2024-10-03 11:46

Rate cut would aid liquidity, credit access, Finmin says Expects 2024 inflation to come under 1% Finance minister met c.bank chief for nearly 2 hours More talks with BOT this month, Finmin says BANGKOK, Oct 3 (Reuters) - Thailand's finance minister said he had met the central bank governor on Thursday and discussed the issue of high household debt and the need for liquidity, as he made another pitch for a rate cut to spur revival of a sluggish economy. Lowering rates would help increase liquidity and help those who are creditworthy to access new loans as they recover, Pichai Chunhavajira said after emerging from a meeting with Bank of Thailand chief Sethaput Suthiwartnarueput that lasted nearly two hours. "We want to see more liquidity and the BOT is in agreement," he said, adding financial institutions in Thailand were risk adverse. The BOT in August held key interest rates (THCBIR=ECI) , opens new tab at a decade-high of 2.50% for a fifth straight meeting, so far resisting calls from the government for a rate cut. Pichai said monetary easing would help improve credit access. He did not say what the BOT governor said of interest rates during the meeting. The central bank declined to comment on what was discussed as its next monetary policy review is on Oct. 16. Thailand's economy, Southeast Asia's second-biggest, has recovered from the pandemic only slowly and is lagging regional peers, shackled by a slowing manufacturing sector and stubbornly high levels of household debt. Its household debt to GDP ratio was 89.6% at the end of the second quarter, or 16.3 trillion baht ($506.53 billion), among the highest levels in Asia. The finance ministry and central bank will meet again this month to discuss the inflation rate target in more detail, Pichai added. Thailand's inflation target range of 1% to 3% is reviewed annually with agreement from the BOT and Finance Ministry before cabinet approval by the end of the year. The meeting, plans for which were first reported by Reuters, follows months of government pressure to cut rates and align with fiscal policy aimed at stimulating the economy. Pichai expects an agreement over inflation target this month with 2024 inflation coming in under 1%. The two also discussed global events that triggered capital inflow, resulting in baht's recent rally, he said. Fourth quarter exports should do well, despite the strong currency, he added. Thai exports, a key engine of the economy, are expected to grow 2% this year, but the baht's rally is posing the a big challenge for the rest of the year, businesses said. Sign up here. https://www.reuters.com/markets/asia/thai-finance-minister-talks-liquidity-debt-woes-with-cbank-chief-2024-10-03/

2024-10-03 11:34

KYIV, Oct 3 (Reuters) - Indirect losses in Ukraine's key agricultural sector caused by the Russian invasion could reach $83 billion by the end of 2025, mainly due to falling harvests, the Kyiv School of Economics (KSE) said on Thursday. Ukraine is a global major grower and exporter of grain, vegetable oils and oilseeds. KSE said in a report the expected sum included losses of crop production, animal husbandry, losses of producers due to export disruptions, as well as losses due to rising production costs and losses due to the need to return land to production. "The largest share of losses was caused by a decrease in crop production. The total indirect losses due to the reduction in crop production amount to $46.5 billion," it said. KSE said crop production decreased both due to a decrease in sown areas and due to a change in production technology, which leads to a drop in the yield of major crops. Ukraine's combined grain and oilseed harvest was 107 million metric tons in 2021 but is likely to fall to around 77 million tons in 2024. KSE also said that the second largest category was losses due to export disruption and they are estimated at $24.1 billion. "The naval blockade imposed by the Russian Federation at the beginning of the invasion, and subsequently the limited functioning of the so-called grain corridor, led to an increase in logistics costs," KSE said. Amid the war with Russia, the agricultural sector remains one of the main sources of export earnings for the Ukrainian economy, supplying grain, vegetable oil and oilseeds to foreign markets. Media, quoting farm ministry data, have said farm exports totalled around $23 billion in 2023. Sign up here. https://www.reuters.com/markets/commodities/ukraine-farm-sector-indirect-losses-may-reach-83-bln-due-russian-invasion-2024-10-03/

2024-10-03 11:22

Oct 3 (Reuters) - Enbridge (ENB.TO) , opens new tab said on Thursday it would build and operate crude oil and natural gas pipelines in the U.S. Gulf of Mexico for the recently sanctioned Kaskida oil hub, operated by BP (BP.L) , opens new tab. The pipelines are expected to be operational by 2029 and would cost $700 million, the Canadian firm said. The crude oil pipeline would be called the Canyon Oil Pipeline System, with a capacity of 200,000 barrels per day (bpd). The natural gas pipeline would be named Canyon Gathering System with a capacity of 125 million cubic feet per day and would connect subsea to Enbridge's offshore existing Magnolia Gas Gathering Pipeline. BP's U.S. Gulf of Mexico output averaged 300,000 barrels of oil and gas per day in 2023. The company said last year it was targeting 400,000 bpd by 2030. Sign up here. https://www.reuters.com/business/energy/enbridge-build-pipelines-service-bps-kaskida-oil-hub-2024-10-03/

