By Malvika Gurung
Investing.com -- Investors globally awaited the US CPI inflation data this week, which jumped to a 40-year high at 9.1% in June 2022, a reading higher than estimated, raising expectations of a more aggressive interest rate hike by the Federal Reserve to even 100 basis points, for taming the scorching inflation.
Here are some key highlights of developments encompassing the economy and financial markets of revered emerging nations - India, China and Russia.
India
- The country’s retail inflation, as measured by CPI stood at 7.01% on an annual basis in June 2022, easing marginally from 7.04% recorded in May, due to recent cuts in excise duty on petrol and diesel, along with restrictions imposed on food exports.
- Despite a lower CPI inflation print, the June figure continued to breach the central bank RBI’s tolerance band of 2-6% for the sixth consecutive month and above 7% for the third.
- The Indian rupee has depreciated to fresh lifetime lows every day in the ongoing week, collapsing to 79.91 against the US dollar on Thursday, only points away from hitting the key psychological level of 80/$1. The local unit has fallen to record lows 26 times against the greenback so far this year.
- India's industrial production jumped 19.6% in May 2022, compared to a 7.1% uptick in April, on the back of a significant rise in manufacturing and electricity segments, and a modest gain posted by the mining sector.
- To promote the growth of global trade with emphasis on exports, RBI unveiled a rupee settlement system for international trade, in efforts to keep the domestic currency stable.
Russia
- After imposing multiple sanctions on Russia to cripple its economy, the US and its European allies are now drafting new measures to ‘starve the Russian war machine’ and keep a check on oil and gasoline prices from running high.
- The European allies plan to cut their dependence on Russian oil by the end of this year, reports stated.
- In their first direct talks since March, Russia and Ukraine have made considerable progress in a high-stakes meeting held in Istanbul, for resuming the exports of Ukrainian grain blocked by Russia from the Black Sea ports. The deal will be signed off next week.
- The Central Bank of Russia has opposed the Russian finance ministry’s idea of supporting the development of domestic stablecoins, pointing out their highly risky nature and terming them unfit for payments.
- Russia is eyeing to bolster its trade connectivity access to the Middle-east and South Asia, and Iran is allowing this feat. Last week, the Russian Economic Development Minister and Iranian Central Bank Governor met with each other to smoothen developments on the same.
China
- Shifting its focus from debt control to supporting the pandemic-rampant economy, China is making (government-led) funds worth $1.1 trillion available for infrastructure spending. This will likely push infrastructure investment by 7.7% in 2022, compared to last year.
- According to central bank officials, China will step up policy support for its economy with the overall debt level expected to rise amid efforts to revive the slowing economy.
- Chinese financial markets are factoring in cues of another phase of Covid-19 curbs, which could add more pressure on the economy.
- China’s government continues to bet on a stronger second half of the year for the economy to meet its growth target of around 5.5%, stated reports.
- The British lender Barclays (LON:BARC) attempts to expand its footprint in the Chinese markets, seeking a banking partner to set up an asset management JV in the country.