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.

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“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.

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– 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.

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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

Iran Reports 201 Dead, 747 Injured After U.S. and Israeli Strikes

The Iranian Red Crescent Society reported Sunday night (local time) that at least 201 people were killed and 747 injured following attacks carried out by Israel and the United States against the Islamic Republic.

A spokesperson for the humanitarian organization said more than 220 rescue teams have been deployed across affected areas and that relief operations are continuing without interruption. The official highlighted the difficulty of treating the large number of wounded and the urgent need for additional resources in impacted provinces.

Out of Iran’s 31 provinces, 24 have reported damage, according to a statement carried by the Isna news agency. This marks the first overall casualty toll released by Iranian state-affiliated media since the launch of the offensive.

Among the dead are 85 schoolgirls from a school in the southern city of Minab, according to the country’s judiciary. “The number of martyrs at the Minab girls’ school has risen to 85,” the local prosecutor’s office said, as quoted by the judiciary’s website, Mizan Online.

Iranian President Masud Pezeshkian described the attack as a “savagery” that “constitutes a new black page in the record of countless crimes committed by the aggressors.”

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Meanwhile, the international community continues to monitor the situation closely amid concerns about possible further reprisals and the broader impact on Middle East stability, energy markets, and global security.

AFP noted that it was unable to independently verify the casualty figures or the circumstances surrounding the events.

International

Pope Leo XIV Urges End to ‘Spiral of Violence’ in Middle East

Pope Leo XIV on Sunday called for an end to the “spiral of violence” in the Middle East, following military strikes by the United States and Israel against Iran and subsequent retaliatory bombardments in the region.

“Faced with the possibility of a tragedy of enormous proportions, I urge the parties involved to assume their moral responsibility and stop the spiral of violence before it becomes an irreparable abyss,” the pontiff told the crowd gathered in St. Peter’s Square at the Vatican.

Speaking during the Angelus prayer, the U.S.-born pope said stability and peace cannot be achieved through threats or weapons. “Stability and peace are not built with reciprocal threats or with arms that sow destruction, suffering and death, but only through reasonable, sincere and responsible dialogue,” he declared.

The leader of the world’s 1.4 billion Catholics also called for diplomacy to “regain its role” amid escalating tensions.

In addition, the pope urged Afghanistan and Pakistan to urgently resume dialogue after several days of clashes between the two countries.

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International

Security Council to Hold Emergency Meeting on Middle East Crisis

UN Secretary-General António Guterres on Saturday condemned the “military escalation in the Middle East” following attacks by the United States and Israel against Iran and Tehran’s retaliatory strikes, just hours before an urgent meeting of the UN Security Council.

“I call for the immediate cessation of hostilities and de-escalation,” Guterres said in a statement.

The Security Council is scheduled to meet on Saturday at 21:00 GMT (4:00 p.m. in New York) to address “the situation in the Middle East,” the United Nations announced.

The meeting, during which Guterres will deliver remarks, was convened at the request of France, Bahrain, Colombia, Russia and China, according to a diplomatic source.