PRETORIA (Reuters) – South Africa’s central bank opted for another small cut to its main interest rate on Thursday, stressing the global economic backdrop was tough and the outlook highly uncertain despite domestic inflation falling below its target.

The decision to lower the repo rate by 25 basis points (bps) to 7.75% was unanimous, with the Monetary Policy Committee not discussing a larger 50 bps cut, South African Reserve Bank Governor Lesetja Kganyago told reporters.

The majority of economists in a Reuters poll published last week had predicted a 25 bps cut, the same size of cut as in September.

Annual inflation slowed sharply to 2.8% in October, its lowest level in over four years, dropping below the central bank’s 3% to 6% target range.

“The Committee agreed that reducing the level of policy restrictiveness is still consistent with achieving the inflation target. The risk outlook, however, requires a cautious approach,” Kganyago said.

“Global interest rates could well shift higher again, and the recent rand depreciation demonstrates how rapidly changes in the global environment can affect South Africa.”

Alongside other emerging market currencies, the rand has sold off since Donald Trump’s U.S. election win, losing more than 3% against the dollar.

By Leigh Thomas

PARIS (Reuters) – France’s national budget is so strained that lawmakers are pushing a proposal to make the French work an extra seven hours each year without pay – the equivalent of one working day – to generate extra funds for state coffers.

The measure, which was approved in the Senate upper house of parliament on Wednesday but which could still be thrown out of the final budget bill, would yield an extra 2.5 billion euros ($2.63 billion) in revenues from additional labour charges.

It comes as Prime Minister Michel Barnier’s fragile ruling coalition seeks to pass a 2025 budget through a starkly divided parliament, with Marine Le Pen’s far-right National Rally (RN) threatening to topple the government with a no-confidence vote.

The amendment, proposed by centre-right Senator Elisabeth Doineau, would make people work an extra seven hours at some point over the course of the year, for which they would not be paid salary but for which their employers would have to make additional social security contributions.

An earlier idea, which would have had the same effect on the budget, was based around scrapping one of France’s official public holidays and making people work on that day. However there was no agreement on which holiday to eliminate.

France already scrapped Pentecost Monday’s status as a public holiday in 2005 to help better fund healthcare. While France is famed for introducing the 35-hour work week in 2000, in fact the French work an average of around 36 hours a week, longer than many of their western European peers.

COMPANIES CONCERNED

After spending spiralled out of control this year and tax income fell short of expectations, Barnier’s government has proposed 60 billion euros in savings in its 2025 budget through spending cuts and tax increase.

Though the government has targeted the bulk of its tax hikes on the wealthy and big companies, its budget bill includes plans to rein in a tax incentive on employers’ social security contributions for low-income workers.

The measure was intended to raise 4 billion euros, though the government has since opened the door to a lower number if lawmakers come up with an alternative to make up the difference.

Nonetheless, companies are already up in arms that the reduced tax incentive would raise their cost of labour, which is already among the highest in Europe largely because of hefty social security contributions.

Julien Crepin, the head of corporate cleaning firm Bio Propre near Paris, said that any increase in labour costs would threaten his business model and force him to raise prices, potentially leading to layoffs.

“We’ve got small margins in our business. So an earthquake like that would knock us out,” he told Reuters, adding it would be much preferable to get rid of a holiday.

Even Barnier’s own finance minister, Antoine Armand, is critical of reducing the tax incentive, saying that the French generally needed to work longer.

“An hour longer worked is an hour more of social security contributions,” he told Le Parisien newspaper on Wednesday.

($1 = 0.9508 euros)

PRETORIA – The South African Reserve Bank (SARB) has announced a reduction in the repurchase rate by 25 basis points to 7.75%, effective from November 22, 2024, as conveyed in a statement by the Governor, Lesetja Kganyago. This decision, taken unanimously by the Monetary Policy Committee (MPC), comes amidst a complex global economic landscape characterized by a stronger dollar, rising interest rates, and new inflationary pressures.

The MPC noted that South Africa’s growth recovery is gaining traction, with positive indicators such as a decrease in unemployment and a potential boost from the newly implemented Two-Pot pension system. Despite mixed data outcomes and subdued manufacturing figures, the mining sector showed strength and job gains were broad-based. The Committee forecasts growth to reach 2% by 2027.

