The company is the latest hotel chain and Western company to scale back plans or halt business in Russia.”We continue to operate in some capacity as we play a key role in supporting employees and local communities,” the company said in a statement.Two agencies – the Ukrainian Hotel and Resort Association and the State Agency for Tourism Development of Ukraine – sent Radisson and six other global hotel chains an open letter on March 14 urging them to pause all operations in Russia as well as exit franchise and license agreements regardless of cost.All Radisson Hotel Group properties in Russia are owned by third parties, the company added.There are 38 Radisson Hotels in Russia listed on the company’s booking site. More
Fed’s Waller says series of half point rate increases may be needed at coming meetings – CNBC 2022-03-18 13:30:45 Reuters /news/economy/feds-waller-says-series-of-half-point-rate-increases-may-be-needed-at-coming-meetings–cnbc-2787472
Wall St set to dip as three-day rally cools 2022-03-18 13:20:56 Reuters /news/economy/futures-dip-as-threeday-rally-cools-2787404
Take Five: Talking and fighting 2022-03-18 13:16:02 Reuters /news/economy/take-five-talking-and-fighting-2787377
Putin gives cenbank rights to determine size of FX operations with non-residents 2022-03-18 13:15:39 Reuters /news/economy/putin-gives-cenbank-rights-to-determine-size-of-fx-operations-with-nonresidents-2787466
Fed’s Bullard, explaining dissent, says rates should top 3% this year 2022-03-18 12:06:22 Reuters /news/economy/feds-bullard-explaining-dissent-says-rates-should-top-3-this-year-2787410
Gold slips on stronger dollar, set for biggest weekly fall since Nov 2022-03-18 12:05:59 Reuters /news/economy/gold-slips-on-firmer-dollar-heads-for-worst-week-since-november-2787371
Russian central bank keeps key rate at 20%, flags economic contraction 2022-03-18 12:01:23 Reuters /news/economy/russian-cenbank-keeps-key-rate-at-20-flags-economic-contraction-2787382
Wary of Western sanctions, Turkey’s banks resist Russian customers -sources 2022-03-18 11:50:39 Reuters /news/economy/wary-of-western-sanctions-turkeys-banks-resist-russian-customers–sources-2787301
UK’s Sunak says his priority is to cut taxes 2022-03-18 11:41:22 Reuters /news/economy/uks-sunak-says-his-priority-is-to-cut-taxes-2787415
Rouble stabilises near 104 vs dollar as cenbank holds rates 2022-03-18 11:41:03 Reuters /new More
A top Federal Reserve official has called for the US central bank to raise its benchmark interest rate above 3 per cent this year, arguing that policymakers need to move quickly to combat inflation and avoid “losing credibility”. James Bullard, president of the St Louis branch was the lone dissenter at the Fed’s meeting this week, when the central bank raised rates for the first time since 2018 in what officials signalled would be the start of a series of increases at all of the remaining six meetings this year. At that pace, the fed funds rate would rise to 1.9 per cent.In a statement released on Friday, Bullard, a voting member of the policy-setting Federal Open Market Committee, said a half-point rate rise — a tool that has not been used since 2000 — would have been “more appropriate” than the Fed’s quarter-point increase, given the strength of the labour market and broader economy, as well as the “excessive” level of inflation. At 5.2 per cent, the Fed’s preferred core personal consumption expenditures index is well above the central bank’s 2 per cent target.“In my judgment, given this constellation of macroeconomic data, a 50-basis-point upward adjustment to the policy rate would have been a better decision for this meeting,” he said.Bullard noted that US monetary policy has been “unwittingly easing”, as rising price pressures have pushed short-term “real” or inflation-adjusted rates lower and kept them well into negative territory. At these levels, rates remain highly stimulative, spurring borrowing and the very demand the Fed is seeking to dampen.“The combination of strong real economic performance and unexpectedly high inflation means that the Committee’s policy rate is currently far too low to prudently manage the US macroeconomic situation,” he said. “The Committee will have to move quickly to address this situation or risk losing credibility on its inflation target.”A bulk of the 16 policymakers who pencilled in their forecasts on Wednesday did express support for more aggressive action, with seven projecting rates to rise above 2 per cent in 2022. That would require at least one half-point adjustment.Most officials saw rates rising to 2.8 per cent in 2023, slightly higher than the level a majority of policymakers believe will neither hasten nor hold up growth, known as the neutral rate, which they pegged at 2.4 per cent. Jay Powell, the Fed chair, kept the door open to half-point adjustments and lifting rates above neutral, in his bid to prove the committee is “acutely aware of the need to return the economy to price stability and determined to use our tools to do exactly that”. More
