International
Brazil hikes interest rate as inflation surges
AFP
Brazil’s central bank on Wednesday hiked its benchmark interest rate by a whopping 150 basis points for the second straight time, seeking to fight surging inflation even as Latin America’s biggest economy is stuck in recession.
The increase, the seventh straight, was in line with analysts’ expectations. It brought the Selic rate to 9.25 percent, the highest since mid-2017.
The decision was made unanimously by the nine members of the bank’s monetary policy committee, which said in a statement it expected “another adjustment of the same magnitude” when it ends its next meeting, on February 2.
“It is appropriate for the monetary tightening cycle to advance significantly into the territory of a contraction,” it said.
“The committee will persevere in its strategy until not only the process of disinflation but the anchoring of (inflation) expectations in line with its targets are consolidated.”
Policymakers are navigating treacherous waters as they try to right Brazil’s listing pandemic recovery.
The South American giant’s economy is in recession, having contracted by 0.4 percent in the second quarter of 2021 and 0.1 percent in the third.
Despite the slump, the central bank has hawkishly slammed on the monetary policy brakes because of surging inflation, fueled by both global price pressures and Brazil’s own domestic problems.
The annual inflation rate came in at 10.67 percent in October, nearly triple the bank’s target of 3.75 percent.
– Spending amendment –
Rapidly rising prices have been driven by a series of factors: internationally, those include global supply chain shortages, increasing oil prices and pandemic uncertainty.
At home, Brazil faces electricity rate hikes caused by droughts that sapped crucial hydroelectric dams, a weak currency and uncertainty around President Jair Bolsonaro’s bid to amend the constitution to free up money in the government’s tight budget for massive social spending.
Critics accuse the far-right president of embracing economic populism with the new spending measures.
But he won a victory Wednesday when Congress adopted a first portion of the spending amendment, enabling the government to postpone court-ordered debt payments.
That will free up 62 billion reais ($11 billion) to spend in 2022, with most expected to go to welfare payments.
The economy has turned into a major headache for Bolsonaro heading into elections next October that polls currently place him on track to lose to leftist ex-president Luiz Inacio Lula da Silva.
Double-digit inflation has left many Brazilian families struggling to make ends meet, weighing down Bolsonaro’s already sagging popularity — and driving his bid for new social spending, political analysts say.
Brazil’s unemployment rate has meanwhile been stubbornly high, at 12.6 percent for the third quarter.
International
Ukraine declares nationwide energy emergency amid russian attacks and extreme cold
The Ukrainian government on Wednesday declared a nationwide energy state of emergency amid continued Russian military attacks and extreme winter weather, with nighttime temperatures dropping as low as minus 18 degrees Celsius.
“The consequences of Russian attacks and worsening weather conditions are severe (…) Overall, a state of emergency will be declared for Ukraine’s energy sector,” Ukrainian President Volodymyr Zelensky said in a statement posted on social media following a meeting with senior officials.
Zelensky announced the creation of a “permanent coordination headquarters” to manage the crisis in the capital, Kyiv, and tasked former defence minister and current energy chief Denys Shmyhal with overseeing support efforts for affected individuals and communities, including addressing power outages, heating shortages and other “practical issues.”
“There are many problems that require urgent solutions,” the president said, noting that repair crews, energy companies, municipal services and the State Emergency Service are working “around the clock” to restore electricity supplies. Kyiv has been particularly affected after Russian strikes last Friday disabled key parts of the power grid, as daytime temperatures hover around minus 12 degrees Celsius and plunge to minus 18 at night.
Zelensky added that public authorities will “maximize efforts with partners to obtain the necessary equipment and additional support,” while the government will ensure “maximum deregulation of all processes” to speed up the connection of backup power equipment to the grid. He also confirmed that work is underway to significantly increase electricity imports into Ukraine.
The Ukrainian leader further instructed his Cabinet to review curfew regulations in light of the extreme cold, arguing that citizens must have the greatest possible access to assistance centers, while businesses should be given flexibility to plan their operations according to the state of the energy system.
International
France joins Denmark’s ‘Operation Arctic Resistance’ in Greenland amid U.S. tensions
French President Emmanuel Macron confirmed in the early hours of Thursday (Wednesday afternoon in El Salvador) that France will take part in “Operation Arctic Resistance,” after Denmark announced it would expand its military presence in Greenland amid rising tensions with the United States over Washington’s stated ambitions regarding the semi-autonomous territory.
“At Denmark’s request, I have decided that France will participate in the joint exercises organized by Denmark in Greenland, ‘Operation Arctic Resistance,’” Macron said in a brief message posted on social media at 5:18 p.m.
The French president added that “the first French military elements are already on their way, with others to follow,” though he did not specify the number of troops being deployed or the scale of France’s planned contribution.
The governments of Sweden, Norway and Germany have also confirmed the deployment of military contingents to Greenland. Germany’s armed forces will send a 13-member reconnaissance team to the Greenlandic capital, Nuuk, to take part in a mission scheduled to run from Thursday through Saturday, according to the German Ministry of Defence.
Denmark’s announcement came shortly before a Danish delegation met at the White House with U.S. Vice President JD Vance and Secretary of State Marco Rubio to discuss Washington’s plans regarding Greenland. Copenhagen said the military activities would be carried out “in close cooperation with NATO allies.”
International
Iran closes airspace amid U.S. threats and deadly nationwide protests
Iranian authorities closed the country’s airspace in the early hours of Thursday, according to data from flight-tracking website FlightRadar24, amid growing threats of a possible U.S. attack as protests across the country continue and have reportedly left thousands dead.
According to FlightRadar24, the Iranian government suspended all flights to and from the country, except for international flights that have received special authorization. The notice was initially issued for a duration of just over two hours.
The move comes after U.S. President Donald Trump in recent days threatened to strike Iran if its security forces failed to halt the deaths linked to weeks-long protests that began in Tehran and later spread to other Iranian cities. Despite the threats, the White House said diplomacy remains Trump’s preferred option.
Speaking from the Oval Office on Wednesday, Trump claimed that “the deaths in Iran have stopped” and said there would be no executions of protesters following his warnings to Tehran. He added that his administration would seek to verify those claims.
“I’ve been told the deaths in Iran are stopping. They’ve stopped, and that there are no plans for executions,” Trump told reporters, cautioning that the United States would be “very upset” if those assurances proved to be untrue.
The statements contrast with reports from rights groups. The Norway-based NGO Iran Human Rights (IHRNGO) said on Wednesday that more than 3,400 people have been killed since the protests erupted. Meanwhile, Kurdish-Iranian rights group Hengaw reported this week that a 26-year-old Iranian man, Erfan Soltani, was facing execution as of Wednesday.
Ukraine declares nationwide energy emergency amid russian attacks and extreme cold
France joins Denmark’s ‘Operation Arctic Resistance’ in Greenland amid U.S. tensions
Iran closes airspace amid U.S. threats and deadly nationwide protests
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