2025-01-28 11:00

Jan 28 (Reuters) - Newly inaugurated U.S. President Donald Trump is pushing to "take back" the Panama Canal, the world's second busiest interoceanic waterway, spurring concerns that the United States could invade the Central American nation. Trump argues that Panama has broken a pledge of neutrality made when the United States transferred the canal to Panama in 1999, falsely claiming that China is operating it. The canal is operated by the Panama Canal Authority, an autonomous agency overseen by the Panamanian government. WHY IS THE CANAL KEY FOR THE U.S? The Panama Canal, an 82-km (51-mile) artificial waterway that connects the Pacific and Atlantic Oceans, saves ships thousands of miles and weeks of travel. Before it was built, ships had to make the long journey around the stormy tip of South America in order to travel by sea between the two oceans. Over two-thirds of all cargo passing through the canal today originates from or is destined for the United States. The U.S. completed construction of the canal in the early 20th century, a project begun by France that cost over 25,000 workers' lives. Following pressure from anti-colonial movements, the U.S. signed treaties in 1977 granting Panama control and full sovereignty over the canal zone and guaranteeing its permanent neutrality. These took effect in 1999. Between 2023 and 2024, a severe drought aggravated by climate change lowered the level of lakes feeding the canal, forcing its administrator to restrict transits and vessel draft, which increased costs and waiting times. The passage restrictions were lifted late last year, but the waterway has not yet seen a full return of normal traffic as many shippers, especially bulk carriers and liquefied natural gas tankers, have continued taking alternative routes. WHAT IS CHINA'S INVOLVEMENT? In his inaugural address last week, Trump repeated accusations he made following his election victory that Panama has ceded control of the canal to China. He has also said Chinese troops are stationed at the canal, without providing evidence. Both Panama's government and the Chinese government have rejected those assertions. CK Hutchison Holdings (0001.HK) , opens new tab, a Hong Kong-based company, has for more than two decades operated the ports of Balboa and Cristobal at the canal's Pacific and Atlantic entrances. The company is publicly listed and not financially tied to the Chinese government, though Hong Kong firms are subject to government oversight. Private U.S. firm SSA Marine operates the MIT port on the Atlantic coast, Taiwan's Evergreen Group operates another Atlantic port known as CCT, and Singapore's PSA International operates the Rodman port on the Pacific coast, according to company and government websites. China's economic influence has been growing in Latin America, fueling worries in Washington that the resource-rich region will tilt to Chinese interests rather than those of the United States. Panamanian President Jose Raul Mulino has asserted that the canal is and will continue to be Panamanian. Panama's authorities recently announced an audit on CK Hutchison's operated ports, saying they are investigating the firm's compliance with concession agreements and whether it is adequately reporting its revenues and state payments. CK Hutchison's local arm did not respond to a Reuters request for comment, but said in a statement it has paid the state hundreds of millions of dollars during its concession and that its labor force is 99.9% Panamanian. DISPUTE OVER TOLLS Trump has repeatedly complained that the fees charged to ships to use the canal are too high, and has accused Panama of levying unfair tariffs on U.S. goods. "American ships are being severely overcharged and not treated fairly in any way and that includes the United States Navy," Trump said in the address. Between the fiscal years ended in 2020 and 2023, the canal's toll revenue increased almost 26% to $3.35 billion, according to its annual reports. In the fiscal year ended last September, the canal offset less vessel traffic with a water surcharge, which it combined with slot auctions that rose to as much as $4 million per vessel. The canal's fees are not differentiated by a ship's flag, country of origin, or of destination. The United States does not have a relevant commercial fleet under its flag, and U.S. military ships enjoy priority of passage. Mulino said the tariffs are carefully and transparently evaluated according to demand. According to shipping experts and cargo movers, tolling fee increases have been applied in recent years by other key waterways amid demand spikes and geopolitical conflicts. WHAT'S NEXT Trump's threat is already impacting Panama's debt rating. U.S. investment bank JPMorgan downgraded its recommendation on the country's bonds over threats to the canal, a key source of national income. U.S. Secretary of State Marco Rubio is scheduled to visit Panama between late January and early February, his first foreign visit in the post. Immigration will be a focus of the trip. Mulino, who took office last year, has taken a harder line on migration than his predecessor, agreeing to U.S.-funded deportation flights from Panama and installing barbed wire at the Darien Gap, a dangerous jungle route many migrants take crossing on foot out of South America on their way to the U.S. border. Sign up here. https://www.reuters.com/world/americas/what-is-panama-canal-why-has-trump-threatened-take-it-over-2024-12-23/