It is a hard time to be an oil refiner in China. As the cost of crude oil imports surges, Beijing caps domestic fuel prices. That means a squeeze on margins.Some help has arrived. From Friday, retail gasoline prices were raised by 750 yuan ($118) a tonne, the biggest hike since the pricing system was introduced nearly a decade ago. That puts pump charges back at 2006 levels.Tight restrictions are needed to control inflation. In Beijing, for example, retail gasoline reached a near-record high last week of around $1.40 per litre. Government policy typically delays price increases on retail gasoline and diesel when crude exceeds $80 a barrel. Beyond $130, retail fuel costs are effectively frozen.As Brent approached $140 last week, it had been largely left to refiners to absorb excess costs. Teapots, as smaller independent refiners are referred to locally, have boosted purchases of cheaper Iranian oil. These independents have also used special cash transfers to pay for Russia’s Eastern Siberia blends, in an attempt to salvage margins.Yet, as tanker rates, trucking costs and global oil benchmarks remain elevated, smaller refiners have had to cut back their operations. More than 40 teapots have been running at only around half capacity due to unsustainable margins.Refiners started the year on a shaky footing. The local giants — Sinopec, PetroChina, Cnooc and Sinochem — had reduced imports and decreased production capacity starting in December. Beijing had cracked down on excess domestic fuel production, partly to reduce energy consumption. Increasing crude prices over the past year had already caused problems. Local refining margins have contracted, while petrochemical unit earnings turned to a loss.The structural squeeze on local refiners is reflected in the shares of China’s largest, Sinopec. They have steadily declined for over four years. Accelerating inflation means Beijing has little leeway in allowing further fuel price hikes. Refiner profits look unlikely to benefit soon from the energy boom. More
For something so long discussed and anticipated, the Federal Reserve’s quarter-point rate rise, the first since 2018, caused remarkably little stir when it finally arrived on Wednesday. The central bank, long the most important player in financial markets, had to compete with Russia’s invasion of Ukraine and a new wave of coronavirus infections in China as a topic for discussion. The lack of reaction is testament to how Jay Powell, Fed chair, had prepared markets for the gradual tightening of monetary policy since the central bank changed its tone last September.Moderation in monetary tightening is justified, at least during wartime. There was no need to add another shock to markets that are following the conflict in Ukraine as well as the impact of locking down large parts of China which is already, on some measures, the world’s largest economy. Energy traders are already considering asking central bankers for emergency support as the disruption to their markets risks causing a liquidity crisis.There was a case for going further. The data has indicated for a while that inflationary pressure in the US is broadening from pandemic-related bottlenecks and surges in global energy prices to domestic services. Indeed, the Fed, in its messaging, struck a hawkish tone and members of its rate-setting committee indicated they expect six further rate rises this year. While there are disagreements about the speed and eventual endpoint of the tightening cycle there is consensus that the US no longer needs the stimulus launched at the start of the pandemic. There are risks on both sides to the Fed’s outlook — not least the progress of the war in Ukraine. Any ceasefire or even a lasting peace deal would be disinflationary — partly reversing the increase in oil prices since the invasion began — while escalations of the violence could exacerbate the stagflationary pressure in the world economy. China’s Covid lockdowns, too, could have unforeseen effects, reducing global demand for commodities but also aggravating the problems with supply chains that have driven up prices for some manufactured goods. The Fed’s recent forecasts are notable for the central bank’s apparent belief that it can painlessly reduce inflation. The central bank predicts that the unemployment rate will fall further to 3.5 per cent and then remain there, even as rates rise from the current 0.5 per cent to an expected 2.8 per cent by 