Conflict Wounds Russian and Ukrainian Currencies

FILE - A food delivery man leaves an exchange office with screen showing the currency exchange rates of US Dollar and Euro to Russian Rubles in Moscow, Russia, Feb. 24, 2022. (AP Photo, File)
FILE - A food delivery man leaves an exchange office with screen showing the currency exchange rates of US Dollar and Euro to Russian Rubles in Moscow, Russia, Feb. 24, 2022. (AP Photo, File)
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Conflict Wounds Russian and Ukrainian Currencies

FILE - A food delivery man leaves an exchange office with screen showing the currency exchange rates of US Dollar and Euro to Russian Rubles in Moscow, Russia, Feb. 24, 2022. (AP Photo, File)
FILE - A food delivery man leaves an exchange office with screen showing the currency exchange rates of US Dollar and Euro to Russian Rubles in Moscow, Russia, Feb. 24, 2022. (AP Photo, File)

Their economies rocked by conflict, Russian and Ukrainian authorities have deployed different tactics to defend their weakened currencies, with varying degrees of success.

The Russian ruble, which was trading around 80 to the dollar before Moscow sent troops into Ukraine on February 24, lost 40 percent of its value in the following days, slumping to an unprecedented level of 150 to the dollar, AFP said.

It has since clawed back much of that, trading at around 105 rubles to the dollar, seemingly having profited from talks between Moscow and Kyiv to end the conflict.

Despite having been cut off from much of its foreign currency reserves due to Western sanctions, the Russian central bank has nevertheless occasionally sold some to support the ruble.

Together with strict capital controls that require exporters to sell most of their foreign currency to the central bank and limits on consumers accessing their holdings, the measures appear to be working.

"During the past 10 years the central bank intervened directly only several times, which now works in favor of the market exchange rate stabilizing," said analyst Alexander Kudrin at investment bank Aton.

"The first signs of stabilization are already appearing," he added.

Russian economy expert Janis Kluge at the Berlin-based SWP think tank tweeted recently that the ruble was strengthening thanks to strict capital controls and large oil and gas revenues following the initial sanctions "shock".

In Ukraine, which is under martial law, the central bank has suspended all currency trading and set a fixed exchange rate of approximately 29 hryvnia to the dollar.

It also banned foreign currency withdrawals and most cross-border payments.

Volodymyr Lepushynskyi, director of monetary policy at the Ukrainian central bank, said officials had a plan already prepared in case of conflict.

"We always hoped that we would not need to implement it, but we were ready," he told AFP.

"Thanks to the experience of working in administrative constraints, we had a clear understanding of what needs to be done to prevent destabilization of the financial sector and to establish its effective operation under such circumstances."

- Black market danger -
Finance Minister Sergiy Marchenko recently said on Ukrainian television that the central bank's measures created "certain conditions under which there is exchange rate stability today".

He also noted that Ukraine has received support from its international partners including the European Union and World Bank, adding that the International Monetary Fund has approved a $1.4 billion emergency aid program for Ukraine.

Ousmene Mandeng, a visiting fellow at the London School of Economics, warned that while the measures may be justified by the extreme circumstances, they carry certain risks.

"The suspension of foreign exchange trading is de facto equivalent to a price freeze and... if prolonged can lead to a black market for foreign exchange and de facto multiple currency" use, he told AFP.

"A resumption of foreign exchange trading ... would be desirable to minimize implied distortions," Mandeng added, noting that the Ukrainian central bank had eased some restrictions and that some interbank foreign exchange market operations appear to be slowly resuming.

The central bank's Lepushynskyi said it plans to relax restrictions as soon as it sees room to do so.

"After the liberation of Ukraine from Russian invaders and the normalization of the economic situation, we will resume the full operation of the foreign exchange market and lift currency restrictions to pre-war levels in the shortest possible time," he said.

Mandeng also noted that Ukraine had about $28 billion in foreign currency reserves at the beginning of the month.

"That should offer some comfort for the short term but may eventually need to be replenished," he said.

Ukrainians fleeing the country with hryvnia in their pockets are facing the most direct problems due to lack of convertibility of the currency.

The European Commission's Executive Vice-President Valdis Dombrovskis said recently that the commission was working together with the European Central Bank "to provide some kind of convertibility assistance so that people are able to convert at least certain amounts of their savings in hryvnia into euros".



