2025-09-04 07:30

Central bank rates too high - Sberbank CEO Gref Gref says the economy is stagnating Gref says growth was close to zero in August and July Russia cut growth forecast for 2025 VLADIVOSTOK, Russia, Sept 4 (Reuters) - Sberbank CEO German Gref, one of Russia's most powerful bankers, warned on Thursday that the economy was stagnating and that unless the central bank slashed interest rates then the country would fall into recession. Russia's war economy grew at 4.1% in 2023 and 4.3% in 2024, far faster than G7 countries, despite multiple rounds of Western sanctions imposed after its invasion of Ukraine in 2022, but it is slowing sharply under high interest rates. Sign up here. Russia's highest military spending since the Cold War has stoked inflation, which prompted the central bank to raise its key interest rate to 21% in October, the highest level since the early years of President Vladimir Putin's rule in 2003. The central bank cut to 20% in June and then to 18% in July, but there have been a series of warnings from senior officials about the fate of the economy which they say is still shackled by the crippling cost of credit. Speaking to reporters on the sidelines of the Eastern Economic Forum in the city of Vladivostok, Gref, a former economy minister, said that in the second quarter, the economy looked as if it was in "technical stagnation". Gref said that the expected cut in rates to 14% by year end from the current 18% was not enough to revive the economy - and suggested that only if the rates were cut to 12% would the economy recover. "It is important to move out of this period of controlled cooling of the economy so that it does not turn into stagnation, because reviving the economy will be much more difficult than cooling it down," he said. Gref said that data from banks - which was received faster than state statistics - showed a sharp slowdown and that there were signs that growth was close to zero in July and August. Finance Minister Anton Siluanov told Putin last week that Russia's economic growth is expected to slow to 1.5% in 2025, far below the earlier 2.5% forecast, as high interest rates imposed to reduce inflation have stifled borrowing. Pressure is mounting on the central bank - run by Gref's former colleague Elvira Nabiullina - to cut rates at its Sept. 12 meeting with a slew of warnings from senior officials and influential business chiefs about the impact of high rates. RATE DECISION Gref said that he hoped the central bank would heed the warnings and avoid a recession. "At current inflation levels, the rate at which we can hope for economic recovery is 12% or lower. So somewhere around these levels, we will most likely see economic recovery." Nabiullina's deputy, Alexei Zabotkin, said on Tuesday that Russia had made substantial progress in fighting inflation but that the central bank was exercising caution in its assessments of inflation reduction to ensure they are not overly premature or overly optimistic. Reuters in January reported exclusively that President Vladimir Putin had grown increasingly concerned about distortions in Russia's wartime economy, particularly with a cut to investment by major companies due to high interest rates. "The latest data suggests that the economy is cooling down faster than expected," said Economy Minister Maxim Reshetnikov, whose staffers are finalising the latest set of macroeconomic forecasts for the next year's budget. During Putin's first two terms as president from 2000 to 2008, the size of Russia's economy soared to $1.7 trillion from less than $200 billion in 1999. But Russia's nominal GDP is now just $2.2 trillion, about the same level it was in 2013, the year before Russia annexed Crimea from Ukraine. https://www.reuters.com/business/finance/sberbank-ceo-gref-warns-russian-recession-if-rates-are-not-slashed-2025-09-04/

2025-09-04 07:27

NICOSIA, Sept 4 (Reuters) - European prosecutors are investigating possible criminal offences relating to a 1.9 billion euro ($2.12 billion) EU-financed project to build a subsea electric cable linking Europe to the eastern Mediterranean, Cyprus's president said. Greek power grid operator IPTO is building the Great Sea Interconnector cable to link European and Cypriot transmission networks and later stretch to Israel through the Mediterranean Sea. Sign up here. The project has been hit with multiple delays, and Nicosia has sought clarifications on its cost, viability and liabilities. Greece in March reaffirmed its commitment to the project after reports it had been halted over financial and geopolitical concerns. Cypriot President Nikos Christodoulides told reporters late on Wednesday he had been informed that the European Public Prosecutor's Office had opened an inquiry for "possible criminal offences in relation to this particular project" after receiving complaints. Asked who was targeted in the probe, Christodoulides said: "It does not refer to whom." The EPPO did not immediately reply to a Reuters request for comment. In Athens, IPTO declined to comment. On completion, project promoters say the link would be "the world's longest" high-voltage cable at 1,240 km (770.5 miles) and also the deepest at 3,000 metres. https://www.reuters.com/markets/commodities/european-prosecutors-probe-east-med-cable-project-says-cyprus-2025-09-04/

