<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="575" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/ESTA5AKTRBK5THV6C5GSBJUMNQ-820x575.jpg" alt="" class="wp-image-428255" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/ESTA5AKTRBK5THV6C5GSBJUMNQ-820x575.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/ESTA5AKTRBK5THV6C5GSBJUMNQ-300x210.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/ESTA5AKTRBK5THV6C5GSBJUMNQ-128x90.jpg 128w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/ESTA5AKTRBK5THV6C5GSBJUMNQ-768x538.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/ESTA5AKTRBK5THV6C5GSBJUMNQ-1536x1077.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/ESTA5AKTRBK5THV6C5GSBJUMNQ-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: African Development Bank President Akinwumi Adesina attends an inteview with Reuters at the COP27 climate summit in the Red Sea resort in Sharm el-Sheikh, Egypt, November 12, 2022. REUTERS/Emilie Madi/File Photo</figcaption></figure>



MARRAKECH, Morocco, Oct 16 (Reuters)&nbsp;&#8211;&nbsp;The African Development Bank is planning to issue its first hybrid capital bond before year-end if financial markets are stable, its chief financial officer told Reuters.



The bond will be a &#8220;benchmark&#8221; size, Hassatou Diop N&#8217;Sele told Reuters in an interview on the sidelines on the International Monetary Fund (IMF) and World Bank Annual Meetings in Marrakech, Morocco.



She declined to specify an amount or pricing, but said the AfDB note will have &#8220;100% equity content&#8221;.



Hybrid capital bonds are debt-like equity instruments that have a lower credit rating than more senior bonds.



Multilateral development banks are under pressure to maximise their balance sheets and adopt innovative forms of financing in order to lend more for development and tackling climate change.



&#8220;We are just looking for the right window in the market, to come in,&#8221; N&#8217;Sele said.



&#8220;It could be as soon as next week. We just need stability in the markets,&#8221; she said, adding: &#8220;It&#8217;s something that we would want to do this year, and I&#8217;m sure that there&#8217;s going to be a market for it.&#8221;



S&amp;P Global, which gave the upcoming notes an AA-minus credit rating compared to the bank&#8217;s AAA rating, said it expects the issuance to be between $250 million and $1 billion &#8220;subject to market conditions&#8221;.



As multilateral development banks try to meet demands for reform, the World Bank last week laid out ambitious plans to speed up and boost lending.



Meanwhile, IMF member countries failed to agree on a U.S.-backed plan to boost IMF funding without giving more shares to China and other big emerging markets.



(Reporting by Rachel Savage and Jorgelina do Rosario; Editing by Jan Harvey)

FILE PHOTO: African Development Bank President Adesina attends inteview at the COP27 in Sharm el-Sheikh

African Development Bank to issue first hybrid capital bond by year-end – CFO

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/XMA74BECSVMEFNVFISULDFPLHI-820x547.jpg" alt="" class="wp-image-428240" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/XMA74BECSVMEFNVFISULDFPLHI-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/XMA74BECSVMEFNVFISULDFPLHI-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/XMA74BECSVMEFNVFISULDFPLHI-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/XMA74BECSVMEFNVFISULDFPLHI-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/XMA74BECSVMEFNVFISULDFPLHI-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/XMA74BECSVMEFNVFISULDFPLHI-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Indonesian President Joko Widodo arrives at Beijing Capital International Airport to attend the Third Belt and Road Forum in Beijing, China, October 16, 2023. Ken Ishii/Pool via REUTERS</figcaption></figure>



BEIJING, Oct 16 (Reuters) &#8211; When China launched its Belt and Road Initiative 10 years ago, it touted huge infrastructure spending linking it with Western Europe, which as recently as 2019, Britain&#8217;s then-finance minister said had &#8220;tremendous potential to spread prosperity and sustainable development&#8221;.



Ten years on, the most senior EU leader expected to attend the third Belt and Road (BRI) Summit this week is Hungary&#8217;s populist Viktor Orban, who will join guests including Russia&#8217;s Vladimir Putin and a minister of the Afghan Taliban.



Western scepticism of the cornerstone of President Xi Jinping&#8217;s ambition to extend China&#8217;s global influence stems from China&#8217;s failure to assuage concern over its intentions, and whether there is in fact a gap this infrastructure would be filling, compounded by concern over a lack of transparency, analysts say.



Such Western doubts have coincided with Xi&#8217;s assertive leadership and a deterioration in ties over trade, human rights, COVID-19 and Taiwan. Italy, the only Group of 7 nation to sign on to the scheme, is now looking for a way out.



&#8220;Go back to 2013 &#8211; China was absolutely ascendant &#8211; Xi Jinping was forecasting a windfall from Chinese firms expanding throughout the world, but a number of serious shocks really affected the reach and breadth of the BRI,&#8221; said Matthew Erie of the University of Oxford.



<figure class="wp-block-image"><img decoding="async" src="https://graphics.reuters.com/CHINA-BRI/xmpjleajxpr/chart.png" alt="Reuters Graphics"/><figcaption class="wp-element-caption">Reuters Graphics</figcaption></figure>



The shocks include a trade war with the United States, Russia&#8217;s invasion of Ukraine, and the pandemic, said Erie. Other analysts say economic slowdown both in China and globally, and rising commodity prices, have also cast a pall over the initiative.



Facing such headwinds, Xi is pushing to make the BRI smaller and greener, and to move from big-ticket projects like dams to high-tech ones such as digital finance and e-commerce platforms. The aim is to aid a broader push for a world order that is multipolar and gives the global south more agency, rather than one dominated by Washington and its allies, analysts say.



<figure class="wp-block-image"><img decoding="async" src="https://graphics.reuters.com/CHINA-BRI/byprregekpe/China_BRI_investment.gif" alt="CHINA investment in BRI projects"/><figcaption class="wp-element-caption">CHINA investment in BRI projects</figcaption></figure>



China has at times bristled at criticism of the BRI, saying it carries anti-Chinese prejudice and a wish to contain its rise, while overlooking what it says are genuine good intentions.



China says more than 130 countries will attend this week, notably from Latin America and Africa, although, unlike in previous years, many more are sending ministers rather than heads of state.



<figure class="wp-block-image"><img decoding="async" src="https://graphics.reuters.com/CHINA-BRI/znvnznwqyvl/chart.png" alt="Reuters Graphics"/><figcaption class="wp-element-caption">Reuters Graphics</figcaption></figure>



On Monday, a hotel in downtown Beijing hosting delegations from Russia, Kazakhstan and Congo was buzzing with activity, its lobby decorated with displays of BRI goods and guarded by metal detectors at entrances.



<h2 class="wp-block-heading" id="h-insurmountable-problems">&#8216;INSURMOUNTABLE PROBLEMS&#8217;</h2>



More than $90 billion worth of Chinese commercial investment in BRI projects has faced &#8220;insurmountable problems&#8221;, according to data from the American Enterprise Institute think tank. The issues range from outright cancellation to indefinite delays, &#8220;mainly from political requirements and errors by Chinese firms&#8221;.



