Foreign Minister AK Abdul Momen briefed reporters on the outcome of the meeting between Prime Minister Sheikh Hasina and South African President Matamela Cyril Ramaphosa at the Bilateral Meeting Room of Palais de Nations in Geneva. He revealed that BRICS Bank had extended an invitation to Bangladesh as a guest.
FM Momen disclosed that there are plans for BRICS to invite Bangladesh to join as a member in the future. The upcoming BRICS conference, scheduled to be held in August in South Africa, will be attended by Prime Minister Sheikh Hasina.
Currently consisting of Brazil, India, China, South Africa, and Russia, BRICS intends to expand its membership by adding eight more countries. Bangladesh, Saudi Arabia, the United Arab Emirates, and Indonesia have received invitations to join. FM Momen highlighted that this development presents a new avenue for financing, which would greatly benefit Bangladesh’s financial needs.
During the meeting, Prime Minister Sheikh Hasina requested South Africa to establish a mission in Bangladesh to bolster bilateral cooperation. Additionally, the President of Malta, Dr. George Vella, also held discussions with the Prime Minister at the same venue, where Sheikh Hasina requested Malta to open a mission in Dhaka and expressed interest in exporting readymade garments (RMG) products and pharmaceutical items.
Furthermore, the International Labour Organization (ILO) Director-General, Gilbert F Hounbo, met with Prime Minister Sheikh Hasina at the same location. Foreign Secretary Masud Bin Momen, Labour and Employment Secretary Md Ehsan-E-Elahi, and PM’s speechwriter M Nazrul Islam were present during these meetings.
Turkey’s Central Bank Set to Raise Interest Rates Amidst Policy Reversal
Turkey’s central bank is anticipated to implement a significant increase in its key interest rate for the second consecutive month, signaling a shift towards conventional economic policies by President Recep Tayyip Erdogan. This reversal in policy direction followed Erdogan’s challenging re-election in May and the country’s severe economic crisis, largely attributed to his unconventional belief that high interest rates fuel inflation.
Erdogan’s previous stance, advocating low-interest rates to spur economic growth, has been abandoned in favor of the advice from his new economic team comprising former Wall Street executives and respected technocrats, who have emphasized the necessity of substantially raising interest rates to avert a systemic crisis. The policy rate has already surged from 8.5 percent during Erdogan’s re-election to 25 percent last month, and another substantial increase is expected. Despite these changes, concerns linger as interest rates still remain considerably below the level required to combat rising consumer prices, potentially causing an overheating economy.
In a brighter outlook for Turkey, Fitch Ratings has upgraded the country’s outlook from “negative” to “stable” due to the recent policy shift, though it cautioned about uncertainty surrounding the effectiveness and duration of the inflation-control measures, partly influenced by political considerations. Finance Minister Mehmet Simsek, credited with influencing Erdogan’s change in approach, anticipates keeping interest rates elevated until the middle of the next year.
However, a significant challenge lies in unwinding the costly bank deposit support scheme, which compensates for the depreciation of the Turkish lira against foreign currencies. Scaling back this system cautiously is essential, as abrupt changes could prompt depositors to flock to the US dollar and further depreciate the lira. Emerging markets economist Timothy Ash suggests that significantly higher policy rates, ideally positive in real terms, may be a solution, potentially requiring external support such as an IMF program. Nevertheless, Erdogan has consistently rejected seeking assistance from the International Monetary Fund.
Norway’s Innovative Solar Panel Project Lights Up Arctic Darkness
Norway has initiated a groundbreaking project to install solar panels in its Svalbard archipelago, a region characterized by round-the-clock darkness throughout the winter season. This pilot project aims to facilitate the transition to green energy for remote Arctic communities.
Positioned neatly in six rows within a field, a total of 360 solar panels will begin generating electricity for the Isfjord Radio, a former shipping radio station converted into a base camp for tourists. The Svalbard archipelago, also known as Spitsbergen, is situated approximately 1,300 kilometers (800 miles) from the North Pole and is accessible primarily by boat or helicopter, weather permitting.
Mons Ole Sellevold, a renewable energies technical adviser at the state-owned energy group Store Norske, described this project as what they believe to be the world’s northernmost ground-mounted photovoltaic (PV) system. It is the first instance of deploying solar panels at this scale in the Arctic. Another 100 solar panels have been placed on the radio station’s roof, aiming to fulfill around half of the station’s electricity requirements while reducing its CO2 emissions.
During the summer, the region experiences abundant sunlight, featuring a “midnight sun” that never sets. Solar panels in the Arctic also benefit from the “albedo” effect, where snow and ice reflect sunlight, as well as low temperatures that enhance their efficiency. In contrast, the region is immersed in complete darkness from early October until mid-February during the winter, making it impractical to entirely eliminate fossil fuels at Isfjord Radio.
Store Norske is exploring additional alternatives, including wind farms, to further the station’s transition to green energy. This initiative is driven by environmental concerns and economic factors, given the cost and logistical challenges of diesel usage in the remote region. Solar panels are cost-effective, require minimal maintenance, and have long lifespans.
Moreover, this installation serves as a pilot project to evaluate whether this technology can be adopted by approximately 1,500 other Arctic sites or communities lacking access to traditional electricity grids. These regions also require a transition to sustainable energy sources.
The overarching goal is to establish Isfjord Radio as a testing ground to develop Arctic-proven technology that can subsequently be applied in similar locations. The Arctic has experienced nearly four times the rate of warming compared to the rest of the world over the past four decades, leading to accelerated ice melting and ecosystem disruptions. This initiative seeks to address environmental challenges while providing a model for sustainable energy in remote Arctic communities.
US Federal Reserve Set to Maintain Interest Rates Amid Economic Data Variability
The US Federal Reserve is widely anticipated to maintain interest rates at their current levels this week amid a period of mixed economic data. Despite grappling with persistent inflation exceeding its target of two percent, the Fed has already raised interest rates 11 times in the past 18 months. The recent uptick in inflation due to rising energy costs has put additional pressure on the central bank. However, analysts and traders expect the Fed to refrain from further rate hikes in September, allowing policymakers to better assess the nation’s economic health.
EY Chief Economist Gregory Daco stated, “We think the Fed is done with its tightening cycle,” a view that has remained consistent over recent months. Deutsche Bank economists concur, noting that they expect the Fed to hold rates steady following strong signals ahead of the meeting.
The Federal Open Market Committee (FOMC) faces a delicate balancing act as it seeks to control inflation through interest rate increases while avoiding an economic downturn—a challenging task known as achieving a “soft landing.” Recent economic indicators suggest this may be feasible, with robust first-half economic growth, declining inflation, and a somewhat softened job market.
Goldman Sachs analysts lowered their US recession probability forecast from 20 percent to 15 percent, and many economists, including those within the Fed, no longer anticipate a recession. Some FOMC members, like Fed Chair Jerome Powell, believe there is a unique opportunity for the Fed to achieve a soft landing in the coming months, contingent on data vigilance.
Chicago Fed President Austan Goolsbee mentioned a “golden path opportunity,” acknowledging growing market confidence in the Fed’s ability to pull off this feat while staying responsive to data. Conversely, Fed governor Michelle Bowman has suggested that additional rate hikes may be necessary to reach the two percent inflation target.
While a September pause is widely expected, the consensus regarding a November rate hike is less clear. Traders currently assign a probability of slightly over 65 percent that the Fed will keep rates steady in November. Regardless of the ultimate decision, the Fed’s indication of another hike this year could serve as a useful signal to the markets, preventing expectations of an imminent end to the tightening cycle.
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