The Bank of Russia unexpectedly maintained its key interest rate at a record-high 21% , defying analysts’ expectations of another significant hike as inflation remains stubbornly elevated. The decision marks a shift toward a more measured approach in balancing economic growth and price stability. Key Details Inflation Concerns: Annual inflation climbed to 8.9% in November, well above the central bank’s 4% target , with inflation expectations reaching 13.9% in December. Policy Rationale: The central bank cited the significant tightening of monetary conditions after October’s 200-basis point hike as sufficient to resume disinflationary processes. Governor Elvira Nabiullina emphasized avoiding both economic overheating and severe slowdowns. Economic Overheating: Elevated government spending on the war in Ukraine and social programs, coupled with labor shortages and rising wages, have fueled strong domestic demand, exacerbating price pressures...
China is conducting military exercises in the South China Sea on the same day that the US and its allies, including Australia, Japan, New Zealand, and the Philippines, are undertaking joint drills in the region. The People’s Liberation Army Southern Theater Command announced the exercises on WeChat, stating that naval and air forces would participate in reconnaissance, early warning drills, and sea and air patrols near Huangyan Island, also known as Scarborough Shoal, which is claimed by both China and the Philippines.
The joint exercises by the US and its allies are taking place in the Philippines' exclusive economic zone in the South China Sea. Tensions between Beijing and Manila have been escalating due to competing sovereignty claims. In 2016, a UN tribunal rejected China’s claims over large areas of the South China Sea in favor of the Philippines, a ruling that Beijing does not recognize.
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