2023. Powell has previously expressed admiration for his predecessor Paul Volcker’s choices in the late 1970s to raise rates aggressively even in the face of mass joblessness; the latest forecasts deny such trade-offs even exist. The Bank of England, which raised rates for the third consecutive time on Thursday, struck a far more cautious note. While at its previous meeting four members of the monetary policy committee dissented and argued for faster rate rises, at this one there was only one dissenter, who said the BoE should hold fast. The MPC argued that Russia’s invasion would, in the short term, increase the rate of inflation at its peak but over a longer period damp economic activity, bringing inflation down more swiftly than the committee had first anticipated. The outlook is murky but the Fed certainly appears too optimistic. It is not clear whether it is overconfident about its ability to control the inflationary pressure that has built up over the past year — pressure that it has consistently underestimated — or to limit the slowdown in the US economy and knock-on effects on unemployment from the oil shock. The rest of us can only hope whatever mistake they make it is not too large. More
The International Energy Agency has called for member countries to adopt “emergency measures” to cut oil demand in the wake of Russia’s invasion of Ukraine, including driving restrictions, lower speed limits and curbs on air travel.Fatih Birol, head of the energy watchdog, on Friday warned that such steps might be necessary because “oil markets are in an emergency situation . . . and it may get worse”. As much as 2.5mn barrels a day of Russian oil exports could cease from next month due to the impact of the war and consumer boycotts of Russian crude, he said. Russia is one of the world’s largest oil producers.The IEA has proposed 10 measures to reduce oil demand by 2.7m b/d within the next four months, which it said would help balance potential loss from the Russian market. “As a result of Russia’s appalling aggression against Ukraine, the world may well be facing its biggest oil supply shock in decades,” Birol said.He urged IEA member countries — which include many of the world’s largest energy consumers such as the US, Japan and Germany — to cut demand now, “to avoid the risk of a crippling oil crunch”.
A 10-point plan to cut oil useActionImpactReduce speed limits on highways by at least 10kphSaves about 290,000 barrels per day of oil use in cars and an additional 140,000 b/d from trucksWork from home up to three days a week where possibleOne day a week saves about 170,000 b/d, three days saves about 500,000 b/dCar-free Sundays in citiesEvery Sunday saves about 380,000 b/d, one Sunday a month saves 95,000 b/dMake the use of public transport cheaper and provide incentives for micromobility, walking and cyclingSaves about 330,000 b/dAlternate private car access to roads in large citiesSaves about 210,000 b/dIncrease car sharing and adopt practices to reduce fuel useSaves about 470,000 b/dPromote efficient driving for freight trucks and delivery of goodsSaves about 320,000 b/dUse high-speed and night trains instead of planes where possibleSaves about 40,000 b/dAvoid business air travel where alternative options existSaves about 260,000 b/dReinforce the adoption of electric and more efficient vehiclesSaves about 100,000 b/dSource: IEA
The measures include cutting speed limits on highways by 10kph, which would save 430,000 b/d, reducing business air travel and taking trains instead of planes where possible.Working from home three days a week would also help cut oil demand, along with making public transport cheaper or even free. Many of the proposals would cut down on driving, including banning private cars from cities on Sundays and limiting private car access to roads in large cities.The IEA was founded in the 1970s to help oil-consuming countries respond to the 1973 oil crisis and monitor global energy markets. But rarely has the body had to resort to the dramatic demand-reduction steps that it outlined on Friday.The price of Brent crude, the international benchmark, soared to $139 a barrel after Russia’s invasion of Ukraine amid supply concerns. On Friday it traded at $107 a barrel.Barbara Pompili, France’s ecological transition minister, said the IEA plan to cut consumption offered “interesting ideas” that could be a road map for countries to reduce their oil dependence. “France and all European countries must get out of their dependence on fossil fuels as soon as possible. It is an absolute necessity for the climate, and also for energy sovereignty,” she said. The IEA will present the recommendations to energy ministers next week as part of its response plan for the current energy crisis. Birol warned that the combination of loss of Russian exports, increased demand during the summer travel season and low storage levels meant the oil market could get even tighter than it was now. “The reason we came up with this report is that oil markets are in an emergency situation, and not only that, it may get worse,” he said. More
