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February
Australia C.bank Signals More Tightening Ahead After Lifting Rates to Decade-High
Written by Nur Yasmin
Australia's central bank raised its cash rate 25 basis points to a decade-high of 3.35% on Tuesday and reiterated that further increases would be needed, a more hawkish policy tilt than many had expected.
Wrapping up its February policy meeting, the Reserve Bank of Australia (RBA) also dropped previous guidance that it was not on a pre-set path and forecast inflation would only return to the top of its target range of 2-3% by mid-2025.
"The Board expects that further increases in interest rates will be needed over the months ahead to ensure that inflation returns to target and that this period of high inflation is only temporary," governor Philip Lowe said in a statement.
Markets were surprised by the hawkish tone of the RBA which shattered any expectations of an imminent pause to the tightening campaign. Futures market has priced in a peak rate of 3.9%, implying at least two more rate hikes in March and April, compared with 3.75% before the decision.
The local dollar shot up to $0.6940, extending earlier gains. Three-year government bond yields jumped 15 bps to 3.254% while ten-year yields also surged 15 bps to 3.615%.
"The surprise was not in the decision, but rather the shift in tone and forward guidance in the Governor's Statement," said Gareth Aird, head of Australian economics at CBA, as he updated his call for rates to peak at 3.85% after the decision, compared with 3.35% previously.
"This change implies that the RBA Board has essentially made up their mind and intend to raise the cash rate further over coming months, if the economic data prints in line with their updated forecasts."
Markets had expected a quarter-point move, with some risk of a bigger rise given recent inflation data had surprised on the high side. This was the ninth hike since last May, lifting rates by a total of 325 basis points.
Lowe said that core inflation had been higher than expected, with the trimmed mean gauge accelerating to 6.9% last quarter from a year ago, above the central bank's previous forecast of 6.5%.
HIGH INFLATION 'VERY COSTLY'
Inflation is expected to decline to 4.75% this year and only slow to around 3% by mid-2025, according to the RBA's latest forecasts.
The RBA also expects economic growth to average around 1.5% over 2023 and 2024.
The interest rate increases so far - including Tuesday's move - will add over A$900 a month in repayments to the average A$500,000 mortgage, according to RateCity, a deadweight for a population that holds A$2 trillion ($1.3 trillion) in home loans.
Housing prices fell for the ninth straight month in January, with prices in Sydney and Melbourne down about 10% from a year ago.
There are signs that consumers are finally pulling back on spending as cost of living surges and rate increases bite. Australian retail sales recorded the biggest drop in more than two years in December.
The next big test is the December quarter wage growth report later this month, which analysts expect to be robust given the labour market is at its strongest in nearly 50 years.
"High inflation makes life difficult for people and damages the functioning of the economy. And if high inflation were to become entrenched in people's expectations, it would be very costly to reduce later," warned Lowe as he signalled the bank's intention to extend the tightening cycle. (reuters)
February
South Korea Court Orders First Compensation for Vietnam War Victim
Written by Nur Yasmin
A South Korean court ordered the government on Tuesday to compensate a Vietnamese victim of atrocities during the Vietnam War in the 1970s, when about 300,000 South Korean troops fought alongside U.S. forces.
The ruling marked the first legal acknowledgement of South Korea's liability for atrocities during the war and could potentially pave the way for other victims to seek compensation.
The Seoul Central District Court ordered the government to provide around 30 million won ($23,800) in compensation and additional funds for delay to Nguyen Thi Thanh, a survivor of killings of civilians by South Korean troops.
Nguyen, 63, filed a suit against the South Korean government in 2020 seeking about 30 million won in compensation, saying she lost her family members and suffered wounds herself when South Korean marines killed about 70 civilians in her hometown in Vietnam's central province of Quang Nam in 1968.
"At the time, the soldiers forced the plaintiff's family to come out of their house, threatening with live ammunition and guns, before shooting them," the verdict said, according to Yonhap news agency.
"As a result, it is acknowledged that the plaintiff's family died at the scene and the plaintiff and others suffered serious injuries."
A court official confirmed the decision but said the full verdict was not immediately available for release.
Nguyen, in a video call from Vietnam arranged by her attorneys after the ruling, welcomed the decision and said it would be a "comfort for the souls who fell victim to the incident."
