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Bank of Korea raises interest rates by 25 basis points on November 24 as growth slows – Reuters poll by Reuters

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© Reuters. FILE PHOTO: The Bank of Korea logo is seen in Seoul, South Korea, November 30, 2017. REUTERS/Kim Hong-ji

By Devayani Sathyan and Anant Chandak

BENGALURU (Reuters) – South Korea’s central bank will ease its hawkishness on Thursday and raise interest rates by 25 basis points, a Reuters poll showed, amid signs of slowing domestic growth despite rising inflation and US Federal Reserve activity.

South Korea’s economic growth was rapidly losing momentum in the latest metric as rising living costs eroded household income and slumped demand, putting pressure on the Bank of Korea (BoK) to balance inflation and growth.

However, with inflation well above the central bank’s 2% target of 5.7% in October, along with aggressive tightening from the Fed, the Bank of Korea still has more to do before it pauses.

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All but one of the 30 economists in the Nov. 15-21 poll expected the BoK to raise its policy rate by 25 basis points, to 3.25%, on Thursday. One expected a 50 basis point rally.

If the majority view prevails, the Bank of Korea will raise interest rates to the highest level since 2012.

“The combination of inflation still high, and a hawkish US Federal Reserve means that the central bank’s rate hike cycle has extra room to run,” said Crystal Tan, an economist at ANZ.

“Amid growing concerns about growth and the credit market, the hiking case has been further strengthened at a more gradual pace.”

Nearly 60% of respondents, 17 out of 30, expected another 25 basis point hike by the end of March, which would push interest rates up to 3.50%. Eleven expected rate is expected to rise to 3.75% by then. The remaining two expected no change from 3.25%.

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The median forecast showed that the base rate will remain at 3.50% until the end of 2023. If this materializes, the BoK will be one of the first Asian central banks to end the policy tightening cycle.

Derek Kamm, Asian economist Morgan Stanley (NYSE:).

“The risk to our call veers into a more prolonged walking cycle. This will be the case if global commodity prices rise due to geopolitical and/or supply concerns, or if market expectations of Fed tightening take another hawkish tilt and lead to another bout of weakness in the Fed.” KRW”.

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Argentina urges the European Union to renegotiate a South American trade agreement

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Argentina’s President Alberto Fernandez has called on the European Union to renegotiate a landmark trade deal with South America, saying the agreement is unbalanced and a threat to the auto industries of Brazil and Argentina.

Fernandez told Financial Times’s Global Boardroom Conference.

Asked how long this process might take, he said, “As long as the parties want to. It’s like tango. The tango is danced by a couple, you need both of them to want to tango, otherwise it’s very difficult.”

The trade deal between the EU and the Mercosur bloc – Argentina, Brazil, Paraguay and Uruguay – was agreed in principle in 2019 after nearly two decades of haggling. But its conclusion has been shelved amid European objections to Brazil’s poor record of preserving the Amazon rainforest under far-right President Jair Bolsonaro.

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The election in October of Luiz Inacio Lula da Silva, who has pledged to preserve the Amazon, to succeed Bolsonaro, raising hopes that a long-awaited deal between the EU and Mercosur might gain final approval. Spain’s trade minister, Xiana Mendez, told the Financial Times last month that she believed he would support the agreement. “It’s very balanced,” she said. We do not support reopening negotiations.

But Fernandez told the Financial Times conference that the environment “isn’t why we don’t get the agreement, it’s an excuse”.

The real reason is that for Brazil and Argentina [as] Car producers, the only car producers in South America, this agreement is problematic because it makes things difficult for us if European competition reaches South America,” he said.

At the same time, he added, South American countries faced a “burden of hurdles” in selling their agricultural exports to Europe, with countries such as France, Ireland and Poland opposing ending agricultural subsidies and allowing competition from Argentina.

“Neither I nor Lula are against the agreement with the European Union,” Fernandez said. You have to keep in mind what this agreement is, because this agreement has problems. . . related to market imbalances.

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While the debate over the long-stalled trade agreement with Europe continues, Argentina is striking deals with China, its second largest trading partner after Brazil. Beijing last month agreed to expand a swap facility with Argentina’s central bank to $25 billion, which helps boost the South American country’s meager foreign reserves.

China has also built a space monitoring station in the Patagonian province of Neuquen, which the Center for Strategic and International Studies in Washington says is Works with little Argentinian supervision It can be used to gather military intelligence.

Fernandez rejected the argument Argentina Need to choose between the United States and China, saying that he does not wish to recreate the Cold War era. “Argentina has to do what works best for Argentina,” he said. “The US is very concerned about what China might do in Latin America but China could do . . . just like the US could do in Latin America, they could come and invest.”

Argentina is building a naval base at Ushuaia in southern Patagonia to support ships patrolling the South Atlantic and Antarctica, but Fernandez called “fictional” news reports that China was involved. He said, “There is no such thing.” “In Argentina you cannot have Chinese, American or French military bases . . . because we are a sovereign country.”

The South American country faces dire economic challenges, with inflation approaching 100 percent annually, access to international financial markets largely cut off after a default in 2020, and exchange controls that have pushed dollars on the black market to nearly double the level. the official.

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Fernandez said the Argentine economy was “strange” because, despite high inflation and “unpayable” levels of debt, the country also had record levels of foreign investment and exports in the first half of the year, unemployment was low and consumption was increasing.

