Shares fall over fears of interest rate increases, China cuts LPR

IMF goes to Colombo for more economic solutions

The International Monetary Fund will visit Colombo this week to continue discussions with Sri Lankan authorities on economic and financial reforms and policies.

“The aim is to make progress towards reaching a staff-level agreement on a potential IMF Extended Fund Facility (EFF) arrangement in the near term,” the IMF said in a statement over the weekend.

“Because Sri Lanka’s public debt is assessed as unsustainable, approval by the IMF Executive Board of the EFF program will require adequate assurances from Sri Lanka̵[ads1]7;s creditors that debt sustainability will be restored.”

The IMF had already concluded a first round of discussions at the end of June when it was working on a macroeconomic and structural policy package with Colombo “to correct macroeconomic imbalances, restore sustainable public debt and realize Sri Lanka’s growth potential”.

Other challenges that need to be addressed include containing rising levels of inflation and addressing the severe pressure on the balance of payments.

The EEF is the IMF’s lending facility and helps countries deal with balance of payments or cash flow problems.

—Su-Lin Tan

China’s central bank cuts benchmark lending rates

The People’s Bank of China cut its one-year benchmark lending rate by 5 basis points and its five-year rate by 15 basis points, according to an online statement.

That brings the one-year prime rate to 3.65% and the five-year LPR to 4.3%.

Analysts polled by Reuters expected a 10 basis point cut to the one-year LPR, and half of respondents expected the five-year rate to be cut by 15 basis points.

— Abigail Of

CNBC Pro: How to reduce risk in your portfolio right now, according to the pros

Stocks have been volatile this year, as a mix of recession fears, inflationary pressures and other macro risks calm markets.

Here are three ways investors can adjust their portfolios to reduce risk or reduce losses, according to Goldman Sachs, Wells Fargo and others.

Pro subscribers can read more here.

— Weizhen Tan

CNBC Pro: JPMorgan predicts when rally in growth stocks will end

Investors have flocked to growth stocks of late, but as recession fears mount, market watchers are deciding whether to rotate to safer bets instead.

However, JPMorgan believes the rally still has further to go, citing several indicators to look for when considering a rotation out of growth stocks.

Professional subscribers can read the story here.

— Zavier Ong

What to expect from Powell’s Jackson Hole speech

Fed Chairman Jerome Powell is expected to speak at the central bank’s annual symposium in Jackson Hole, Wyoming this week and shed light on the pace of future rate hikes.

Powell may echo hawkish comments from Fed officials who recently stressed their commitment to fighting inflation, even as investors enjoyed a summer rally partly on expectations of a less aggressive Fed.

Still, St. Louis Fed President James Bullard said in an interview last week with the Wall Street Journal that he is considering another rate hike of 0.75 percentage points at the September meeting.

Check out CNBC Pro for more on what to expect from the Fed chair.

—Sarah Min

China is set to lower its benchmark lending rates, Reuters poll predicts

China is set to release its lending rates (LPR) on Monday, and analysts expected cuts, according to a Reuters poll.

The majority of analysts forecast the one-year benchmark lending rate to be reduced by 10 basis points, while they expected the five-year LPR to be reduced by more than 10 basis points.

Around half of the poll’s 30 participants predict a cut of 15 basis points, Reuters reported.

The one-year LPR is currently at 3.7% after a cut in January, and the five-year rate is at 4.45%. China cut the five-year LPR by 15 basis points in May, in a move said to support housing demand.

— Abigail Of

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