<figure class="wp-block-image"><img decoding="async" src="https://graphics.reuters.com/CHINA-BRI/znvnznwjyvl/chart.png" alt="Reuters Graphics"/><figcaption class="wp-element-caption">Reuters Graphics</figcaption></figure>



&#8220;From the Chinese perspective, the biggest problem is that they&#8217;ve realised now that they&#8217;re carrying an awful lot of debt in developing countries which are going to struggle to really pay it back,&#8221; said Raffaello Pantucci from the S.Rajaratnam School of International Studies in Singapore.



This is one reason the initiative has shrunk and is focused more on quality than quantity, say analysts. But the BRI is also more focused on issues like peace, climate change, energy crises and artificial intelligence, among many other areas, according to a Chinese government white paper released last week.



Ruby Osman, a China expert at the Tony Blair Institute for Global Change, said the summit would give China a chance to showcase some of the global initiatives that Xi has launched over the past two years.



In particular, she pointed to the Global Development Initiative, a $10 billion programme started in 2021 to promote &#8220;social and economic development&#8221;, similar schemes focused on security and &#8220;civilization&#8221;.



&#8220;These sort of mutually reinforcing initiatives are a way for, in Beijing&#8217;s eyes, to share Chinese governance ideals, to build consensus on Chinese norms and to start exporting elements of China&#8217;s development model,&#8221; Osman said.



The change in the BRI focus is apparent in China&#8217;s offer of assistance in recent months to Argentina, through doubling the amount it can access through a currency swap line to nearly $10 billion in a boost to its dwindling foreign currency reserves, and enabling it to pay back International Monetary Fund debt and purchase imports.



And last week, Beijing agreed to restructure loans owed by Sri Lanka and Zambia, in what appeared to be its latest demonstration of goodwill towards developing countries.



Wang Huiyao, president of the Center for China and Globalization think tank, said the BRI had &#8220;greatly pushed forward global awareness about the infrastructure deficit&#8221;.



&#8220;It&#8217;s not perfect, but it’s a process, and people are gradually realising it&#8217;s so important: we need to build infrastructure. And I think the importance of that is being realised,&#8221; Wang said.



(This story has been refiled to add the credit of the graphics journalist)



Additional reporting by Joyce Zhou; Graphics by Vineet Sachdev; Editing by Antoni Slodkowski, Don Durfee, Robert Birsel

World leaders arrive to attend China’s Belt and Road Forum

Leaders gather in China for smaller, greener Belt and Road summit

<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/7KVHJR6UA5PHZGXNL4DBLFNXXE-1-820x547.jpg" alt="" class="wp-image-428233" style="aspect-ratio:1.4990859232175502;width:840px;height:auto" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/7KVHJR6UA5PHZGXNL4DBLFNXXE-1-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/7KVHJR6UA5PHZGXNL4DBLFNXXE-1-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/7KVHJR6UA5PHZGXNL4DBLFNXXE-1-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/7KVHJR6UA5PHZGXNL4DBLFNXXE-1-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/7KVHJR6UA5PHZGXNL4DBLFNXXE-1-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/7KVHJR6UA5PHZGXNL4DBLFNXXE-1-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: People buy and sell vegetables at Mile 12 International Market in Lagos, Nigeria May 13, 2022. REUTERS/Temilade Adelaja</figcaption></figure>



ABUJA, Oct 16 (Reuters) &#8211; Nigeria&#8217;s annual inflation rose to 26.72% in September from 25.8% in August, its bureau of statistics said on Monday.



Food and non alcoholic beverages were the biggest contributors to the rise in inflation, the bureau said.



President Bola Tinubu has been under pressure to ease economic hardship after scrapping a costly decades-old petrol subsidy that has tripled prices and allowed the naira to depreciate more than 50%, leading to soaring prices in Africa&#8217;s top oil producer and most populous nation.



Inflation in Africa&#8217;s biggest economy has risen to double-digits since 2016, eroding incomes and savings, and prompting the central bank to hike interest rates to their highest level in nearly two decades.



Reporting by Elisha Bala-Gbogbo; Editing by Toby Chopra

People buy and sell vegetables at Mile 12 International Market in Lagos

Nigeria’s inflation rises to 26.72 y/y in September

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling-820x547.jpg" alt="" class="wp-image-404443" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling.jpg 1254w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Macro view of a screen of trading terminal with abstract financial graph and digits. Trading and forex concept. 3D Rendering</figcaption></figure>



Oct 16 (Reuters)&nbsp;&#8211;&nbsp;Most emerging market stocks and currencies fell on Monday with investors jittery as tensions escalated in the Middle East, but Poland&#8217;s zloty jumped after a weekend election with the opposition looking set to oust the ruling nationalists.



MSCI&#8217;s gauge for emerging market equities&nbsp;.MSCIEF&nbsp;slid 0.7% to a near one-week low on concerns that the war between Israel and Hamas could spread to other areas in the region and pose a threat to oil supplies.



The currencies index&nbsp;.MIEM00000CUS&nbsp;had eased 0.1% by 0904 GMT.



Oil importer Turkey&#8217;s lira&nbsp;TRYTOM=D3&nbsp;was at 27.8 to the dollar as crude prices eased from Friday&#8217;s nearly 6% surge but remained above $90 a barrel.&nbsp;O/R



Traders in India, also an oil importer, said the Reserve Bank of India is likely selling dollars to ensure the rupee INR= does not fall to a record low against the dollar.



&#8220;Typically, such periods of risk-off are quite short-lived,&#8221; Commerzbank analysts wrote in a note, but they added that it is still &#8220;far too early to abandon risk-off&#8221; while it is unclear how Arab states will react to the conflict.



The Israeli shekel ILS= slipped 0.2% to its lowest levels in more than seven years even as central bank Governor Amir Yaron said on Sunday that the impact of the clash with Hamas on the country&#8217;s budget will be manageable.



Investors are also still concerned about U.S. monetary policy remaining tighter for longer as oil prices stay high, fuelling fears of a resurgence in inflation pressures.



In central and eastern Europe, Poland&#8217;s zloty EURPLN= spiked 1.3% and hit a nearly two-month high against the euro as the ruling Law and Justice party appeared to have lost their parliamentary majority, opening the way for the opposition to take power.



The local stock market&#8217;s benchmark WIG index .WIG also surged 2.7%, led by banks.



&#8220;I do expect that the better outlook for local and foreign investment and unlocking European Union funds could give the economy great potential and be positive for the currency in 2024,&#8221; said Rafal Benecki, chief economist at ING Bank.



Elsewhere, China&#8217;s central bank ramped up liquidity support as it rolled over medium-term policy loans in a latest effort to buttress investor confidence.



However, the country&#8217;s blue chips index .CSI300 and Hong Kong stocks .HSI both closed down 1.0%, tracking the broader weakness in global markets.



(Reporting by Johann M Cherian in Bengaluru; Editing by Kirsten Donovan)

Macro view of a screen of trading terminal with abstract financial graph and digits. Trading and forex concept. 3D Rendering

Stocks, FX slide on geopolitical tension; zloty up on possible political shift

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107315470-1697048311311-ajn-820x547.jpg" alt="" class="wp-image-428223" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107315470-1697048311311-ajn-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107315470-1697048311311-ajn-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107315470-1697048311311-ajn-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107315470-1697048311311-ajn-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107315470-1697048311311-ajn-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107315470-1697048311311-ajn-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">U.S. Secretary of Treasury Janet Yellen arrives for a bilateral meeting on the third day of the International Monetary Fund and World Bank annual meeting, in Marrakech, Morocco, October 11, 2023.
Susana Vera | Reuters</figcaption></figure>



Overshadowed by fresh Middle East violence and hosted by a country still recovering from an earthquake, the week-long annual meetings of the International Monetary Fund and World Bank wrapped up on Saturday.