2025-01-28 10:56

MOSCOW, Jan 28 (Reuters) - Russia would like to see a resumption in the transit of gas via Ukraine, the Kremlin said on Tuesday, after the European Commission issued a statement saying it planned to continue talks with Kyiv on natural gas supplies to Europe. Russian gas supplies via Ukraine stopped on Jan. 1 after its transit contract expired and Kyiv declined to discuss renewing it, citing Moscow's war against it. Slovakia and Hungary have since been pushing the EU to step in to restore the flow of gas to them through what is a major pipeline. Hungary said on Monday it had received guarantees from the European Commission to protect its energy supply, something it described as a prerequisite for Budapest agreeing to renew EU sanctions on Russia. "Apparently, Hungary received some assurances from Brussels that some kind of negotiation process (with Ukraine on gas) would be resumed," Kremlin spokesman Dmitry Peskov told reporters on Tuesday. "If there are buyers - this is commerce, Russia is interested in continuing this commerce. We are interested in selling our products, especially since they are not only more competitive compared to American liquefied gas, but they are much more advantageous for European buyers," said Peskov. Slovakia welcomed the European Commission's statement on continuing talks with Ukraine on the possible renewal of gas transit through the country, adding that it now saw the option of shipping gas from Azerbaijan as being back on the table. The European Union and Ukraine had asked Azerbaijan to facilitate discussions with Russia about gas transit last year, but those talks failed. In the meantime, Russia continues to export natural gas to Southern and Central Europe via the TurkStream gas pipeline on the bed of the Black Sea. Sign up here. https://www.reuters.com/world/europe/russia-says-it-wants-gas-transit-europe-continue-2025-01-28/

2025-01-28 10:38

LONDON, Jan 28 (Reuters) - The Bank of England on Tuesday appointed one of its senior advisers, Andrea Enria, to the Prudential Regulation Committee (PRC). The BoE's Prudential Regulatory Authority (PRA) supervises the soundness of Britain's largest lenders and insurers. Its committee, the PRC, takes the most important decisions relating to the authority's policies and supervision of individual firms. Before joining the PRA in May, Enria served as chair of the European Central Bank's supervisory board. He also served as the chair of the European Banking Authority. "His extensive global experience of financial regulation and supervision will help him provide unique insights to the committee," BoE governor Andrew Bailey said in a statement. Enria will continue his role of senior adviser at the PRA while serving on the committee, the statement said. Sign up here. https://www.reuters.com/business/finance/bank-england-appoints-andrea-enria-prudential-regulation-committee-2025-01-28/

2025-01-28 10:06

MUMBAI, Jan 28 (Reuters) - The Indian rupee weakened along with most of its regional peers on Tuesday as comments about trade tariffs from U.S. President Donald Trump boosted the dollar a day after a selloff in U.S. technology stocks had hurt the greenback. The rupee closed at 86.5225 against the dollar, down 0.2% on the day, its biggest one-day percentage fall since Jan. 16. Asian currencies were mostly weaker, with the offshore Chinese yuan down 0.4% at 7.28, while the dollar index rose 0.1% to 107.9. The dollar gained after the Financial Times reported that U.S. Treasury Secretary Scott Bessent has been pushing for new universal tariffs on U.S. imports to start at 2.5% and rise gradually by the same amount each month. Trump's comments on imposing tariffs on U.S. copper and aluminium imports also supported the dollar. On Monday, the dollar index had declined to an over five-week low of 106.96 amid a selloff in U.S. tech stocks. With Trump's return to the White House, "volatility is set to persist in markets and the rupee is unlikely to stay untouched," a trader at a foreign bank said. In addition to tariffs concerns, persistent outflows have also been a pain point for the rupee, with foreign investors pulling out over $8.5 billion from local stocks and bonds so far in January. Meanwhile, dollar-rupee forward premiums dropped on Tuesday after the Reserve Bank of India announced a spate of measures to ease a liquidity crunch. The 1-year dollar-rupee implied yield declined 11 basis points to 2.17%. The central bank's "liquidity easing is a likely precursor to rate cuts," Nomura said in a note. The measures "confirm that there has been a regime shift at the RBI, with the prioritisation of domestic rates over FX and a more flexible relative approach to managing the currency." Sign up here. https://www.reuters.com/markets/currencies/rupee-logs-worst-day-nearly-2-weeks-tariff-jitters-lift-dollar-2025-01-28/

2025-01-28 10:00

JOHANNESBURG, Jan 28 (Reuters) - The South African rand was little changed on Tuesday, a day after sinking in a sharp global selloff linked to advances by Chinese artificial intelligence (AI) startup DeepSeek. At 1314 GMT, the rand traded at 18.69 against the dollar , not far from its previous close, after losing roughly 1.7% on Monday. DeepSeek's advances have made investors question lofty valuations for major U.S. technology and AI companies and drove steep falls in global equities on Monday, which turned into a widespread flight to safety. Analysts said heightened rand volatility in recent days could complicate the South African central bank's thinking ahead of a local interest rate decision on Thursday. In a Reuters poll published last week, all 19 economists surveyed thought the South African Reserve Bank (SARB) would cut its repo rate by 25 basis points to 7.50% (ZAREPO=ECI) , opens new tab this week. "If they (the SARB) needed a reminder of the fragility of the rand, then they just got it, and now the decision to reduce rates further at this meeting could amplify the rand's volatility," ETM Analytics said in a research note. The Johannesburg Stock Exchange's Top-40 (.JTOPI) , opens new tab index was up about 0.2%. The yield on the benchmark 2030 government bond was down 9 basis points to 9.045% after a sharp move higher on Monday. Sign up here. https://www.reuters.com/markets/currencies/south-african-rand-stabilises-after-deepseek-selloff-2025-01-28/

2025-01-28 09:35

KAMPALA, Jan 28 (Reuters) - The Ugandan shilling traded weaker against the dollar on Tuesday, undermined by hard currency appetite from players in the interbank market, traders said. At 0840 GMT commercial banks quoted the shilling at 3,691/3,701, compared to Monday's close of 3,683/3,693. Sign up here. https://www.reuters.com/markets/currencies/ugandan-shilling-weakens-little-interbank-appetite-2025-01-28/