Consumer price inflation in South Africa has dipped below the target range, registering at 2.8% in October. This is attributed to a stronger exchange rate and lower oil prices compared to the previous year. Inflation is expected to remain below 4% until mid-2025, with a modest increase projected thereafter due to higher electricity prices.

The MPC anticipates that inflation expectations will moderate further, aligning closer to the midpoint objective over the forecast horizon. The risks to the inflation outlook are considered balanced, with potential medium-term uncertainties such as higher food, electricity, water, insurance premiums, and wage settlements.

The committee’s decision to lower the policy rate aligns with the goal of achieving the inflation target while maintaining a cautious approach due to the unpredictable global interest rates and the recent depreciation of the rand. Although further easing of rates is forecasted, the MPC emphasizes that future decisions will be made on a case-by-case basis, responsive to data developments and sensitive to the balance of risks.

The SARB’s commitment to delivering low and stable inflation, coupled with structural reforms aimed at supporting growth capacity and rebuilding fiscal and monetary policy space, remains pivotal in the face of external challenges. The MPC also acknowledged recent positive credit rating outlooks and the potential for structural reforms to bolster long-term growth prospects.

This announcement follows similar rate cuts by the European Central Bank in October, and by the Bank of England and the US Federal Reserve in November. The MPC’s decision is based on a press release statement, which provides insight into the economic conditions and policy considerations guiding the bank’s actions.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

By Ezgi Erkoyun and Huseyin Hayatsever

ISTANBUL (Reuters) -Turkey’s central bank held its policy rate steady at 50% on Thursday, as expected, and said it remained attentive to inflation risks, while analysts said its comments opened the way for a possible rate cut next month.

“The level of the policy rate will be determined in a way to ensure the tightness required by the projected disinflation path, taking into account both realised and expected inflation,” the bank said after its monetary policy committee meeting.

The lira traded at 34.4975 against the dollar after the announcement, off its lows but weaker on the day.

“We believe that the central bank’s new statement on the tightness of monetary policy opens the door to rate cuts,” said Haluk Burumcekci, founding partner at Burumcekci Consulting, adding a cut next month was a serious option.

“However, uncertainty remains regarding the size of the initial step and whether it will evolve into a cycle.”

Governor Fatih Karahan said this month that monetary policy would remain tight even when a rate-cutting cycle started, and that keeping the current interest rate amid improving inflation expectations would amount to a tightening.

The central bank has kept rates steady since March, when it raised its policy rate by 500 basis points to round off an aggressive tightening cycle that started in June last year to rein in soaring inflation.

In a change of messaging in September, it began setting the stage for a rate cut by dropping a reference to potential further tightening, but it has continued to voice caution on inflation.

In October, inflation was higher than expected, dipping only to 48.6% annually, underscoring the continuing battle against soaring prices.

A Reuters poll showed the bank was expected to hold rates steady in November, with a rate cut seen in December or January.

Earlier this month, the central bank raised its year-end inflation forecasts for this year and next to 44% and 21% respectively, vowing to keep policy tight to ensure disinflation continues.

The central bank hiked rates by 4,150 basis points between June last year and March as part of an abrupt shift to orthodox policy after years of low rates that triggered a series of currency crashes and sent inflation soaring.

A test of the government’s commitment to taming inflation will come at the end of the year, when it is set to hike the minimum wage.

ANKARA – The Central Bank of the Republic of Turkey announced its decision to maintain the one-week repo auction rate at 50 percent, adhering to its current monetary policy stance. This move comes as the bank observes a decline in the underlying trend of inflation in October, with signs of slowing domestic demand contributing to disinflationary pressures.

Despite the decrease in core goods inflation, unprocessed food prices remain high due to temporary supply disruptions. The bank noted improvements in inflation expectations and pricing behavior but acknowledged ongoing risks to the disinflation process.

The central bank emphasized its commitment to a tight monetary policy, with the aim of reducing monthly inflation through a combination of domestic demand moderation, the Turkish lira’s real appreciation, and better inflation expectations. Fiscal policy coordination is also expected to play a vital role in reinforcing the disinflationary trend.

