2025-02-20 16:09

MEXICO CITY, Feb 20 (Reuters) - The Bank of Mexico said on Thursday that it might continue cutting the benchmark interest rate at future monetary policy meetings and could "consider adjusting it in similar magnitudes" to the latest 50 basis point reduction. Banxico, as the Mexican central bank is known, lowered its key rate by half a percentage point to 9.50% in a decision announced on February 6, as inflation cools and after the economy contracted slightly late last year. One of Banxico's five board members said that considering the progress made on disinflation "a similar reference rate cut could be considered at the next monetary policy meeting," according to minutes of the February policy meeting. Banxico will announce its next monetary policy decision on March 27. The February rate cut was double the 25-basis-point reductions Banxico had implemented since it began lowering borrowing costs from a record high of 11.25% in March 2024. The minutes also highlighted concerns about the economy. Banxico noted that Mexico's economy weakened in the fourth quarter of 2024, with most board members observing a contraction in GDP compared to the prior quarter. The central bank pointed to ongoing global uncertainty, particularly the potential impact of policy changes from the new U.S. administration. This has contributed to weaker-than-expected growth projections, which could continue to put downward pressure on inflation. Banxico emphasized the need to stay focused on measures that support inflation convergence, with some members cautioning that uncertainty surrounding trade policies could cloud judgment and lead to hasty decisions. Sign up here. https://www.reuters.com/world/americas/bank-mexico-says-it-might-cut-interest-rate-by-50-basis-points-again-2025-02-20/

2025-02-20 16:08

SAO PAULO, Feb 20 (Reuters) - Brazilian President Luiz Inacio Lula da Silva said on Thursday that tariffs implemented by U.S. President Donald Trump should cause higher inflation, criticizing the Republican's trade policies as "not the right thing to do". Lula, in a radio interview, repeated that there would be reciprocity if Trump issues tariffs on Latin America's largest economy. "That could push inflation up in the entire world," the leftist leader said. Sign up here. https://www.reuters.com/world/americas/brazils-lula-warns-inflation-risks-trump-tariffs-2025-02-20/

2025-02-20 16:05

EU's Sefcovic met with US counterparts for four hours Cites huge impact of trade tensions for global economy US, EU priority will be to focus on automotive sector WASHINGTON, Feb 20 (Reuters) - European Union trade chief Maros Sefcovic said on Thursday that his top priority in trade talks with President Donald Trump's administration is to avoid a period of economic pain for both sides from unilateral U.S. tariffs and EU countermeasures. Sefcovic, speaking to reporters after a four-hour meeting in Washington on Wednesday with Trump's top trade officials, said Europe was interested in buying more U.S. liquefied natural gas (LNG) and he saw some willingness on the part of the U.S. to mutually reduce tariffs. "Our number one priority is (to) avoid this period of pain, you know? Because usually what happens, we have measures, we have counter measures and then usually, very often, the same people have to sit at the same table and resolve the problem," Sefcovic said. Sefcovic said he discussed his goals with newly confirmed U.S. Commerce Secretary Howard Lutnick, top White House economic adviser Kevin Hassett and U.S. Trade Representative nominee Jamieson Greer as the EU works to avert tariffs promised by Trump. The 27-member EU could be hit especially hard by Trump's reciprocal tariff plan announced last week to raise U.S. import tariff rates to match those charged by other countries. The EU has a 10% tariff on passenger cars, four times the rate of the U.S. passenger car tariff of 2.5% and U.S. officials have complained about European value added taxes of at least 17.5%. Sefcovic, citing the potential global spillover effects of tensions between the U.S. and the EU, said it was incumbent on the two sides to reach a positive solution. He said while U.S. officials focused on the goods trade, where the U.S. has a deficit, U.S. firms had a "quite significant surplus" in the services sector, driven largely by U.S. technology companies. Balancing the two left a deficit of about 50 billion euros ($52.35 billion), which amounted to only 3% of the overall trade level, he said. "So, it's not something which we cannot overcome," he added. Sefcovic said the EU remained interested in increasing its purchases of U.S. LNG given that Europe was phasing out use of Russian supplies, but gave no details. "I think if we have to resolve 50 billion (euros), we can really do it ... and relatively quickly," he said. "We just need to continue to talk, to use the momentum which I hope we generated yesterday, and to focus on the positive agenda, and not on measures and countermeasures." Sefcovic said he told the U.S. officials that overall U.S. tariffs on the EU amounted to around 1.4%, while overall EU tariffs on U.S. goods were lower at 0.9%, and that 70% of the goods arriving in Europe were tariff-free. "They're very open to discuss everything which concerns lowering the tariffs," he said, adding that a big priority was the automotive sector and how to lower and eventually eliminate tariffs, as well as mutual recognition of standards. The EU remains irritated by a much higher 25% U.S. tariff on pickup trucks. The duty, which stems from a 1960s U.S.-European trade dispute, keeps non-North American imports out of one of the most lucrative segments of the U.S. vehicle market. ($1 = 0.9552 euros) Sign up here. https://www.reuters.com/world/eu-trade-chief-sees-us-willingness-reduce-tariffs-wants-avoid-pain-2025-02-20/