2025-09-04 07:13

Gold hit record high of $3,578.50/oz on Wednesday US non-farm payrolls data due on Friday Silver eases after hitting its highest since Sept. 2011 Sept 4 (Reuters) - Gold slipped on Thursday, as investors booked profits after bullion scaled an all-time peak on rising bets for a U.S. Federal Reserve rate cut, while investors awaited the key U.S. jobs data on Friday. Spot gold fell 0.6% to $3,538.56 per ounce as of 0637 GMT. U.S. gold futures for December delivery dipped 1.1% to $3,596.20. Sign up here. Bullion hit a record high of $3,578.50 on Wednesday. "We've seen a bit of profit-taking, but gold is still in a bull market at this point in time. Rate-cut expectations and worries over the Federal Reserve's independence are going to add to safe-haven demand," GoldSilver Central MD Brian Lan said. The U.S. Labor Department said on Wednesday that job openings fell more than expected to 7.181 million in July. Several Fed officials said labour market concerns continue to mirror their beliefs that rate cuts are imminent. Fed Governor Christopher Waller said he thinks the central bank should lower rates at its next meeting this month. The focus now shifts to the U.S. non-farm payrolls data that could offer more clarity on the Fed's monetary policy path. Non-yielding gold typically performs well in a low-interest-rate environment. "Should private investors diversify more heavily into gold, we see potential upside to gold prices to well above our $4,000 mid-2026 baseline. As a result, gold remains our highest-conviction long recommendation," Goldman Sachs said. Adding to market jitters, U.S. President Donald Trump said the U.S. might have to "unwind" trade deals it has reached with the European Union, Japan, South Korea and others, if it loses a Supreme Court case over tariffs. Elsewhere, spot silver fell 0.8% to $40.85 per ounce, after hitting its highest since September 2011 on Wednesday. Platinum slipped 1% to $1,407.10 and palladium shed 0.8% to $1,138.11. https://www.reuters.com/world/india/gold-slips-record-high-profit-taking-key-us-data-eyed-2025-09-04/

2025-09-04 07:08

JOHANNESBURG, Sept 4 (Reuters) - The South African rand was steady in early trade on Thursday, as investors focused on U.S. jobs data due this week. At 0628 GMT, the rand traded at 17.7025 against the dollar , about 0.2% weaker than Wednesday's close. Sign up here. Analysts say the commodity-backed currency has not performed well recently, as it has remained range-bound even after gold prices hit an all-time peak. Like other major producers of precious metals, South Africa often benefits from higher gold prices. The U.S. dollar was little changed against a basket of currencies as investors awaited U.S. non-farm payrolls data due on Friday. With the Fed focused on the labour market, the report will set the tone for the near-term rate outlook after data on Wednesday showed job openings fell to a 10-month low in July, although layoffs remained relatively low. Traders will also continue to assess a court ruling that found most of U.S. President Donald Trump's tariffs are illegal. "This development means that the USD will remain constrained and the ZAR will remain resilient through the foreseeable future," said ETM Analytics in a research note. "The USD is losing its safe-haven appeal because of the level of uncertainty the Trump administration's tariff policies have exerted on global trade," the note said. South Africa's benchmark 2035 government bond was flat in early deals, with the yield at 9.645%, the same level as its previous close. https://www.reuters.com/world/africa/south-african-rand-steady-focus-us-jobs-data-2025-09-04/

