Russian central bank hikes key interest rate******
A woman walks past a board showing currency exchange rates of the US dollar and the euro against Russian ruble in Moscow.
Russia's central bank more than doubled its key policy rate yesterday and unveiled some capital controls as it scrambled to shield the economy from unprecedented Western sanctions that sent the rouble tumbling to record lows.
The main interest rate will rise to 20 percent, its highest this century, from 9.5 percent to counter the risks of the rouble's rapid depreciation and higher inflation, which threaten Russians' savings.
"External conditions for the Russian economy have drastically changed," the central bank said, adding that the hike "will ensure a rise in deposit rates to levels needed to compensate for the increased depreciation and inflation risk.
The monetary authority also ordered companies to sell 80 percent of their foreign currency revenues, increased the range of securities that can be used as collateral to get loans and temporarily banned Russian brokers from selling securities held by foreigners. It did not specify which securities the ban applies to.
The emergency measures put the central bank on the frontline of defending Russia against a campaign by Western allies to isolate it economically.
The central bank has itself been targeted, with the West seeking to restrict its ability to deploy US$640 billion of forex and gold reserves and cut Russia's major banks off the SWIFT financial network, making it hard for lenders and companies to make and receive payments.
The rouble plunged nearly 30 percent to an all-time low versus the US dollar yesterday. The stock market and derivatives market remained closed.
Yesterday's steps by the central bank bolster other measures announced on Sunday, including an assurance that the bank would resume buying gold on the domestic market. It will also launch a repurchase auction with no limits and ease restrictions on banks' open foreign currency positions.
Finance Minister Anton Siluanov said that the government was ready to strengthen commercial banks' capital base if required.
Russians queued outside ATMs on Sunday, worried the sanctions could trigger cash shortages and disrupt normal life.
Economic Watch: China increases energy supply, calming stagflation concerns******
BEIJING, Nov. 16 (Xinhua) -- China has ramped up energy production and reined in prices to secure sufficient energy for factories and support the economy, assuaging concerns over stagflation.
Energy prices have surged globally since the start of this year amid a supply crunch. In China, energy strains caused power outages in September, hitting families in certain regions and forcing some factories to halt production.
"China has worked to boost coal production and bring coal prices back to a reasonable range," Meng Wei, spokesperson for the National Development and Reform Commission, told a regular press conference Tuesday.
HIGHER OUTPUT, LOWER PRICES
China's coal output grew 4 percent year on year to 360 million tonnes in October, and coal production is maintaining steady growth this month, showed data from the National Bureau of Statistics (NBS).
The coal stockpiles of the country's power producers rebounded, with power plants nationwide reporting a total of 129 million tonnes of coal in their inventories on Nov. 14, sufficient for 22 days of consumption. This is nine days more than the level at the end of September.
Increased coal output and inventories at power plants helped drive down the once-soaring coal prices, with coal futures on the Zhengzhou Commodity Exchange diving nearly 60 percent from their peak within a month.
Apart from coal, China also cranked up the production of natural gas to ensure adequate supplies. Since Nov. 7, China's daily supply of natural gas has reached more than 1 billion cubic meters, about 100 million cubic meters more than the same period last year.
"Gas companies must enhance production to increase domestic supplies," Meng said.
EASING STAGFLATION CONCERNS
A surge in commodity prices once raised concerns of stagflation in the world's second-biggest economy, an economic phenomenon in which prices rise yet business activity stagnates. Stagflation leads to high unemployment and reduced consumer spending power. The once-soaring energy prices increased production costs to companies and exacerbated stagflation concerns.
There seemed to be some signs of stagflation due to the pandemic, natural disasters, international commodity price hikes, and tightening supplies of raw materials. These were "caused by short-term factors, and the situation will be temporary," said NBS spokesperson Fu Linghui.
The country's economy has maintained sound recovery, according to NBS data on Monday, with retail sales and factory output beating expectations and the unemployment rate remaining low in October.
China's value-added industrial output increased 3.5 percent year on year in October, compared with 3.1 percent in September. Retail sales of consumer goods increased 4.9 percent year on year last month, 0.5 percentage points higher than a month earlier. The surveyed urban unemployment rate stood at 4.9 percent in October, 0.4 percentage points lower than in the same period last year.
UBS analyst Wang Tao echoed Fu's view, dismissing risks of stagflation, partly because the energy crunch has eased.
"We expect the producer price index to wane next year as energy shortages get addressed, and the whole year's consumer price index to hit 2 percent, so the country will be unlikely to go through stagflation," Wang noted. Enditem