The policy rate will be set to maintain the tightness required for the anticipated disinflation path, considering both current and forecasted inflation. The bank reiterated its vigilance towards inflation risks and its readiness to utilize monetary policy tools if a significant and persistent increase in inflation is anticipated.

In response to unforeseen shifts in credit and deposit markets, the bank is prepared to support the monetary transmission mechanism with additional macroprudential measures. Liquidity conditions will be closely watched, and sterilization tools will be deployed effectively.

The bank’s future policy decisions will be shaped to foster conditions conducive to a sustained reduction in inflation and to achieve the medium-term inflation target of 5 percent. These decisions will be based on a predictable, data-driven, and transparent framework.

The bank’s commitment to price stability remains firm, with a focus on monitoring inflation indicators and the underlying trend. The summary of the Monetary Policy Committee Meeting is set to be released within five working days, as per the bank’s statement. This decision reflects the bank’s ongoing strategy to navigate economic challenges and stabilize inflation in Turkey.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

NAIROBI (Reuters) -Kenyan President William Ruto said on Thursday he had ordered the cancellation of a procurement process expected to hand control of the country’s main airport to India’s Adani Group following the indictment of the company’s founder in the United States.

Ruto said he had also directed the cancellation of a 30-year, $736-million public-private partnership deal the energy ministry had signed with a unit of the Adani Group last month to construct power transmission lines.

“”I have directed agencies within the ministry of transport and within the ministry of energy and petroleum to immediately cancel the ongoing procurement,” Ruto said in his state of the nation address, attributing the decision to “new information provided by investigative agencies and partner nations”.

U.S. authorities said on Wednesday that Gautam Adani, one of the world’s richest people, and seven other defendants agreed to pay about $265 million in bribes to Indian government officials.

Adani Group denied the allegations and said in a statement that it would seek “all possible legal recourse”.

Earlier on Thursday, Energy Minister Opiyo Wandayi had said there was no bribery or corruption involved in the award of the transmission lines contract.

VATICAN CITY – In a decisive move to address the looming financial challenges of the Vatican’s Pension Fund, Pope Francis has appointed Cardinal Kevin Farrell as the Sole Administrator. The appointment, announced in a letter to the College of Cardinals on November 19, 2024, underscores the urgent need for structural reforms to ensure the fund’s sustainability.

The Pope’s letter, released by the Holy See Press Office, conveys the gravity of the pension system’s prospective imbalance, as identified by recent analyses from independent experts. The current system, according to the Pope, fails to guarantee the fulfillment of future pension obligations, necessitating immediate action.

Cardinal Farrell’s new role as Sole Administrator is part of a broader commitment to economic reform within the Vatican. The Pope expressed his confidence in Farrell’s leadership, stressing the importance of this new phase for the stability and well-being of the community.

The management of the Pension Fund has been a longstanding concern, with the moral responsibility to provide fair and dignified pensions to employees of the Holy See and Vatican City State being a key motivator for successive Pontiffs. Addressing this issue, however, will require difficult decisions and sacrifices from all involved.

Pope Francis called for unity and collaboration among the Roman Curia and institutions connected to the Holy See, emphasizing the need for urgent structural measures to achieve sustainability. Justice and equity across generations must remain a guiding principle in this endeavor.

In his plea for prayer and support, the Pope highlighted the collective responsibility of his collaborators to facilitate this necessary path of change. The appointment of Cardinal Farrell marks a significant step towards confronting the challenges facing the Vatican’s pension system.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

The International Criminal Court (ICC) has issued arrest warrants for two Israeli officials, former Prime Minister Benjamin Netanyahu and Defense Minister Yoav Gallant, for alleged war crimes and crimes against humanity. The ICC’s Pre-Trial Chamber I announced the decision today, asserting jurisdiction over the State of Palestine and rejecting Israel’s challenges to the court’s authority.

The ICC’s ruling addressed two separate challenges submitted by Israel on September 26, 2024. The first contested the court’s jurisdiction over Israeli nationals, while the second requested a halt to proceedings and a new notification of investigation initiation. The chamber dismissed both challenges, stating that the court could exercise jurisdiction based on the territorial jurisdiction of Palestine and that a new notification was unnecessary as Israel had been informed of the investigation in 2021.