Seoul's defence ministry did not immediately comment. The foreign ministry said the two countries have been in close consultations over pending issues for "future-oriented" advancement of diplomatic ties, which were formally established in 1992.
"Korea and Vietnam have achieved unprecedented development of relations over the past 30 years based on the principle of 'Let's leave the past unfortunate events behind and move toward the future,'" it said in a statement.
Hanoi's foreign ministry did not immediately respond to a request for comment. (Reuters)
February
Turkey Quake Kills 912 in Historic Disaster, Erdogan Says
Written by Nur Yasmin
At least 912 people were killed and more than 5,000 injured when a magnitude-7.8 earthquake struck southern Turkey overnight, President Tayyip Erdogan said on Monday, calling it a historic disaster for which the death toll is likely to rise.
The quake was centred on the province of Kahramanmaras and shook southern Turkey and northern Syria overnight. It was followed by another powerful tremor with a 7.7 magnitude in the same region at around 1025 GMT.
Erdogan said 2,818 buildings collapsed after the first tremor, describing it as the country's "largest disaster" since 1939, when a major quake struck the eastern province of Erzincan.
In 1999, a tremor of similar magnitude devastated Izmit and the heavily populated eastern Marmara Sea region near Istanbul, killing more than 17,000.
"Everyone is putting their heart and soul into efforts, although the winter season, cold weather and the earthquake happening during the night make things more difficult," he told reporters in a news conference at Turkey's disaster coordination centre in Ankara.
"We do not know how high the casualty numbers will go as efforts to lift the debris continue in several buildings in the earthquake zone," he said.
Some 9,000 personnel were taking part in the rescue operations, he said. Offers off assistance have been made by NATO, the European Union and 45 countries, he added.
Erdogan said 5,385 people had been injured in the quake as rescue operations continued, with 2,470 people rescued from the ruins of buildings.
"Today is a day for 85 million to be together as one heart," he said. (Reuters)
February
Earthquake Piles Misery On War-Ravaged Syrians in Wintry North
Written by Nur Yasmin
Wailing children, flattened buildings and hospitals full of bodies - a devastating earthquake on Monday looked painfully familiar for Syrian families and rescuers worn down by nearly 12 years of bombardment and displacement.
The 7.8 magnitude earthquake sent people rushing into the streets in the country's north, where air strikes and shelling have already traumatised the population and weakened the foundations of many buildings.
In the rebel-held town of Jandaris in Aleppo province, a mound of concrete, steel rods and bundles of clothes lay where a multi-storey building once stood.
"There were 12 families under there. Not a single one came out. Not one," said a thin young man, his eyes wide open in shock and his hand bandaged.
"We were pulling people out ourselves at three in the morning," he said, his breath visible in the cold winter air as he spoke.
Young men could be seen clawing through debris and heaving hammers onto slabs of concrete to look for survivors. Dented water tanks and solar panels had flown off roofs and landed on the damp ground.
The White Helmets, a rescue service founded in rebel-held territory to treat people hurt in bombardment, said at least 147 people were killed in opposition-held northwest Syria. In government-held territory, officials put the death toll at more than 300 with more than 1,000 injured.
In Turkey, President Tayyip Erdogan said more than 900 people were killed and more than 5,000 injured.
"We are in a race against time to save the lives of those under the rubble. Even if our teams are exhausted, we don't have time to rest," White Helmets head Raed al-Saleh told Reuters by phone.
He said air strikes over the years had left buildings structurally fragile so they "immediately collapsed", ultimately leading to more deaths.
FREEZING TEMPERATURES
Millions of people in northwest Syria have been left vulnerable by the conflict, according to the United Nations, which says 2.9 million people in the region have been displaced and 1.8 million are living in camps.
The rescue teams have worked for years rescuing people from shelling and aerial raids by Syrian government or Russian forces which often hit the same location multiple times, risking paramedics' lives.
"At least now, no one is going to bomb us as we work," Saleh said.
But the cold winter weather added another challenge for the rescue workers, who said families have been left exposed in near-freezing temperatures and heavy rains.
In the countryside of Idlib province, the earthquake damaged the modest structures set up in displacement camps hosting Syrians who had fled the war over the years, said Ahmad al-Sheikh, a resident of a nearby border town.