Discussions in the Moroccan city of Marrakech ranged from the prospects for a world economy weighed down by debt, inflation and conflict to the growing wealth gap between rich and poor countries and floundering efforts to tackle climate change.



Here are the main takeaways:



<h2 class="wp-block-heading" id="h-limping-economy">‘Limping economy’</h2>



The new IMF outlook &#8211; signed off before the escalation of the conflict between Israel and Hamas &#8211; sees global economic growth slowing from 3.5% last year to 3% this year and 2.9% next year, a 0.1% point downgrade from a previous 2024 estimate.



Global inflation is seen dropping from 6.9% this year to a still-high 5.8% next. Central bankers signaled readiness to end interest rate hikes if events allow, hopeful that inflation can be finally tamed without too hard a landing.



Most agreed it was too early to say how Middle East strife would affect a global economy which IMF chief economist Pierre-Olivier Gourinchas described as “limping along, not sprinting”.



<h2 class="wp-block-heading" id="h-debt-squeeze"><a></a>Debt squeeze</h2>



The heavy debt burdens of advanced economies — from the United States to China and Italy — was a recurrent theme in the meetings, which came after financial markets in recent weeks pushed U.S. bond yields higher. Italian central bank governor Ignazio Visco said there was an impression markets were “reevaluating the term premium” as investors become more nervous about holding longer-term debt.



JPMorgan chair of global research Joyce Chang put it another way. “The bond vigilantes are back, and the Great Moderation is over,” she told a panel of the two-decade era of relative economic calm before the 2008/09 financial crisis.



One policy area where this could have a knock-on effect is the fight against climate change. Vitor Gaspar, head of the IMF’s fiscal division, warned current subsidies-based policies were failing to deliver net zero emissions and that scaling them up would explode public debt. “Countries will need a new mix of policies with carbon pricing at the center,” the Fund concluded.



<h2 class="wp-block-heading" id="h-debt-deals-and-reforms"><a></a>Debt deals and reforms</h2>



Looking beyond the major developed economies, higher policy rates, a strong dollar and geopolitical uncertainties are adding to challenges for the rest of the world.



Turkey was in the spotlight as Finance Minister Mehmet Simsek pitched its reform plan. “The biggest structural issue is to bring inflation down. And they’re working on it,” said Murat Ulgen, Global Head of Emerging Markets Research at HSBC.



Kenya is looking to avoid slipping into debt distress and its central bank governor told Reuters it plans a buyback of a quarter of its $2 billion international bond maturing in June &#8211; pushing its 2024 bond up 1.2 cents on the dollar.



One debt restructuring deal emerged: Zambia finally agreed a debt rework memorandum of understanding with creditors including China and France.



Progress on Sri Lanka was less clear. Sri Lanka said on Thursday it reached an agreement with the Export-Import Bank of China covering about $4.2 billion of debt, while talks with other official creditors are stalling.



<h2 class="wp-block-heading" id="h-risks-skewed-to-the-downside"><a></a>Risks skewed to the downside</h2>



High interest rates will put some borrowers in more precarious positions, the IMF warned in its Global Financial Stability Report. Around 5% of banks globally are vulnerable to stress if those rates remain higher for longer, it estimated, and a further 30% of banks — including some of the world’s largest — would be vulnerable if the global economy enters a prolonged period of low growth and high inflation.



<h2 class="wp-block-heading" id="h-jostling-for-influence"><a></a>Jostling for influence</h2>



The Ukraine war, growing trade protectionism and tensions between the United States and China are all making consensus-building tougher: In the end, there was not enough agreement to issue the usual final communique at the end of the meetings.



There was much talk ahead of Marrakech on revamping the IMF and World Bank to better reflect the emergence of economies like China and Brazil. A U.S. proposal to boost IMF lending power but save a review of shareholdings in the fund till later won broad support. A pact announced on Saturday spoke of a “meaningful increase” in quotas by end-2023 but gave few other details. Anti-poverty groups were skeptical of what had been achieved.



“The big theme this week is G-7 countries papering over the cracks of shattered promises,” said Kate Donald, Head of Oxfam International’s Washington, D.C., office. “Despite the wringing of hands about the billions of dollars needed to tackle poverty and climate breakdown, there has been no sign of new money.”

107315470-1697048311311-ajn

Key takeaways from the IMF-World Bank meetings

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107316512-1697153033777-gettyimages-1648081445-AFP_33UD6V9-820x547.jpeg" alt="" class="wp-image-428218" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107316512-1697153033777-gettyimages-1648081445-AFP_33UD6V9-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107316512-1697153033777-gettyimages-1648081445-AFP_33UD6V9-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107316512-1697153033777-gettyimages-1648081445-AFP_33UD6V9-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107316512-1697153033777-gettyimages-1648081445-AFP_33UD6V9-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107316512-1697153033777-gettyimages-1648081445-AFP_33UD6V9-1536x1025.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107316512-1697153033777-gettyimages-1648081445-AFP_33UD6V9-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Yellow taxi cabs drive down a road in Senegal’s capital city of Dakar on Sept. 6, 2023. John Wessels | Afp | Getty Images</figcaption></figure>



BEIJING — An ambassador of an African country to China has criticized the International Monetary Fund and the World Bank for restrictive lending policies.



“The problem is that the ratings we are making for the African [countries] should be different,” Ibrahima Sory Sylla, ambassador for the West African country of&nbsp;Senegal, said Thursday at an event at Peking University.



He said ratings from Fitch or Standard and Poor’s don’t take into account local factors such as&nbsp;food security&nbsp;— but they are the basis for IMF and World Bank assessments of economic sustainability.



The number of people in West Africa experiencing an acute lack of food surged by nearly 40% in a year, according to a&nbsp;Reuters report&nbsp;in December citing the United Nation’s World Food Programme. The figure surged 60% during that time for the number of East Africans, the report said.



Senegal significantly increased its borrowing from China in 2021 and 2022, according to the Chinese Loans to Africa database managed by Boston University’s Global Development Policy Center.



While that reflected a spike in West African borrowing, such loan activity was more muted in other parts of Africa — reversing a growth trend of the last 20 years, the data showed.



“What we can understand is that so many [multilateral development banks] through the G20 [debt] suspension initiative, they said you have to go through this initiative, but when you [do so], they suddenly decided to downgrade your risk,” Senegal’s Sylla said. “And most of the developed countries, the Western countries, they can go beyond to 200% of the ratio between the debt and the GDP. Their rating is not downgraded.”&nbsp;



The IMF, World Bank and S&amp;P did not immediately respond to CNBC’s request for comment.



A Fitch Ratings spokesperson told CNBC all its sovereign rating decisions are “taken solely in accordance with one globally consistent and publicly available rating criteria.”