The warrants, which were initially kept secret to protect witnesses and the integrity of the investigation, were made public due to ongoing similar conduct and in the interest of victims and their families. The chamber found reasonable grounds to believe that Netanyahu and Gallant were responsible for the war crime of using starvation as a method of warfare and for crimes against humanity, including murder, persecution, and other inhumane acts against civilians in Gaza from at least October 8, 2023, to May 20, 2024.

The chamber’s decision highlighted that the alleged crimes were part of a widespread and systematic attack against the civilian population of Gaza, noting that the restrictions on humanitarian aid and essential goods were often conditional and insufficient to meet the needs of the population. The ICC also found grounds to believe that Netanyahu and Gallant failed to prevent or repress the commission of crimes or ensure proper investigation into the matters.

The warrants stem from a declaration by the State of Palestine accepting the ICC’s jurisdiction since June 13, 2014, and its accession to the Rome Statute in January 2015. The situation in the State of Palestine was referred to the ICC Prosecutor by Palestine in May 2018, with further referrals from several other countries in late 2023 and early 2024.

The ICC’s decision marks a significant move in the ongoing legal proceedings surrounding the situation in Palestine.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

BRUSSELS – New car registrations in the European Union saw a marginal increase of 1.1% in October 2024, with Spain and Germany experiencing growth while France and Italy faced declines. The European Automobile Manufacturers Association ( ACEA (BIT:ACE)) reported these figures, indicating a mixed performance across major markets.

Spain led the recovery with a 7.2% increase in new car registrations, and Germany followed with a 6% rise after three consecutive months of falling numbers. Contrasting these gains, France saw an 11.1% decrease, and Italy’s registrations dropped by 9.1%.

Despite the modest overall growth in October, the year-to-date figures for new car registrations across the EU remained relatively stable with a 0.7% increase, totaling 8.9 million units. Spain (+4.9%) and Italy (+0.9%) reported positive performance over the ten months, whereas France and Germany experienced declines of 2.7% and 0.4%, respectively.

Focusing on the electric vehicle market, battery-electric cars maintained a steady market share of 14.4% in October, but saw a 4.9% decrease in year-to-date volumes, with market share falling to 13.2% from 14% the previous year. Germany’s significant 26.6% drop in battery-electric car registrations was a major factor in this decline.

Plug-in hybrid registrations also decreased by 7.2% in October, with market share dipping to 7.7%, a 0.7 percentage point decrease from the prior year. France (-26.9%) and Italy (-24.9%) recorded considerable declines in this category.

On a positive note, registrations of hybrid-electric vehicles surged by 17.5% in October, with their market share climbing to 33.3%, surpassing petrol car registrations for the second consecutive month.

Petrol car sales, on the other hand, fell by 6.8% overall in October, with France experiencing the largest drop of 32.7%. Diesel car registrations also declined, resulting in a market share of 10.9%.

The ACEA’s report provides a snapshot of the current state of the European car market, reflecting a complex landscape of growth and decline across different segments and countries.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

BEIJING (Reuters) – China’s commerce ministry on Thursday announced a series of policy measures aimed at boosting the country’s foreign trade, including pledging to strengthen financing support to firms and expand exports of agricultural products.

With U.S. President-elect Donald Trump’s threat to impose tariffs in excess of 60% on all Chinese goods, which has rattled Chinese manufacturers and accelerated factory relocation to Southeast Asia and other regions, exporters in the world’s second-biggest economy are bracing for any trade disruptions.

Trade has been a rare bright spot in Chinese economy in recent months as tepid domestic demand and a property downturn have dragged on growth.

China will encourage financial institutions to provide more products to help firms improve their currency risk management, and to strengthen macro policy coordination to keep the yuan “reasonably stable”, the ministry said in a statement published online.

The country will also expand exports of agricultural products and support imports of core equipment and energy products, the statement said.

“(We will) guide and help firms to actively respond to unreasonable trade restrictions by other countries and create a good external environment for exports,” according to the statement.

A Reuters poll of economists showed on Thursday that the United States could impose nearly 40% tariffs on imports from China early next year, potentially slicing China’s growth by up to 1 percentage point.

In order to facilitate cross-border personnel exchanges, China will support business personnel from key trading partners to come to China, the ministry said.

The measures were earlier approved by China’s cabinet on November 8 at a meeting chaired by Premier Li Qiang, state media reported.