2025-02-20 15:25

JOHANNESBURG, Feb 20 (Reuters) - South Africa's rand strengthened against a weaker dollar on Thursday, as investors digested U.S. data and President Donald Trump's tariff plans. At 1509 GMT, the rand traded at 18.3975 against the dollar , about 0.7% firmer than its previous close. The dollar index was last trading down about 0.4% against a basket of currencies after data showed U.S. weekly jobless claims rose slightly. Trump said on Wednesday that he would announce fresh tariffs over the next month or sooner, adding lumber and forest products to previously announced plans. The local currency slipped on Wednesday after a last-minute postponement of the national budget due to disagreements within the country's coalition government over a proposal to hike value-added tax (VAT). President Cyril Ramaphosa said the cabinet would work together to deliver a new budget, which is now scheduled for March 12. Foreign ministers from the G20 top economies met in South Africa on Thursday, amid tensions between members over the Ukraine war, trade disputes and with the top U.S. diplomat staying away owing to a feud with the hosts. G20 finance ministers and central bank governors are due to meet next week in Cape Town. On the stock market, the Top-40 (.JTOPI) , opens new tab index closed about 0.7% higher. South Africa's benchmark 2030 government bond was slightly weaker, with the yield up 1.5 basis points to 9.195%. Sign up here. https://www.reuters.com/markets/currencies/south-african-rand-partially-recoups-losses-with-focus-g20-meeting-2025-02-20/

2025-02-20 14:56

First hold after six hikes last year Central bank notes stability in FX market Encouraged by rebased CPI but wants more data ABUJA, Feb 20 (Reuters) - Nigeria's central bank left its benchmark interest rate unchanged on Thursday after six hikes last year, saying that it was reassured by stability in the foreign exchange market and saw inflation gradually falling. Economists polled by Reuters had been split on what the Central Bank of Nigeria would do, partly because of a rebasing exercise by the statistics agency which resulted in a sharply lower inflation reading in January of 24.48% year on year. The bank's Monetary Policy Rate remained at 27.50% (NGCBIR=ECI) , opens new tab, after 875 basis points of rate hikes in 2024 as the bank stepped up its fight against inflation. Central bank Governor Olayemi Cardoso told a press conference that the Monetary Policy Committee was satisfied by recent macro-economic developments and they were expected to help price dynamics. "Inflation is trending down, and it's looking positive," Cardoso told reporters in the capital Abuja, adding that the aim was to bring inflation down to single digits. He said the central bank would analyse more rebased inflation releases to firm up its view on the inflation outlook. Among potential inflationary risks he cited food prices. "We can see that confidence is gradually returning to our markets, which shows that we are on the right course now. Obviously, as that happens, we are in a better position to begin the process of moderating rates because stability is very, very important," Cardoso said. Inflation hit repeated 28-year highs last year (NGCPIY=ECI) , opens new tab, spurred by President Bola Tinubu's moves to end subsidies and devalue the naira currency after he came to power in 2023. Tinubu's reforms were aimed at boosting economic growth and shoring up public finances, though the growth rate has remained well below a 6% target. As well as rebasing its consumer price index, the statistics agency is also expected to release rebased gross domestic product data soon. The last time Nigeria rebased its GDP data in 2014 it made the economy Africa's biggest, leapfrogging South Africa, though it has recently fallen behind South Africa again because of the fall in the naira under Tinubu's leadership. Sign up here. https://www.reuters.com/world/africa/nigerias-central-bank-keeps-main-interest-rate-unchanged-2025-02-20/

2025-02-20 14:10

MADRID, Feb 20 (Reuters) - The chief executive of Spanish oil company Repsol (REP.MC) , opens new tab said on Thursday he expected U.S. President Donald Trump's energy policies would have a positive impact on the gas industry including increased output and lower prices. "The new licenses to export LNG are going to increase demand," Josu Jon Imaz, whose company produces gas in the United States, said in a call with investors. The increased supply will help bring gas prices down globally thus bolstering European heavy industry which relies on gas for energy, he said. Trump ordered a lifting of the freeze on LNG export approvals the day he came into office for a second time on January 20 and the U.S. Energy Department started granting new licenses last week. Former President Joe Biden had paused the issue of new licenses early last year. Imaz said cheaper gas would also lead to lower carbon emissions as it would help countries in the Global South to switch from coal to gas-fired power plants. The U.S. is trying to increase its LNG exports to help reduce Europe's dependency on Russian gas after Moscow's invasion of Ukraine three years ago. Sign up here. https://www.reuters.com/business/energy/repsol-says-trumps-gas-policies-will-help-lower-prices-2025-02-20/