“Rating decisions are based on independent, robust, transparent and timely analysis,” the person added.



“My sincere belief is that IMF officials, World Bank officials, they are sincere in their belief that their debt sustainability framework works and works for the greater good,” said Jang Ping Thia, lead economist and manager of the economics department at the Asian Infrastructure Investment Bank.



“Many times, the IMF chief at the desk, try their best to stretch the envelope for the country,” Thia said at the same event Thursday.



Thia said he just returned from a trip to Africa two weeks ago and saw a “brand-new city” being built by many Chinese contractors — but with very low occupancy.



“That makes me very worried,” he said, declining to name the specific African country.



“The loan itself matters, infrastructure matters, but timing and debt management and absorption capacity matters, coordinating and staggering out and having a plan,” said the AIIB economist. “Build slowly, get people in, build more, is sometimes much more efficient, maybe not as big [a] bang.”



<h2 class="wp-block-heading" id="h-belt-and-road-forum"><a></a>Belt and Road Forum</h2>



The event about Chinese financing to Africa came just days before the country was set to hold its third Belt and Road forum, a gathering of countries involved in the China-led initiative for regional infrastructure development. Russian President Vladimir Putin is set to attend the forum, scheduled for Tuesday and Wednesday in Beijing.



Critics say the Belt and Road Initiative is a way for China to expand its global influence, while forcing poor countries to take on debt for infrastructure development, only to find themselves unable to repay the loans.



From 2000 to 2020, China loaned $160 billion to African countries, according to a report released Thursday by Peking University’s Institute of New Structural Economics. The research claimed every 1% increase in Chinese loans resulted in an increase of 0.176% in African economic growth.



Allan Joseph Chintedza, ambassador of Malawi to China, said the report should look also at the repayment period for Chinese loans.



“The gesture and what the [Belt and Road Initiative] is trying to do is perfect. It would be very sad if we actually lost out because we are not addressing some of the key issues that we need to address that you gave,” Chintedza said, without specifying.



The East African country needs&nbsp;to provide a “sustainability letter”&nbsp;from the Chinese government in order to borrow more from the IMF, Chintedza added. “Instead of us concentrating on implementing these agent programs, we are caught in between negotiations of trying to raise [funds], to improve or at least justify the debts that we have.”



“I think the majority of the loans has to be extended because that’s the only way we can be given breathing space to be able to meet the requirements but also to invest in the social sense,” he said.



Malawi has borrowed $484.6 million from China since 2000, according to the Chinese Loans to Africa Database, which does not track repayments.



“I cannot deny that the financing cooperation between China and Africa are facing some challenge or difficulties, because [of] some [countries] defaulting and the debt problem is in front of us,” said Wu Peng, director-general for the department of African affairs&nbsp;at China’s foreign ministry.



“So we cannot ignore this challenge. But I have &#8230; confidence that we still can cooperate in this field,” Wu said, adding that he is working with Chinese banks on loans for railway projects in Western Africa, which will likely be announced “in weeks.”

107316512-1697153033777-gettyimages-1648081445-AFP_33UD6V9

African ambassador criticizes IMF, World Bank for not giving enough loans

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="517" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/04/106944604-16321717072021-09-20t205319z_656748898_rc2wtp9oerrm_rtrmadp_0_worldbank-ethics-report-820x517.jpeg" alt="" class="wp-image-416545" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/04/106944604-16321717072021-09-20t205319z_656748898_rc2wtp9oerrm_rtrmadp_0_worldbank-ethics-report-820x517.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/04/106944604-16321717072021-09-20t205319z_656748898_rc2wtp9oerrm_rtrmadp_0_worldbank-ethics-report-300x189.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/04/106944604-16321717072021-09-20t205319z_656748898_rc2wtp9oerrm_rtrmadp_0_worldbank-ethics-report-143x90.jpeg 143w, https://cms.cnbcafrica.com/wp-content/uploads/2022/04/106944604-16321717072021-09-20t205319z_656748898_rc2wtp9oerrm_rtrmadp_0_worldbank-ethics-report-768x484.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/04/106944604-16321717072021-09-20t205319z_656748898_rc2wtp9oerrm_rtrmadp_0_worldbank-ethics-report-1536x969.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/04/106944604-16321717072021-09-20t205319z_656748898_rc2wtp9oerrm_rtrmadp_0_worldbank-ethics-report-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A participant stands near a logo of World Bank at the International Monetary Fund &#8211; World Bank Annual Meeting 2018 in Nusa Dua, Bali, Indonesia, October 12, 2018.
Johannes Christo | Reuters</figcaption></figure>



MARRAKECH, Morocco, Oct 13 (Reuters)&nbsp;&#8211;&nbsp;The World Bank on Friday said it is bolstering collaboration with nine multilateral development banks (MDBs) to accelerate its vision of a&nbsp;liveable planet&nbsp;free of poverty.



It said measures already being implemented or under consideration by the MDBs could yield $300 billion to $400 billion of additional lending capacity to help developing countries confront &#8220;a perfect storm of intertwined crises — from climate shocks and conflicts to pandemics and surging debt.&#8221;



Increased collaboration among the multilateral development banks is a key part of the World Bank&#8217;s new playbook, and one supported in a statement at the ongoing annual meetings of the Bank and International Monetary Fund by Group of 20 finance leaders.



The African Development Bank, the Asian Development Bank, the Asian Infrastructure Investment Bank, the Council of Europe Development Bank, the European Bank for Reconstruction and Development, the European Investment Bank, the Inter-American Development Bank, the Islamic Development Bank, and the New Development Bank joined the World Bank in the collaboration agreement.



&#8220;Working together for a common cause, we can bring more experience, expertise, knowledge, and, especially, more funding to the massive challenges facing the world today,&#8221; World Bank President Ajay Banga said. &#8220;Together, we are greater than the sum of our parts.&#8221;



The banks agreed to boost financing capacity through portfolio guarantees and hybrid capital, while stepping up a joint approach to credit rating agencies.



They said they would boost collective efforts on climate, with better tracking and reporting of climate outcomes, while enhancing country-level collaboration for greater impact.



They would also work to catalyze private sector engagement.



The World Bank is strengthening efforts to partner with the private sector, civil society, other multilateral institutions, and charitable organizations.



(Reporting by Andrea Shalal; editing by Christina Fincher and John Stonestreet)

106944604-16321717072021-09-20t205319z_656748898_rc2wtp9oerrm_rtrmadp_0_worldbank-ethics-report

World Bank, multilateral development banks jointly seek to boost lending power

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico-820x462.jpeg" alt="" class="wp-image-420118" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">The new economic measures laid out by the U.K. government “will likely increase inequality”, according to a spokesperson from the International Monetary Fund.
Yuri Gripas | Reuters</figcaption></figure>



MARRAKESH, Oct 13 (Reuters)&nbsp;&#8211;&nbsp;Germany will inject an additional 80 million euros ($84.27 million) into the International Monetary Fund&#8217;s low-income trust for poor countries, Finance Minister Christian Lindner said on the sidelines of the IMF&#8217;s meeting in Marrakesh on Friday.



The IMF has been urging member countries to fill a $1.2 billion gap in the $3 billion subsidy account.