2025-09-04 07:05

Sugar sector supports 300,000 jobs Farmers struggling with cheap imports, low global prices Trump's 30% tariff on South African goods weighs on exports KWADUKUZA, South Africa, Sept 4 (Reuters) - Nkosinathi Msweli's sugar cane farm in KwaDukuza - a rural, largely poor region on South Africa's eastern coast - has for three decades been a solid, albeit small, economic success story, employing eight full-time staff and 30 seasonal workers. But cheap sugar imports were already eating into his earnings when U.S. President Donald Trump announced a steep tariff on South African imports, creating what Msweli called a "double whammy" that now leaves the 53-year-old facing tough choices. Sign up here. "All in all, I will have to cut about 20 workers from this current season," he told Reuters, as he watched his labourers chop cane from soot-blanketed fields. "The person that is here in the field maybe has 10 lives that he's supporting." South Africa's sugar industry, valued at around 25 billion rand ($1.42 billion), directly and indirectly supports over 300,000 jobs in a country with one of the world's highest rates of unemployment. And in a nation where agricultural land ownership is still dominated by a white minority - a legacy of South Africa's apartheid past - its nearly 26,000 small farmers, who work alongside 1,100 large-scale growers, are predominantly Black. A combination of market factors and politics, however, is exposing the sector to growing headwinds. South African farmers are struggling to compete with cheap imports, including from neighbouring Eswatini, which benefits from preferential access under a regional customs treaty. Depressed global prices resulting from large harvests in major producers like India and Brazil have, meanwhile, added to the pain. And Trump's 30% tariff on imports from South Africa is set to deal a blow to exports. South Africa had previously benefited from a duty-free quota for 24,000 metric tons of sugar exports to the U.S. market under Washington's flagship trade initiative for the continent, the African Growth and Opportunities Act. While accounting for a relatively small 5% of total sugar exports, the South African Cane Growers' Association said the U.S. has served as a premium market that offered high prices, helping to sustain domestic jobs. The scale of potential job losses remains unclear. But the industry association is urging the government to secure a trade deal with Washington that would safeguard exports to the United States. "If we don't have good trade relationships with the U.S., it's going to be detrimental, not just to our sector, but to many others as well," said Pratish Sharma, a member of the association's board. Any deal, if it comes, will likely be too late for this season, however. And as Msweli calculates the costs, he knows there's suffering on the horizon. "All this is going to cause starvation and hunger," he said. ($1 = 17.5632 rand) https://www.reuters.com/world/americas/south-africas-sugar-farmers-face-double-whammy-trump-tariffs-cheap-imports-2025-09-04/

2025-09-04 06:55

OPEC+ to consider raising oil production further, sources say OPEC+ meeting set for Sunday US crude stocks rose last week, sources say Sept 4 (Reuters) - Oil prices declined by 1% on Thursday, extending the more than 2% decline of the previous session, as investors and traders looked ahead to a weekend meeting of OPEC+ where producers are expected to consider another increase in output targets. Brent crude fell 62 cents, or 1%, to $66.96 a barrel by 0641 GMT, while U.S. West Texas Intermediate crude fell 64 cents, or 1%, to $63.33 a barrel. Sign up here. Eight members of the Organization of the Petroleum Exporting Countries and allies - known together as OPEC+ - will consider further increases to production in October at a meeting on Sunday, two sources familiar with the discussions told Reuters, as the group seeks to regain market share. "The market seems to be absorbing the supply increases relatively well during 3Q high season, but the test for oil prices will be potential inventory build-ups during the winter months," said Suvro Sarkar, DBS Bank energy sector team leader. "We do not see too many positive drivers at this point, assuming geopolitical issues stay contained. Support for oil prices could diminish hereon," he added, expecting Brent prices to trade closer to $60-$65 per barrel in the near to medium term. OPEC+ had already agreed to raise output targets by about 2.2 million barrels per day from April to September, in addition to a 300,000 bpd quota increase for the United Arab Emirates. Over the past few months, despite the accelerating production increases, Middle Eastern oil prices have remained the strongest regional prices globally. This has bolstered the confidence of Saudi Arabia and other OPEC members to boost output, according to a Haitong Securities' report. Weighing further on prices were some shaky U.S. macroeconomic data overnight that cast doubts on the strength of demand in the world's biggest oil consumer, some analysts said. Weak price drivers for oil include "weak labour market conditions in the U.S.... most of the decline in July's job openings came from the acyclical parts of the job market, such as healthcare, which has been a major driver of job growth in 2025," said OANDA senior market analyst Kelvin Wong. Markets are also awaiting government data on U.S. crude stockpiles due on Thursday, a day later than usual because of a U.S. holiday on Monday. U.S. crude stocks rose by 622,000 barrels in the week ended August 29, market sources said, citing American Petroleum Institute (API) figures on Wednesday. The API estimate for a U.S. build in crude stocks went against analysts polled by Reuters who estimated, on average, that U.S. crude inventories fell by 2 million barrels. https://www.reuters.com/business/energy/oil-extends-losses-by-1-opec-consider-another-output-hike-2025-09-04/