2024-10-03 11:20

RABAT, Oct 3 (Reuters) - The Moroccan government said on Thursday it plans to spend 2.5 billion dirhams ($ 260 million) on a flood relief plan that includes reconstruction aid, infrastructure upgrades and farming support. Floods ravaged several villages in the country’s south-east last month, killing at least 28 people and destroying roads. The government will offer 80,000 dirhams for partially demolished homes and 140,000 dirhams for totally collapsed ones, the prime minister’s office said. The plan includes upgrading destroyed infrastructure and support to affected farmers. Separately, the government said it will continue, for the next five months, to offer cash handouts of 2500 dirhams to some 60,000 households affected by an earthquake that hit the High Atlas mountains in September 2023. One year on, just 1000 homes have been built, according to official data, as the government continues its gradual construction aid plan for some 57,000 damaged or totally destroyed homes. Sign up here. https://www.reuters.com/world/africa/morocco-spend-260-mln-flood-relief-2024-10-03/

2024-10-03 11:08

Oct 3 (Reuters) - More heavy rain is set to batter Mexico's southern coast as Tropical Depression Eleven-E strengthens, the U.S. National Hurricane Center said on Thursday, warning of potential flooding and mudslides in areas already soaked by recent storms. The depression was located about 90 miles (150 km) southeast of Puerto Angel, Oaxaca, moving northeast at 2 mph (4 kph) with maximum sustained winds of 35 mph (55 kph), the NHC said. It is forecast to make landfall late on Thursday or early Friday in southern Mexico, with a tropical storm warning in effect throughout parts of the coast. The NHC warned that the storm could dump between 4 to 8 inches (10 - 20 cm) of rain, with isolated areas receiving up to 12 inches (30 cm), across parts of Chiapas, Oaxaca, Veracruz, Tabasco, and coastal Guerrero. Rainfall could trigger life-threatening flash floods and mudslides in the region, which has already seen heavy rains in recent weeks. Last week, Hurricane John dumped massive amounts of rain over some of the same areas, causing mudslides and at least 22 deaths. Sign up here. https://www.reuters.com/world/americas/mexico-faces-potential-floods-tropical-depression-eleven-e-strengthens-2024-10-03/

2024-10-03 11:07

TORONTO, Oct 3 (Reuters) - The Canadian dollar is forecast to extend its recovery against its U.S. counterpart in the coming year as lower borrowing costs bolster economic growth in Canada and increase investor appetite for risk, a Reuters poll found. Canada's loonie has rallied by 3.3% since hitting a near two-year low of 1.3946 per U.S. dollar, or 71.71 U.S. cents, in August. The median forecast of nearly 40 foreign exchange analysts in the Sept. 30–Oct. 2 poll showed the loonie consolidating those gains in three months, edging 0.1% lower to 1.3514, but remaining stronger than the 1.3650 expected in a September poll. In a year, the currency was predicted to advance 1.7% to 1.3275, compared to 1.3333 seen previously. The Bank of Canada is expected to continue reducing its benchmark interest rate over the coming months after cutting it by 75 basis points since June to 4.25%, while the U.S. Federal Reserve began its own easing campaign in September. Canada's economy is particularly sensitive to interest rates. Its mortgage cycle is shorter than some other major economies, while household debt as a share of net disposable income, at 184% in 2023, is the highest by far in the G7, according to OECD data. "Domestic rate cuts will begin to noticeably stimulate the domestic economy, while Fed easing should also be a boost for risk conditions more generally, all of which offers a constructive backdrop for the loonie in the new year," said Nick Rees, senior FX market analyst at Monex Europe. Canada is a major producer of commodities, including oil, so its currency tends to be sensitive to shifts in investor sentiment. One potential wild card is the outcome of the U.S. election in November. "We look for a modestly stronger loonie in 2025 as the U.S. dollar sheds some of what it gained by being a carry recipient," Avery Shenfeld and Katherine Judge, economists at CIBC Capital Markets, said of the interest income investors earn by buying the greenback and selling lower-yielding currencies. "U.S. fiscal and trade policies could alter that view post the U.S. election," the economists added in a note. "But at this point, there's too much uncertainty about who will take the White House, the make-up of Congress, or which presidential campaign pledges would actually see the light of day, to factor that in to any significant degree." (Other stories from the October Reuters foreign exchange poll) Sign up here. https://www.reuters.com/markets/canadian-dollar-expected-strengthen-2025-rate-cuts-boost-economy-2024-10-03/