively.”Economists in the poll expected a bleaker outlook as tightening monetary policy and elevated inflation globally risk derailing the world economy.Growth was forecast to have averaged 5.3% last year, but a separate Reuters poll said that rate would slow to 4.8% this year, still well within the range of Bank Indonesia’s projection of 4.50% to 5.30%.”With commodity prices set to drop back, weaker global demand likely to weigh on exports, and tighter monetary policy dragging on the domestic economy, we think the risks are firmly to the downside,” Gareth Leather, senior Asia economist at Capital Economics, said.But some economists were hopeful China’s reopening would boost the country’s exports of resources such as palm oil, coal, nickel and iron.”We are quite optimistic about 2023 growth, having robust domestic consumption recovery, and the potential of China’s full reopening this year,” Irman Faiz, an economist at Bank Danamon, wrote. More

(Reuters) -Alphabet Inc on Thursday posted fourth-quarter profit and sales short of Wall Street expectations as Google’s advertising clients pulled back spending from a period of pandemic-led excess.Executives of the search and advertising giant adopted a subdued tone on a call with investors, promising an extended period of belt-tightening, particularly on hiring, real estate costs and experimental projects that can take years to reach fruition. Shares of Alphabet (NASDAQ:GOOGL) were down nearly 5% in after-hours trading, after losing about 40% of their value in 2022. “We are committed to investing responsibly with great discipline and defining areas where we can operate more cost- effectively,” Chief Executive Sundar Pichai told analysts on a call to discuss the company’s results. That echoed comments from Meta Platforms Inc (NASDAQ:META) boss Mark Zuckerberg the previous day on cost efficiencies. Shares of other tech companies Apple Inc (NASDAQ:AAPL) and Amazon.com Inc (NASDAQ:AMZN) also fell after they posted disappointing results on Thursday, wiping off gains after Facebook parent Meta on Wednesday boosted tech shares with news on cost cuts and a large buyback.Gone was some of the exuberance of the pandemic when consumers flocked to the internet amid lockdowns and heightened interest in e-commerce and touchless deliveries. Alphabet’s chief financial officer, Ruth Porat, promised a more measured approach for 2023 and a focus on “delivering sustainable financial value,” not necessarily a hallmark of Silicon Valley firms. “We’re focused on revenue upside as well as durable changes to the expense base.” Advertisers, who contribute the bulk of Alphabet’s sales, have cut their budgets as rising inflation and interest rates fueled concern over consumer spending. Pichai pointed to advertisers’ more modest spending and the impact of foreign exchange rates abroad as drags on Alphabet’s overall results. He said artificial intelligence (AI) software will be an important focus for the company and that it plans to make its LaMDA chatbot software publicly available in the coming weeks.LID ON COSTSMountain View, California-based Alphabet decided to cut 12,000 jobs last month, representing about 6% of its overall workforce, and said it was doubling down on AI. Across the company, Alphabet will “meaningfully” slow its pace of hiring this year, said Porat.Alphabet, long a leader in AI, is facing competition from Microsoft Corp (NASDAQ:MSFT), which is reportedly looking to boost its stake in ChatGPT – a promising chatbot that answers queries with human-like responses.”Despite being seen as one of the most insulated companies in the advertising space relative to peers, Alphabet’s poor quarter is the latest sign that worsening fundamentals and a tough macroeconomic environment are prompting advertisers to cut back on spending,” said Jesse Cohen, senior analyst at Investing.com. Net income fell to $13.62 billion, or $1.05 per share, from $20.64 billion, or $1.53 per share, a year earlier. That was the sharpest decline for Alphabet in four quarters.Adjusted profit of $1.05 per share fell short of an expected $1.18 per share, according to Refinitiv.Revenue from Google advertising, which includes Search and YouTube, fell 3.6% to $59.04 billion. Total revenue rose 1% to $76.05 billion, its slowest growth ever barring a small decline in the second quarter of 2020. Analysts were expecting $76.53 billion.Google is the world’s largest digital ad platform by market share, making it uniquely susceptible to fluctuations in online marketing spending. Its YouTube division has faced a surge in rival platforms, particularly TikTok, whose endless scroll of short video is drawing younger users away.Alphabet’s Porat said the company’s total capital expenses this year will be in line with last year. As more of its employees work remotely and it consolidates staff, Alphabet expects to pare back its real estate expenses, which Porat said would result in a charge of roughly a half-billion dollars in this year’s first three months.Revenue from YouTube ads, one of Alphabet’s most consistent money-makers, fell nearly 8% to $7.96 billion, well below the estimate of $8.25 billion, according to FactSet.Cloud was a bright spot, however, with revenue growing 32% to $7.32 billion, but at its slowest pace since the company began disclosing the segment’s revenue numbers.But there may be more pain ahead for Alphabet. Late last month, the Justice Department and eight states sued Google over what they said were anticompetitive practices in its digital ad sales. The company is facing multiple lawsuits, which, if successful, could cause it to be broken up. More