Japan already made a &#8220;very impressive pledge&#8221; this week, according to IMF Managing Director Kristalina Georgieva.



The IMF expects further funds for the Poverty Reduction and Growth Trust (PRGT), which provides subsidies to enable zero-interest rate loans to the poorest countries, on Saturday.



The PRGT, created in 2021 to mitigate the effects of the coronavirus pandemic, has helped over 50 countries, including Haiti and Nepal, with loans worth around $29 billion.



($1 = 0.9493 euros)



IMF&#8217;s Georgieva lauds Japan&#8217;s contribution to low-income trust, sees more coming.



(Reporting by Andreas Shalal and Christian Kraemer; Writing by Miranda Murray; Editing by Rachel More)

107004870-16427966702022-01-21t201709z_969185203_rc2w3s99wb9o_rtrmadp_0_argentina-imf-mexico

Germany adds extra 80 mln euros to IMF pot for poor countries

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="612" height="350" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1040865674-612x612-1.jpg" alt="" class="wp-image-400879" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1040865674-612x612-1.jpg 612w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1040865674-612x612-1-300x172.jpg 300w" sizes="auto, (max-width: 612px) 100vw, 612px" /><figcaption class="wp-element-caption">Stock market report. 3d illustration</figcaption></figure>



Oct 13 (Reuters)&nbsp;&#8211;&nbsp;Risk sentiment across most emerging markets soured on Friday, with stocks and currencies tumbling as evidence of China&#8217;s wobbly economic recovery depressed sentiment and concerns about U.S. interest rates resurfaced.



MSCI&#8217;s index tracking emerging markets equities&nbsp;.MSCIEF&nbsp;slid 1.0%, with China&#8217;s blue chip index&nbsp;.CSI300&nbsp;and Hong Kong&#8217;s Hang Seng&nbsp;.HIS&nbsp;dropping 1.1% and 2.3%, respectively.



Data showed consumer prices in China faltered in September, showing persistent deflationary pressures, though a narrowing trade slump offered some hope of stabilisation in the top consumer.



&#8220;Trade data suggests the situation is improving, though soft developed market demand underscores that China may need to rely more on domestic demand to sustain its recovery,&#8221; UBS analysts wrote in a note.



&#8220;We think a bottom is near as policy support kicks in and more signs suggest a turn in the economy.&#8221;



Emerging markets currencies&nbsp;.MIEM00000CUS&nbsp;fell 0.2% by 8:47 GMT against the dollar.



Worries that the U.S. Federal Reserve will stay restrictive on monetary policy for longer than previously expected were also an overhang following a hotter-than-expected headline inflation number on Thursday.



A rise in crude prices on Friday clouded the outlook for inflation while traders were also nervous as the conflict in Middle East raged on for another day ahead of Israel&#8217;s credit rating review by Moody&#8217;s.



Israel Bonds, the Israel government&#8217;s vehicle for diaspora bonds, said the country raised $200 million from diaspora bond sales since the conflict began, while iShares MSCI Israel exchange-traded fund (EIS) EIS.N suffered substantial outflows this week after its price hit a three-year low.



But currencies and stocks in the region remain on course for their first weekly gain in four weeks, helped by dovish comments from U.S. policymakers in the days leading up to the U.S. inflation report.



Emerging markets-focused fund manager AshmoreASHM.L said assets under management fell in the third quarter, with net outflows of $2.9 billion, amid subdued market conditions due to weaker China economic data and high interest rates.



In central and eastern Europe, Poland&#8217;s zloty&nbsp;PLN=&nbsp;inched lower against the euro. Final data confirmed September consumer prices were at 8.2% year-on-year.



Romania&#8217;s leu RON= shed 0.1% and Czech&#8217;s crown CZK= added 0.2% ahead of an S&amp;P Global&#8217;s credit rating review.



(Reporting by Johann M Cherian and Amruta Khandekar in Bengaluru; Editing by Krishna Chandra Eluri)

Stock market report. 3d illustration

Stocks, currencies slide as China data, rate concerns weigh

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107316539-1697159674866-gettyimages-1720140335-fc_1113145-820x462.jpeg" alt="" class="wp-image-428174" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107316539-1697159674866-gettyimages-1720140335-fc_1113145-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107316539-1697159674866-gettyimages-1720140335-fc_1113145-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107316539-1697159674866-gettyimages-1720140335-fc_1113145-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107316539-1697159674866-gettyimages-1720140335-fc_1113145-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107316539-1697159674866-gettyimages-1720140335-fc_1113145.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">An aerial view of a container ship leaving the dockyard in Qingdao in east China’s Shandong province. Future Publishing | Future Publishing | Getty Images</figcaption></figure>



BEIJING — China reported a smaller-than-expected decline in exports in September from a year ago, while imports missed, according to customs data released Friday.



In U.S.-dollar terms, exports fell by 6.2% last month from a year ago. That’s less than the 7.6% drop forecast by analysts in a Reuters poll.



Imports also fell by 6.2% in U.S.-dollar terms in September compared to a year ago — slightly more than the 6% decline expected by the Reuters poll.



China’s exports have fallen on a year-on-year basis every month this year starting in May. The last positive print for imports on a year-on-year basis was in September last year.



China’s trade slumped this year amid lackluster global demand for Chinese good and muted domestic demand.



Bucking the decline in trade with major trading partners were Chinese imports from the European Union, up modestly in September from a year ago, according to CNBC calculations of the official data.



The U.S. is China’s largest trading partner on a single-country basis, while the Association of Southeast Asian Nations has recently surpassed the EU as China’s largest trading partner on a regional basis.



For the first three quarters of the year, China’s exports to the U.S. fell by 16.4%, while imports dropped by 6% during that time.



Russia was the only major country or region in the Chinese customs agency’s report that showed growth in both exports and imports for the first three quarters of the year from a year ago.



By product category, China’s global export of autos remained the fastest growing, up on a unit basis by 64.4% from a year ago for the first three quarters of 2023. That’s slower than the 69% pace for the year recorded as of August.



China’s exports of ships and boats for the year picked up pace from August on a unit basis to a 16.2% year-on-year increase in the third quarter.



The volume of China’s cosmetics imports fell by 14.2% in the first three quarters compared to a year ago. The volume of crude oil imports rose by 14.6% during that time but fell on a U.S. dollar basis.



The pace of crude oil imports on a year-to-date basis in September was little changed from August.



<h2 class="wp-block-heading" id="h-slowing-economic-growth"><a></a>Slowing economic growth</h2>



China’s recovery from the pandemic slowed in the last few months, dragged down by a slump in the massive real estate sector.



The International Monetary Fund this week trimmed its 2023 China growth forecast to 5% from 5.2%, while maintaining a global growth forecast of 3% for the year. The world economy grew by 3.5% last year.



China is set to report September retail sales on Oct. 18, along with third-quarter GDP figures.



Amid rising tensions with the U.S. and Europe in the last few years, China has sought to boost its trade with regional partners in Southeast Asia, as well as countries participating in the Belt and Road Initiative. The BRI is a China-led push for developing regional infrastructure such as ports and railways.



As of the end of September, China said it has trains running to 217 cities in 25 European countries.