“If you cling to the image of an inflated Argentina . . . of an indebted Argentina, you will say Argentina is a mess,” Fernandez said. “But there is also all this data that points to sustainable growth and huge potential.”

He said the solution to the longstanding economic problems of this South American country is to add value to its goods. “Argentina must stop being an exporter of raw materials and become an industrialized country.”

Argentina holds presidential and congressional elections next October, and opinion polls show Fernandez’s Peronist party trailing the conservative opposition. The president has said in the past that he would like to run again but that his approval ratings are low, and he told the Financial Times conference that he was “totally immersed” in governance.

His powerful vice president, Cristina Fernandez de Kirchner, said on Tuesday she would not run again Convicted of corruptiona ruling against which she plans to appeal.

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“I’m not thinking of re-election, believe me,” said President Fernandez. I think how to solve all these problems[of the country]. . . I want to finish my tenure having seeded Argentina with opportunities for the person who will succeed me.”

Additional reporting by Andy Pounds in Brussels

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Renault says executive vice president Delpos has resigned, according to Reuters

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© Reuters. FILE PHOTO: A Renault logo is pictured in a shop in Vertou, near Nantes, France, January 17, 2022. REUTERS/Stephane Mahe/File Photo

PARIS (Reuters) – President of the French automaker Renault The company said on Wednesday that its new mobility unit Mobilize (EPA:) and group executive vice president Clotilde Delbos have both resigned.

Renault said Delpos would leave at the end of December, without giving a reason for her departure. The company said in a statement that Phaedra Ribeiro will be named CEO of Mobiliz while Patrick Claude, Group Chief Financial Services Officer, will take on the role of Delbus on a temporary basis at Renault Financial subsidiary RCI Banque.

Delbos joined Renault in 2012 as group controller and was a seasoned executive who helped transition between former boss Carlos Ghosn, who was arrested in Tokyo in 2018 on financial misconduct charges, and current CEO Luca de Meo, who took over in the summer of 2018. Past. 2020.

Delbos, who also served as Renault’s chief financial officer between 2016 and early 2022, pitched herself in to take over as CEO before the board decided to call the outsider de Meo.

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Renault is in the middle of a major and complex overhaul that will see it spin off its businesses into five companies, deepen ties with China’s Geely and spin off the electric car unit with a stock market listing next year.

Shares of the automaker briefly fell after Delbos’ departure was first reported by a Le Monde reporter on Twitter but then recovered to close a touch higher.

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The European Union is challenging China at the WTO over Lithuania’s trade embargo and technical patents

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The European Union has escalated two trade disputes with China by asking the World Trade Organization to convene commissions to rule on them, officials in Brussels said, the first cases the bloc has brought against Beijing for at least three years.

The first dispute concerns an alleged trade embargo on imports from Lithuania, due to a dispute On Vilnius’ relations with Taiwan. The second relates to the protection of high-tech patent holders in the European Union.

The move comes at a time of heightened tensions between China and the European Union under pressure from the United States To take a tougher stance in trade relations with Beijing.

Either way, the Chinese actions are hitting European companies hard. The European Commission said that canceling these measures is in the economic and strategic interest of the European Union.

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“China’s discriminatory measures against Lithuania affect intra-EU trade and supply chains within the EU and affect the functioning of the EU’s internal market, including through coercive market adjustments,” she added.

The A committee He said the measures reduced Lithuanian exports to China, which were worth 220 million euros a year before they were imposed, by 80 percent.

Since December 2021, China has implemented discriminatory and coercive measures against exports from Lithuania The commission added that it is against exports of EU products containing Lithuanian content. The dispute began after Vilnius allowed the opening of a representative office in Taiwan. Beijing considers Taiwan part of its territory and works against those who officially recognize its existence.

The commission said Chinese customs authorities had rejected Lithuanian imports and imposed a complete import ban on alcoholic beverages, beef, dairy products, logs and peat shipped from Lithuania. “When asked for further explanations, China failed to demonstrate that this ban was justified,” she said.

An EU official said the Chinese restrictions have had a “chilling effect”, preventing companies from using Lithuanian products in their supply chain.

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The patent case involves rulings known as “injunctions against claims” by China’s Supreme Court that prevent companies from protecting patents by securing licensing deals in foreign courts, even within the European Union.

“Chinese manufacturers have sought these injunctions against claims to pressure patent rights holders into giving them cheaper access to European technology,” the commission’s statement said.

The commission said earlier that companies including Sweden’s Ericsson, Finland’s Nokia and Japan’s Sharp lost billions of euros in revenue.

It added that breaches of the filing orders lead to fines of up to 130,000 euros per day.

The WTO’s dispute settlement body could set up the panel in December or January. The commission’s proceedings can last up to a year and a half, after which either party can appeal the ruling.

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EU officials said China has a good record of complying with WTO rulings.

Brussels is also close to approving a new anti-coercive law that would allow it to take unilateral measures without going to the World Trade Organization when it sees a trading partner trying to change behavior through unfair practices, such as in Lithuania’s case.

China’s foreign ministry said, “China follows the rules of the World Trade Organization. China’s so-called coercion on Lithuania is baseless and distorts the facts. I want to stress that the ins and outs of the fraught relations between China and Lithuania are very clear.”

Additional reporting by Mikey Deng in Beijing

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