The writer is Iran’s minister of finance and economic affairsIn Iran, sanctions, currency fluctuations and high inflation rates have led to subpar economic performance and a negative growth rate in recent years. Other adverse shocks such as the Covid-19 pandemic and natural disasters have further increased the fiscal pressure. Hence, the budget has grown faster than inflation — that for 2021 was about three times that for 2019.I do not yet know what the outcome of Iran’s current nuclear negotiations with the 4 + 1 in Vienna will be. Regardless, we must take a cautious approach to our next budget so as not to upset the administration of the economy. Our government’s strategy was first to stabilise the economy and then to stimulate inclusive growth. In the past few months, part of the first goal was achieved, with point-to-point inflation decreasing on a monthly basis (from a 3.8 per cent increase to 1.6 per cent). The 2022 budget framework, which begins with the Iranian new year on March 21, must continue this strategy.Given the current sanctions-related obstacles to exporting crude oil, the previous government’s strategy in financing the growing budget deficit increased our reliance on the bond market. The repayment and settlement of these debts are the responsibility of the new administration. We have also tried, over our seven months in office, to sell more oil under the existing restrictions (with an increase of 40 per cent) and to raise tax revenues. The recent mushrooming of Iran’s budget was a direct result of an increase in the government’s current expenditure, while its investments in various sectors have declined. This, along with widespread uncertainty over the country’s economy because of the pandemic, has also led to a decline in private sector investment. This in turn has resulted in a negative net investment in recent years, severely undermining future production and household welfare.Against this background, and in response to growing inequality, the new government has sought to change the course of fiscal policy. Our aim is to promote economic growth, price stability and inclusive growth. We also seek institutional reforms to improve financial discipline and reduce spending. As such, our budget for 2022, which is already approved by the parliament, includes a number of structural reforms. We will lower corporate tax rates by 5 per cent and reduce our reliance on bonds. We hope to reduce the budget deficit by increasing the salaries of government employees at rates less than the inflation rate. We also predict increased oil export revenues.Iran’s new budget is designed to promote equitable growth, including by increasing government investment. The public sector must play a more active role in investing in physical capital. Capital asset acquisition declined from 24 per cent in 2012 to 14 per cent in 2021 but, in the new budget, the share of credits for acquiring capital assets has increased by 4 per cent. This is an essential step in strengthening public investment.We also wish to reduce the growth in current expenditure. In the 2021 budget this stood at around 60 per cent. This has been reduced to 38 per cent in the new bill.Finally, we plan to increase tax revenues. Despite the reduction in corporate tax rates, the government has increased its reliance on sustainable tax revenues instead of mainly depending on oil. This has come about through substantial reforms to the tax system as well as by increasing financial transparency to reduce tax evasion and introducing a capital gains tax.Our models suggest that Iran’s new budget will lead to positive medium-term outcomes in variables such as output, investment, employment and inflation. The approach adopted in the 2021 budget is expected to reduce inflation significantly in the next three years. Moreover, total investment and non-oil production will grow more quickly. Needless to say, the government is determined to keep the money supply and monetary base under tight control. This will require significant reforms in the banking sector, as well as in areas outside the government budget (such as pension funds, the national wealth fund and so on). The current negotiations in Vienna could potentially lead to positive economic outcomes for Iran, especially in the banking sector and foreign exchange. We are ready for whatever scenario emerges — pessimistic or otherwise. More