Cargo transported along those rail lines accounted for 8% of China-EU trade in 2022, up from 1.5% in 2016, Chinese officials said this week.



China also claimed imports and exports with Belt and Road partner countries reached $19.1 trillion between 2013 and 2022 — for an average annual growth in trade of 6.4%.



The third Belt and Road forum is scheduled to be held in Beijing Tuesday and Wednesday. Russian President Vladimir Putin is expected to attend.

107316539-1697159674866-gettyimages-1720140335-fc_1113145

China’s exports and imports drop again in September

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="539" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/IB6MGVQQYJPTRDC3PJGNDCLXOQ-820x539.jpg" alt="" class="wp-image-428168" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/IB6MGVQQYJPTRDC3PJGNDCLXOQ-820x539.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/IB6MGVQQYJPTRDC3PJGNDCLXOQ-300x197.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/IB6MGVQQYJPTRDC3PJGNDCLXOQ-137x90.jpg 137w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/IB6MGVQQYJPTRDC3PJGNDCLXOQ-768x505.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/IB6MGVQQYJPTRDC3PJGNDCLXOQ-1536x1009.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/IB6MGVQQYJPTRDC3PJGNDCLXOQ-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: A view shows Nigeria&#8217;s Central Bank headquarters in Abuja, Nigeria November 22, 2020. Picture taken November 22, 2020. REUTERS/Afolabi Sotunde/File Photo</figcaption></figure>



ABUJA, Oct 12 (Reuters)&nbsp;&#8211;&nbsp;Nigeria&#8217;s central bank said on Thursday it plans to intervene in the country&#8217;s foreign exchange market occasionally to boost liquidity, while ending an eight-year ban on 43 items that had been restricted from accessing forex on the official market.



The ban, which covered items such as rice, cement and poultry, was imposed as part of the unorthodox policies under former central bank Governor Godwin Emefiele in an effort to prop up the naira currency.



The lifting of the ban will cheer analysts and investors who had been warning that the restriction showed the central bank was still maintaining some form of capital controls.



The Central Bank of Nigeria (CBN) also restated a pledge by new Governor Olayemi Cardoso last month to quickly clear the bank&#8217;s backlog of unsettled forex obligations to local lenders, estimated at about $7 billion.



Africa&#8217;s largest economy has struggled to get to grips with chronic dollar shortages on the official market, where trading volumes have steadily declined, causing the naira to slump to a record low against the dollar, with a 37% premium over the official exchange rate in street trading on Thursday.



&#8220;As part of its responsibility to ensure price stability, the CBN will boost liquidity in the Nigerian Foreign Exchange Market by interventions from time to time,&#8221; central bank spokesperson Isa Abdulmumin said.



&#8220;As market liquidity improves, these CBN interventions will gradually decrease,&#8221; he said in a statement.



The naira has been weakening on the parallel market due to speculation and as excess demand is funnelled into the informal market, widening the gap with the official market, where restrictions on trading the currency were lifted in June.



The latest measures announced by the central bank are &#8220;another market-friendly step&#8221; to unify the exchange rates and ease pressure on the naira in the parallel market, where importers of the 43 items had to access dollars, said Charlie Robertson, head of macro strategy at U.K. based FIM Partners.



&#8220;There is still more to do. To reduce forex shortages in the official market, the CBN might also need to signal that commercial banks can offer a weaker naira rate for dollars, to help increase the supply of dollars,&#8221; Robertson said.



The central bank said it would continue to promote orderliness and professional conduct by all market participants to ensure market forces determine exchange rates on a &#8220;willing buyer-willing seller&#8221; principle.



The bank also reiterated that the prevailing foreign exchange rates should be referenced from its website and from other recognised trading systems to promote &#8220;price discovery, transparency, and credibility in the forex rates.&#8221;



Abdulmumin said the central bank seeks to attain a &#8220;single forex market&#8221; and &#8220;consultation is ongoing with market participants to achieve this goal.&#8221;



(Additional reporting by Rachel Savage; Writing by Elisha Bala-Gbogbo; Editing by Mark Heinrich, Jane Merriman, Leslie Adler and Diane Craft)

FILE PHOTO: FILE PHOTO: A view shows Nigeria’s Central Bank headquarters in Abuja

Nigeria central bank to intervene in forex market, lifts forex ban on 43 items

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107296969-1694088895591-gettyimages-1664577879-_dsc7331-820x462.jpeg" alt="" class="wp-image-428157" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107296969-1694088895591-gettyimages-1664577879-_dsc7331-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107296969-1694088895591-gettyimages-1664577879-_dsc7331-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107296969-1694088895591-gettyimages-1664577879-_dsc7331-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107296969-1694088895591-gettyimages-1664577879-_dsc7331-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107296969-1694088895591-gettyimages-1664577879-_dsc7331.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A person goes through a note pad while shopping for items at a Costco Wholesale store on September 6, 2023 in Colchester, Vermont.  Robert Nickelsberg | Getty Images</figcaption></figure>



Prices that consumers pay for a wide variety of goods and services increased at a slightly faster-than-expected pace in September, keeping inflation in the spotlight for policymakers.



The consumer price index, a closely followed inflation gauge, increased 0.4% on the month and 3.7% from a year ago, according to a Labor Department report Thursday. That compared with respective Dow Jones estimates of 0.3% and 3.6%. Headline inflation increased 0.6% in August.



Excluding volatile food and energy prices, the so-called core CPI increased 0.3% on the month and 4.1% on a 12-month basis, both exactly in line with expectations. Policymakers place more weight on the core numbers as they tend to be better predictors of long-term trends. Core inflation also increased 0.3% in August, when it was up 4.3% from the previous 12 months.



In keeping with recent trends, shelter costs were the main factor in the inflation increase. The index for shelter, which makes up about one-third of the CPI weighting, accelerated 0.6% for the month and 7.2% from a year ago. On a monthly basis, shelter accounted for more than half the rise in the CPI, the Labor Department said.



Energy costs rose 1.5%, including a 2.1% pickup in gasoline prices and 8.5% in fuel oil, and food was up 0.2% for the third month in a row. On a 12-month basis, food costs climbed 3.7%, including a 6% increase for food away from home, while energy costs were off 0.5%.



Services prices, considered a key for the longer-run direction for inflation, also posted a 0.6% gain excluding energy services, and were up 5.7% on a 12-month basis. Vehicle prices were mixed, with new vehicles up 0.3% and used down 2.5%. Used vehicle prices, a big driver of inflation in the early days of the Covid pandemic, were down 8% from a year ago.



Among the major CPI components, the other main decliners were apparel (-0.8%) and medical care commodities (-0.3%). Medical care services increased 0.3% on the month but were down 2.6% on an annual basis.



Markets showed only a modest reaction to the report. Stocks edged higher at the open, while Treasury yields came off previous lows, with longer-duration notes little changed.



The CPI increase meant worker wages fell in real terms.



Real average hourly earnings dropped 0.2% on the month, owing to the difference between the inflation rate and the 0.2% gain in nominal earnings, the Labor Department said in a separate report. On a yearly basis, earnings were up 0.5%.