SINGAPORE (Reuters) – The euro and sterling slipped against the dollar on Friday as markets took a dovish cue from policymakers at the European Central Bank and the Bank of England, who said inflationary pressures in their economies have become more manageable.Elsewhere, the greenback broadly advanced on the back of its Atlantic counterparts’ decline, reversing its losses earlier in the week.The pound slid 0.15% to a more than two-week low of $1.2206 in early Asia trade, after falling 1.2% in the previous session, its largest daily decline in a month.The euro was last 0.16% lower at $1.0893, after tumbling 0.7% on Thursday to move further away from its 10-month peak of $1.1034.On Thursday, the ECB and BoE each raised interest rates by 50 basis points as expected, with the latter signalling the tide was turning in its battle against high inflation.While the ECB explicitly alluded to at least one more hike of the same magnitude next month and reaffirmed its commitment in battling high inflation, President Christine Lagarde acknowledged the euro zone outlook had become less worrisome for growth and inflation.”The ECB was a little bit more dovish than markets had previously expected … (while) the Bank of England has given a small hint that they might be close to finishing their tightening cycle,” said Carol Kong, a currency strategist at Commonwealth Bank of Australia (OTC:CMWAY) (CBA).Remarks from the ECB and the BoE came a day after Federal Reserve Chair Jerome Powell similarly said in a news conference following the Fed’s 25bp rate hike that the “disinflationary” process in the United States appeared to be underway.The dollar on Friday recovered from a heavy selloff in the aftermath of Powell’s speech, and against a basket of currencies, the U.S. dollar index rose 0.03% to 101.82, away from Wednesday’s nine-month low of 100.80.Friday’s nonfarm payrolls report will be the next major test of the Fed’s fight against inflation. Signs are still pointing to a tight labour market, with the number of Americans filing new claims for unemployment benefits dropping to a nine-month low last week.In other currencies, the Aussie fell 0.11% to $0.7068, having lost 0.86% on Thursday, while the kiwi was little changed at $0.6475.The comments from policymakers following a slew of central bank meetings this week have markets seizing on signs that interest rates could be close to peaking in most major economies.”We’re starting to see central banks converging to a pattern now … the major central banks are definitely approaching the end of their tightening cycles,” said CBA’s Kong.An imminent peak in U.S. rates has provided some relief for the Japanese yen, which last year crumbled under pressure from rising interest rate differentials against Japan’s low interest rate environment.The yen was last marginally higher at 128.66 per dollar and was headed for a weekly gain of nearly 1%, reversing two straight weeks of decline. More

BRASILIA (Reuters) -Brazilian President Luiz Inacio Lula da Silva on Thursday issued his latest threat to the autonomy of the country’s central bank a day after it floated the possibility of keeping interest rates at a six-year high for a longer-than-expected period.Lula, who had previously described central bank independence as “nonsense,” said he could review its autonomy by the end of the term of the current central bank governor, Roberto Campos Neto.Selected by right-wing former President Jair Bolsonaro, Campos Neto had his mandate extended to the end of 2024 under a new law established in 2021 granting the central bank formal autonomy.The central bank’s policy statement issued late on Wednesday specifically said it could keep its benchmark Selic rate at its current 13.75% for longer than markets expected due to fiscal risks under Lula.”So I want to know what independence was for,” Lula said during an interview with local channel Rede Tv. “I’m going to wait for this citizen to finish his mandate so that we can make an assessment of what the independent central bank meant.” “What is on the agenda is the interest rate issue,” he added, suggesting that the central bank should seek a “Brazilian standard” for inflation rather than a European one.The comments were in line with previous comments by Lula suggesting that the current inflation target hinders economic growth.Campos Neto has insisted that the central bank plans to act independently, adding that its formal autonomy gives it the capacity to stabilize markets. More