Further west, the main hospital in the rebel-held town of Afrin was teeming with wounded residents writhing on the ground and women struggling to reach loved ones by phone as the lines were down.
Medics zipped up black body bags on a bloodstained floor as toddlers screamed in the background.
"Ambulance sirens are heard everywhere. People are shocked," said Afrin resident Ibrahim Obaid. "The situation is so tragic. There's so much fear and we still feel the tremors." (Reuters)
February
Turkey's President Erdogan says Western missions will 'pay' for closures
Written by Nur Yasmin
Turkish President Tayyip Erdogan said Western missions would "pay" for issuing security warnings and temporarily closing consulates in Turkey last week, while police said there was no serious threat to foreigners after detaining 15 Islamic State suspects on Sunday.
Ankara summoned the ambassadors of nine countries on Thursday to criticise their decisions to temporarily shut diplomatic missions and issue security alerts. Turkish officials said the following day that Western nations, including the United States and Germany, had not shared information to back up their claims of a security threat.
"The other day our foreign ministry summoned all of them and gave the necessary ultimatum, told them 'You will pay for this heavily if you keep this up,'" Erdogan said during a meeting with youth that was pre-recorded and broadcast on Sunday.
Alongside the closures, several Western states warned citizens of a heightened risk of attacks to diplomatic missions and non-Muslim places of worship in Turkey, following a series of far-right protests in Europe in recent weeks that included several incidents of burning copies of the Muslim holy book, the Koran.
Turkey suspended negotiations for Sweden and Finland's NATO accession last month following a protest in Stockholm during which a copy of the Koran was burned.
Erdogan said that the Western states were "playing for (more) time" and that the "necessary decisions" would be taken during Monday's cabinet meeting, without elaborating.
'NO CONCRETE THREATS'
Earlier on Sunday, police said they had not found evidence of any concrete threat to foreigners in the detentions of 15 Islamic State suspects accused of targeting consulates and non-Muslim houses of worship, state media reported.
Anadolu Agency cited an Istanbul police statement saying the suspects had "received instructions for acts targeting consulates of Sweden and the Netherlands, as well as Christian and Jewish places of worship".
While the suspects' ties to the jihadist group were confirmed, no concrete threats toward foreigners were found, the statement said.
Foreign Minister Mevlut Cavusoglu repeated on Saturday Turkey's frustration with what it says is Sweden's inaction toward entities that Ankara accuses of terrorist activity. All 30 NATO members must ratify newcomers.
Turkey, Sweden and Finland signed an agreement in June aimed at overcoming Ankara's objections to their NATO bids, with the Nordic states pledging to take a harder line primarily against local members of the banned Kurdistan Workers Party (PKK), which took up arms against the Turkish state in 1984. (Reuters)
February
Australia Retail Sales Volumes Dip in Q4, Price Growth Slows
Written by Nur Yasmin
Australian retail sales volumes fell for the first time in a year last quarter as shoppers trimmed spending on goods, a sign higher borrowing costs are finally working to curb spending.
Data from the Australian Bureau of Statistics on Monday showed real retail sales dipped 0.2% in the December quarter to A$96.9 billion ($66.99 billion). That was still better than market forecasts of a 0.6% fall and will make a slight drag on economic growth.
The report also showed growth in retail prices was the slowest all year in the quarter, which might reassure the Reserve Bank of Australia (RBA) that its aggressive policy tightening is starting to cool demand, albeit slowly.
The central bank meets on Tuesday as is widely expected to hike rates by a quarter point to 3.35%. (Reuters)
February
South Korea, Australia Central Banks Renew Currency Swap Agreement
Written by Nur Yasmin
South Korea's central bank said it renewed on Monday a currency swap agreement with its Australian counterpart, valued at 9.6 trillion won or A$12 billion, for five years until early 2028.
The agreement, first signed in 2014, allows either party to exchange funds in own currency for the other currency under pre-set terms.
The Bank of Korea and the Reserve Bank of Australia have since renewed the agreement several times. (Reuters)
February
North Korea Ruling Party Meeting to Address 'Urgent' Agricultural Needs
Written by Nur Yasmin
Leading members of North Korea's ruling party will meet this month to discuss the "urgent" task of improving the country's agricultural sector, as international experts say food insecurity has worsened amid sanctions and COVID-19 lockdowns.