“Just because the rate of inflation is stable for now doesn’t mean its weight isn’t increasing every month on family budgets,” said Robert Frick, corporate economist with Navy Federal Credit Union. “That shelter and food costs rose particularly is especially painful.”



In other economic news Thursday, the Labor Department reported that initial jobless claims totaled 209,000, unchanged from the previous week and just below the 210,000 estimate.



The CPI report comes with Federal Reserve officials contemplating their next policy moves.



Minutes from the Fed’s September meeting, released Wednesday, reflected divisions within the rate-setting Federal Open Market Committee. The meeting concluded with the committee opting not to raise interest rates, but the summary showed lingering concern about inflation and worries that upside risks remain.



Since then, however, Treasury yields have jumped, at one point hitting 16-year highs.



Multiple Fed officials have said that the increases could negate the need for further policy tightening, and markets now are pricing only a small chance that the central bank votes to hike before the end of the year. Market pricing further indicates that the Fed will shave about 0.75 percentage point off its key borrowing rate before the end of 2024.



Recent days, though, have brought mixed news on where inflation is heading.



The Labor Department said Wednesday that prices at the wholesale level increased 0.5% in September, pushing the 12-month rate to 2.2%, the highest since April and above the Fed’s goal of 2% inflation.



Correction: The Labor Department said Wednesday that prices at the wholesale level increased 0.5% in September. An earlier version misstated the day.

107296969-1694088895591-gettyimages-1664577879-_dsc7331

U.S. consumer prices rose 0.4% in September, more than expected

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="800" height="554" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/2023-10-12T093843Z_1_LYNXMPEJ9B0EK_RTROPTP_3_SAFRICA-ECONOMY.jpg" alt="" class="wp-image-428146" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/2023-10-12T093843Z_1_LYNXMPEJ9B0EK_RTROPTP_3_SAFRICA-ECONOMY.jpg 800w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/2023-10-12T093843Z_1_LYNXMPEJ9B0EK_RTROPTP_3_SAFRICA-ECONOMY-300x208.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/2023-10-12T093843Z_1_LYNXMPEJ9B0EK_RTROPTP_3_SAFRICA-ECONOMY-130x90.jpg 130w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/2023-10-12T093843Z_1_LYNXMPEJ9B0EK_RTROPTP_3_SAFRICA-ECONOMY-768x532.jpg 768w" sizes="auto, (max-width: 800px) 100vw, 800px" /><figcaption class="wp-element-caption">FILE PHOTO: Workers are seen at a construction site of a housing estate, in Eikenhof, in the south of Johannesburg, South Africa, January 18, 2023. REUTERS/Siphiwe Sibeko/File Photo</figcaption></figure>



JOHANNESBURG, Oct 12 (Reuters) &#8211; South African business confidence fell marginally in September, with factors like energy supply, inflation and construction applying downward pressure in month-on-month terms, data showed on Thursday.



The South African Chamber of Commerce and Industry (SACCI) Business Confidence Index dropped to 108.2 in September from 108.6 in August.



SACCI said in a statement that foreign business-related factors had the most positive short-term impact on business confidence in September.



&#8220;The current business climate is not conducive to stimulating overall economic activity. Remedying this situation and enhancing the economy&#8217;s long-term prospects will require appropriate investments in human capital and fixed capital stock,&#8221; it added.



(Reporting by Tannur Anders; Editing by Alexander Winning)

Workers are seen at a construction site of a housing estate

South African business confidence index dips in September

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="728" height="485" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/Q26RQAICWNPFJFYJE2MKCI6H7Q-1.jpg" alt="" class="wp-image-428138" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/Q26RQAICWNPFJFYJE2MKCI6H7Q-1.jpg 728w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/Q26RQAICWNPFJFYJE2MKCI6H7Q-1-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/Q26RQAICWNPFJFYJE2MKCI6H7Q-1-135x90.jpg 135w" sizes="auto, (max-width: 728px) 100vw, 728px" /><figcaption class="wp-element-caption">South Africa&#8217;s central bank governor, Lesetja Kganyago, arrives to deliver a keynote address on monetary policy, growth and jobs at the University of the Witwatersrand in Johannesburg, South Africa, November 1, 2022. REUTERS/Siphiwe Sibeko</figcaption></figure>



MARRAKECH, Morocco, Oct 11 (Reuters) &#8211; The head of South Africa&#8217;s central bank said on Wednesday the government needed to rebuild its fiscal buffers to help bring down inflation, and that he expected domestic interest rates to stay higher for longer.



Governments globally need to join central banks in dismantling the stimulus of the COVID pandemic years, Lesetja Kganyago said.



&#8220;Fiscal authorities have got to be rebuilding their fiscal buffers so that the process of disinflation is assisted,&#8221; he told Reuters in an interview on the sidelines of the International Monetary Fund and World Bank Annual Meetings in Marrakech.



&#8220;Failure to disinflate economies would result in higher financing costs for the fiscal authorities and by extension to all of us&#8230; It also applies to South Africa.&#8221;



In September, the South African Reserve Bank (SARB) kept its main interest rate unchanged at 8.25%, its second pause after 10 consecutive hikes, after inflation edged up to 4.8% in August from 4.7% in July.



The bank&#8217;s inflation target range is 3-6%, but it said in September it aimed to hit the middle of that band &#8220;sustainably over time&#8221;.



Kganyago said he would know more about South Africa&#8217;s fiscal trajectory after a budget statement due on Nov. 1.



HSBC economist David Faulkner said in a note to clients that he expected a deficit close to 5.2% of GDP this year, which could widen in the absence of a credible plan to rein in spending and shore up revenues.



The government has forecast a deficit of 4%.



Kganyago said domestic interest rates were expected to remain higher for longer.



He did not know if more hikes were on the horizon, but &#8220;the disinflation job is not yet done,&#8221; he said.



The bank expected inflation to be sustainably on target in 2025.



Risks to that outlook included high oil prices, global financial conditions and the strong dollar, and food prices reversing their downward trend, Kganyago said.



(Reporting by Rachel Savage, additional reporting by Kopano Gumbi in Johannesburg, editing by John Stonestreet)

South Africa’s central bank governor to delivers keynote address

South Africa central bank head: govt needs to rebuild fiscal buffers to disinflate

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/Q56AMJOVHVJYVFJEAAB3MUBPCI-820x547.jpg" alt="" class="wp-image-428131" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/Q56AMJOVHVJYVFJEAAB3MUBPCI-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/Q56AMJOVHVJYVFJEAAB3MUBPCI-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/Q56AMJOVHVJYVFJEAAB3MUBPCI-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/Q56AMJOVHVJYVFJEAAB3MUBPCI-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/Q56AMJOVHVJYVFJEAAB3MUBPCI-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/Q56AMJOVHVJYVFJEAAB3MUBPCI-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Israeli soldiers argue with a demonstrator holding a Palestinian flag during a protest against Israeli settlements in Jordan Valley in the Israeli-occupied West Bank June 6, 2022. REUTERS/Raneen Sawafta</figcaption></figure>



Oct 12 (Reuters)&nbsp;&#8211;&nbsp;South Africa is ready to help mediate in the Israeli-Palestinian conflict, drawing on its experience at conflict resolution, President Cyril Ramaphosa said on Thursday.