Iraq Oil Output Exceeds 5 million bpd

Majnoon oil field near the Iraqi city of Basra (Reuters)
Majnoon oil field near the Iraqi city of Basra (Reuters)
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Iraq Oil Output Exceeds 5 million bpd

Majnoon oil field near the Iraqi city of Basra (Reuters)
Majnoon oil field near the Iraqi city of Basra (Reuters)

Iraq produces more than 5 million barrels of oil per day (bpd), Oil Minister Basim Mohammed told state news agency INA on Saturday.

According to Reuters, Iraq is pushing for a higher OPEC production quota as the economic fallout from the Iran war and new investment by oil majors increase pressure on Baghdad to boost output, potentially putting it at odds with the producer group.

The conflict has hit Iraq particularly hard, forcing major export cuts and depriving the state of oil revenue, which accounted for 88% of government income last year.


IMF: Any Slowdown in AI-driven Growth Would be Factor for Central Banks

IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
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IMF: Any Slowdown in AI-driven Growth Would be Factor for Central Banks

IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)

Central bankers around the world would need to consider any slowdown in AI-driven growth as they assess steps in their fight against inflation, International Monetary Fund Managing Director Kristalina Georgieva said on Friday.

Georgieva said concerns about dependence on the AI investment boom and high valuations were impacting markets around the world.

"Things are going up and down, and this is likely to continue," she told an audience at IMF headquarters in Washington, adding that the volatility would complicate the job of central banks at a time when risks to price stability had been growing.

A steep rout in technology stocks on Thursday rippled through markets on fears that ⁠the Democrats' victory ⁠in the US midterm elections would increase regulatory scrutiny of AI and slow the data center build-out, sending investors to the safety of bonds.

The political jitters are hitting an AI trade already on shaky footing due to worry about return on massive spending on AI-related infrastructure, with the meltdown spurring margin calls and spooking retail investors and hedge ⁠funds alike.

Georgieva said the AI investment boom was lifting growth in some countries, helping to offset a negative oil-supply shock triggered by the war in the Middle East, but it was also adding to inflationary pressures and financial stability concerns.

The IMF last month flagged significant growth and financial stability risks from a potential ending of the AI investment boom, among other factors, including a prolonged Middle East war. At the time, it warned that a steep drop in AI investment could lead to a sharp fall in asset prices, ultimately cutting global GDP ⁠by 1.1% ⁠by 2028, including a 1.8% drop in US output.

Georgieva did not repeat the downside forecast on Friday, but acknowledged the recent market volatility.

"Should there be a slowdown in the AI-driven growth impulse, it would need to be factored in as central banks assess the necessary steps in the fight against stubborn inflation," she said.

Democrats are planning to unleash a flood of new legislation targeting artificial intelligence systems and data-center development when they take control of the US Congress in January, Reuters reported on Friday, citing congressional aides and advocates.

That would mark a sharp shift from the Republican-led Congress, where lawmakers largely focused on promoting AI development and declined to pass legislation restricting the technology.


World Food Prices Dip in October, but Remain Higher Than a Year Ago

A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
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World Food Prices Dip in October, but Remain Higher Than a Year Ago

A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)

World food prices edged lower in October as weaker import demand contributed to monthly declines in cereal, dairy and meat prices, but were still nearly 6% higher than a year earlier, the United Nations' Food and Agriculture Organization said on Friday.

The FAO Food Price Index, which tracks monthly changes in international prices for a basket of food commodities, ‌averaged 133.9 points ‌in October, down from a revised ‌135.6 ⁠in September.

The index ⁠was 5.9% higher than a year earlier, but remained 16.4% below its March 2022 peak.

FAO's cereal price index fell 4.5% from September and was 12.6% lower than a year ago, as wheat and maize quotations declined. Wheat prices eased on weak import demand ⁠and improved production prospects, especially in Argentina.

"Expectations of ‌easing constraints on Black ‌Sea export flows added to the downward pressure on prices, ‌although continued disruptions to Black Sea logistics limited the decline," ‌FAO said in a statement.

Maize prices also eased after reaching a three-year high in September, pressured by the US harvest, expectations of ample supplies in South America and renewed ‌prospects of easing tensions in the Black Sea region.

Vegetable oil prices edged up 0.3%, ⁠as ⁠higher soybean and sunflower oil prices more than offset a fall in rapeseed oil prices.

Sugar prices rose 6.6%, their fourth straight monthly increase, to the highest level since December 2024, after rainfall disrupted harvesting in Brazil. They were now 28.8% above a year ago.

The dairy index fell 1.1%, as lower butter and cheese prices linked to ample supplies and subdued demand outweighed gains in milk powder.

The meat index declined 1.2%, while still slightly above its year-earlier level, as ovine and bovine meat prices fell.