State news agency KCNA reported that the Workers' Party of Korea (WPK) politburo decided on Sunday that a larger plenary meeting of the Central Committee will gather in late February.
"It is a very important and urgent task to establish the correct strategy for the development of agriculture and take relevant measures for the immediate farming in the present stage of the struggle to promote the overall development of socialist construction," the report said.
The politburo recognised that "a turning point is needed to dynamically promote the radical change in agricultural development," KCNA said.
Last month the U.S.-based 38 North programme, which monitors North Korea, said in a report that "food availability has likely fallen below the bare minimum with regard to human needs," with food insecurity at its worst since the famines of the 1990s.
"Resolving North Korea’s chronic food insecurity would require, among other things, strengthening property rights, opening and revitalising the industrial and service sectors of the economy, and embracing an export-oriented model," the 38 North report said. "The regime, which fears internal competition and its own demise, has so far proved itself unwilling to pursue such reforms."
North Korea is under strict international sanctions over its nuclear weapons and ballistic missile programmes. Border trade has further been choked off by self-imposed lockdowns aimed at preventing COVID-19 outbreaks.
Those lockdowns have partially eased in recent months, with some trade resuming between North Korea and Russia and China, though at still limited levels.
The country is also routinely struck by natural disasters such as floods and heavy rains that damage summer crops. (Reuters)
February
Australia PM Pushes for Bipartisan Support on Indigenous Referendum
Written by Nur Yasmin
Australian Prime Minister Anthony Albanese will push for bipartisan support on a referendum that aims to set up an Indigenous consultative committee in parliament, when it meets on Monday for the first time this year.
The landmark referendum, to be held later this year, will establish an Indigenous "Voice", that can make representations to parliament on policies affecting them.
If passed, that would add language to its constitution - which cannot be amended without a referendum - to recognise Australia's Indigenous citizens for the first time.
A poll by The Australian newspaper released on Monday showed 56% of voters supported the change in the constitution, with 37% opposing it.
Australia is seeking to give more recognition to its Aboriginal people, who have inhabited the land for 60,000 years but track well below national averages on most socio-economic measures.
"I believe very firmly that Australians should take the opportunity that they'll have in the second half of this year to cast a vote for yes, to cast a vote to walk upon the path of reconciliation," Albanese told reporters in Canberra.
"It might just make some people's lives, some of the most disadvantaged people in our country, their lives better."
Albanese, who has staked much of his political capital on the referendum in a country that has only passed eight of them since becoming an independent nation, said he wanted to get "as much agreement as possible".
"This should be above politics," he said, adding he hoped to introduce the legislation in the current term of the parliament.
The federal opposition Liberal Party has not yet backed the referendum but a group, which includes some prominent Indigenous Australians and lawmakers, have launched a campaign against it.
They say it will not resolve the issues affecting the country's roughly one million Indigenous citizens.
Opposition is also forming among progressives. A Greens party senator quit the party and moved to the crossbench on Monday because of concerns about to the Voice proposal. She first wants a treaty between the government and indigenous people, similar to what exists in New Zealand and Canada.
"Greens MPs, members and supporters have told me they want to support the Voice. This is at odds with the community of activists that are saying treaty before voice," said Senator Lidia Thorpe at a news conference on Monday.
Her exit complicates the passage of legislation through the senate, where the government is in minority. A combination of independent crossbench members and the Greens are needed to pass non-bipartisan legislation. (Reuters)
February
Vietnam Seizes 600 kg of Ivory Smuggled from Africa
Written by Nur Yasmin
Vietnamese authorities have over the past week seized more than 600 kilograms of ivory smuggled from Africa, the government said on Monday.
Trade in ivory is illegal in Vietnam but wildlife trafficking remains widespread. Other items often found smuggled into the country include pangolin scales, rhino horns and tiger carcasses.
Customs authorities in the northern port city of Haiphong on Monday found nearly 130 kilograms of ivory hidden in a container of cow horns originated from Africa, the government said in a statement.
This followed the finding of nearly 500 kilograms of African ivory on Thursday last week at Lach Huyen Port in the city, the government said.
This has been the largest seizure of smuggled ivory in the country in more than four years. The authorities had in October 2018 seized more than eight tonnes of ivory and pangolin scales in one of the country's largest wildlife trafficking cases for years. (Reuters)