Ramaphosa also called for the immediate and unconditional opening of &#8220;humanitarian corridors&#8221; in the Middle East so that aid can get to people who urgently need it, in the wake of days of Israeli air strikes on Gazan targets in retribution for a weekend attack by Hamas militants.



&#8220;We remain gravely concerned at the devastating escalation in the Israeli-Palestinian conflict and the atrocities committed against civilian populations. We call for the immediate cessation of violence and the exercise of restraint,&#8221; Ramaphosa said in a statement.



&#8220;South Africa stands ready to work with the international community and to share our experience in mediation and conflict resolution as we have done on the continent and around the world.&#8221;



(Reporting by Alexander Winning; editing by Jason Neely)

An Israeli-Palestinian “flags war” brews as violence flares

South Africa offers to help mediate in Israeli-Palestinian conflict

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/LRM74LMDFRIUNMWOPOFH3RBD2U-820x547.jpg" alt="" class="wp-image-428117" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/LRM74LMDFRIUNMWOPOFH3RBD2U-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/LRM74LMDFRIUNMWOPOFH3RBD2U-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/LRM74LMDFRIUNMWOPOFH3RBD2U-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/LRM74LMDFRIUNMWOPOFH3RBD2U-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/LRM74LMDFRIUNMWOPOFH3RBD2U-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/LRM74LMDFRIUNMWOPOFH3RBD2U-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Wind turbines are seen at the Saint-Nazaire offshore wind farm, off the coast of the Guerande peninsula in western France, September 30, 2022. REUTERS/Stephane Mahe/File Photo</figcaption></figure>



LONDON, Oct 11 (Reuters)&nbsp;&#8211;&nbsp;Global economic losses could reach $5 trillion under a &#8220;plausible increase&#8221; in extreme weather events linked to climate change that cause crop failures and food and water shortages, insurance marketplace Lloyd&#8217;s of London said on Wednesday.



Lloyd&#8217;s, which carried out the research alongside the Cambridge Centre for Risk Studies, stressed that its &#8220;systemic risk scenario&#8221;, which models the global economic impact of extreme weather, was hypothetical. But it said the work would improve business and policymaker understanding of their exposure to critical threats such as extreme weather.



When adjusting the estimated $5 trillion in losses over a five-year period for the probability of those extreme weather events occurring, the expected global economic losses were $711 billion, Lloyd&#8217;s said.



&#8220;The global economy is becoming more complex and increasingly subject to systemic threats,&#8221; said Trevor Maynard, Executive Director of Systemic Risks at the Cambridge Centre for Risk Studies.



He added that the research would &#8220;help businesses and policymakers explore the potential impacts of these scenarios&#8221;.



Lloyd&#8217;s modelled global economic losses of extreme weather events by estimating the impact of food and water shocks on global gross domestic product over a five-year period.



The weighted average loss across the three severities it modelled &#8211; major, severe and extreme &#8211; was $5 trillion over the five years, ranging from $3 trillion in the lowest severity scenario up to $17.6 trillion in the most extreme.



Lloyd&#8217;s also modelled for events concentrated in regions &#8211; it said extreme weather events centred in Greater China would lead to the biggest losses, of $4.6 trillion.



The Caribbean region would lose 19% of its GDP over five years if the extreme weather events were concentrated there, Lloyd&#8217;s estimated.



(Reporting by Tommy Reggiori Wilkes; editing by Mark Heinrich)

FILE PHOTO: The Saint-Nazaire offshore wind farm

Global economic losses from extreme weather could hit $5 trln -Lloyd’s

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling-820x547.jpg" alt="" class="wp-image-404443" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling.jpg 1254w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Macro view of a screen of trading terminal with abstract financial graph and digits. Trading and forex concept. 3D Rendering</figcaption></figure>



Oct 11 (Reuters)&nbsp;&#8211;&nbsp;Emerging market equities and currencies hit a two-week high on Wednesday as hopes of fresh stimulus from China and a dovish shift in tone from several Federal Reserve policymakers eclipsed geopolitical concerns in the Middle East.



MSCI&#8217;s index for emerging market equities&nbsp;.MSCIEF&nbsp;rose 1.2% by 0902 GMT, extending a 1% jump from the previous session.



Stocks in China .CSI300 and Hong Kong .HSI rose on a report that Beijing is preparing new stimulus to meet growth targets. The International Monetary Fund had on Tuesday cut its growth forecast for China amid a real estate crisis.



South Korea&#8217;s benchmark stock index .KS11climbed nearly 2%, posting its biggest gain in nine months as shares of chipmakers and battery manufacturers, including Samsung Electronics 005930.KS rallied on robust earnings reports.



The currencies index .MIEM00000CUS advanced 0.2%, with the dollar =USD rangebound after a number of top Fed officials suggested that a rise in U.S. Treasury yields could have reduced the need for further policy tightening.



Optimism around China and easing jitters around the Fed&#8217;s rate trajectory have lifted sentiment towards risk-sensitive assets and pressured U.S yields following a jolt on Monday from the conflict between Israel and Palestinian Islamist group Hamas.



Israel launched a diaspora bond campaign on Tuesday to raise money amid a war with Hamas, according to posts on social media sites linked with Israel Bonds.



&#8220;Investors are struggling to assess how that conflict may develop, because obviously the key question is whether it&#8217;s going to escalate or not,&#8221; said Piotr Matys, senior FX analyst at In Touch Capital Markets.



&#8220;We&#8217;re going to have key U.S. data and that will provide fresh clues on how long the Fed may have to maintain that tight monetary policy. And that data probably is going to be a short distraction from the main focus on geopolitics.&#8221;



Later in the day, investors will assess minutes from the Fed&#8217;s rate-setting meeting last month when it held interest rates steady, with Thursday&#8217;s data on consumer prices also on the watchlist.



The South African rand&nbsp;ZAR=&nbsp;rose 0.7% while the Turkish lira&nbsp;TRYTOM=D3&nbsp;was flat at 27.273 to the dollar.



Central and Eastern European currencies also firmed against the euro with Hungary&#8217;s forint EURHUF= up 0.3% ahead of the release of minutes from the central bank&#8217;s last rate-setting meeting.



(Reporting by Amruta Khandekar; Editing by Varun H K)

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featured

African Development Bank to issue first hybrid capital bond by year-end – CFO

Leaders gather in China for smaller, greener Belt and Road summit

Nigeria’s inflation rises to 26.72 y/y in September

Stocks, FX slide on geopolitical tension; zloty up on possible political shift

Key takeaways from the IMF-World Bank meetings

African ambassador criticizes IMF, World Bank for not giving enough loans

World Bank, multilateral development banks jointly seek to boost lending power

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Stocks, currencies slide as China data, rate concerns weigh

China’s exports and imports drop again in September

Nigeria central bank to intervene in forex market, lifts forex ban on 43 items

U.S. consumer prices rose 0.4% in September, more than expected

South African business confidence index dips in September

South Africa central bank head: govt needs to rebuild fiscal buffers to disinflate

South Africa offers to help mediate in Israeli-Palestinian conflict

Global economic losses from extreme weather could hit $5 trln -Lloyd’s

China stimulus hopes, dovish Fed tone lead EM assets to two-week high

News Tips

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