Photo Credit: The ECB Blog

Weekly Recap: July 18 to July 24

July 25: China vowed on Tuesday (July 19) to respond if US House Speaker Nancy Pelosi visits Taiwan, The European Central Bank hikes rates for the first time in 11 years last Tuesday (July 19), Sri Lanka Establishment PM Ranil Wickremesinghe has been elected by parliament to serve as interim president last Wednesday (July 20).

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North America:

  • China threatened to take “resolute and aggressive actions” last Tuesday (July 19) if US House of Representatives Speaker Nancy Pelosi visited Taiwan. Pelosi will head the highest-level US delegation to the autonomous island in 25 years. Pelosi, who is second in line to become US president, has stated her intention to lead a delegation to Taipei in August. The planned visit was denounced by China’s Foreign Ministry as having “a severe negative impact on the political foundation of China-US relations, and sending a gravely wrong signal to ‘Taiwan independence’ separatist forces.”
  • The United States has been pressuring Mexico since last Wednesday (July 20), over unfair energy policies that allegedly favour Mexican state-owned corporations over American rivals and sustainable energy providers. The US has demanded negotiations to settle the conflict, a process that started last Wednesday that might result in trade sanctions against Mexico. The Mexican government attempted to play down the issue by portraying it as a regular process between the two countries.
  • Governor of the Bank of Canada, Tiff Macklem, said last Thursday (July 21) that while Canadians are still feeling the strain of rising living expenses, the country’s inflation rate is expected to be “painfully high” for the remainder of the year. Last Wednesday, Statistics Canada reported the country’s annual inflation rate increased to 8.1 per cent in June from 7.7 per cent in May, the biggest monthly shift since January 1983. Macklem stated that the inflation rate is “unfortunately…probably going to start with a seven for the rest of the year” in an exclusive interview with CTV News.
  • The US senate voted for a CHIPS Act, an effort to boost domestic semiconductor manufacturing capabilities amidst an international chip shortage last Thursday (July 21). The Senate voted for a less pared-down version last year, but it was stopped by Republicans and Democrat infighting.
  • Steve Bannon, associate of ex-President Donald Trump, was convicted of contempt of Congress last Saturday (July 23) as he defied a subpoena from a Democrat-led committee investigating last year’s US Capitol attack (Jan 6, 2021). He had refused to provide testimony or documents to the House of Representatives select committee.

South America:

  • Peru extended its agrarian state of emergency to the end of the year last Monday (July 18), as the price of commodities, specifically fertilisers, oil, wheat, corn, and soybean oil, continued to rise. The Russia-Ukraine War has been a driver of such increases. President Pedro Castillo has announced a loan for 10 fertiliser subsidies to ensure supply of fertiliser in the looming agricultural crisis.
  • Brazil’s national petroleum firm, Petrobras, announced a fall in production in Q2 2022 by 5 per cent year-on-year last Friday (July 22). This decline was attributed to maintenance stoppages while the fall was completely expected, pointing out that its refineries were still operating at 97% volume.
  • The Chilean senate approved a bill last Wednesday (July 20) that would lower the threshold needed for constitutional change, lowering the majority from two-thirds to four-sevenths. This would bring Chile one step closer to constitutional reformation.
  • Argentina announced measures to increase US dollar reserves last Friday (July 22). The economy minister said that it would allow foreign tourists to exchange US dollars at a higher rate than previously accepted, and that it would ease access to the foreign exchange market for import payments in the export sector.
  • Ecuador’s newly appointed economy and finance minister Pablo Arosemena met the International Monetary Fund (IMF), World Bank (WB), and Inter-American Development Bank (IDB) representatives to discuss several issues last Friday (July 22). Most saliently, Arosemena had discussed the IMF-supported US$6.5 billion (S$9 billion) credit arrangement agreed upon in 2020.

Asia Pacific:

  • Thailand Prime Minister Prayuth Chan-ocha survived a no-confidence vote last Saturday (July 23), a test against his rule just 11 months before the next election. He, along with 10 other cabinet ministers, had received 256 out of 471 votes, with 9 abstentions. This is the fourth vote he had gone through since his successfully-led coup in 2014.
  • The Asia Development Bank (ADB) reported last Thursday (July 21) that the region’s gross domestic product growth would be 4.6 per cent, down from an April prediction of 5.2 per cent. The ADB had explained that growth was tempered by the Russia-Ukraine War, which induced supply disruption, global commodity price spikes, and monetary tightening.
  • China’s US bond holdings dropped to below US$1 trillion (S$1.39 trillion) last Friday (July 22), to a 12-year low. Sanctions on Russia and increasing US interest rates have pushed China away from the dollar, as geopolitical pressures aggravate long-term US-China economic decoupling.
  • Unpopular Sri Lanka Prime Minister Ranil Wickremesinghe had been elected by parliament last Wednesday (July 20) to serve as interim president after ex-President Gotabaya Rajapaksa had resigned on 13 July, 2022 amidst economic, social, and political turmoil. Wickremesinghe has held the post six times, and is seen as a member of the establishment against which citizens had protested in the first place.
  • Pakistan’s ousted (April 10) Prime Minister Imran Khan had won Punjab by-elections last Monday (July 18) and will form a provincial government soon. Khan’s Tehreek-e-Insaf party won 188 seats, 2 more than the simple 186 majority. This is seen as a blow to Prime Minister Shabaz Sharif’s leading coalition, but does not change anything in the short-term as Pakistan is a federal parliamentary republic, meaning provincial governments are given fair autonomy.


  • Europe, as of last Wednesday (July 20) is suffering its worst heatwave ever, with temperatures breaking records in various regions. The heat wave has made it clear that most of Europe is not built to withstand intense heat or a rapidly changing climate. Although significant heat waves have become the new norm for summer due to climate change, the scorching temperatures currently sweeping throughout Europe appear especially disastrous. Germany, France, Denmark, and Spain are the countries most severely affected by the heatwave.
  • Europe’s economy, as of last Thursday (July 21) is undergoing its most difficult test since the COVID-19 pandemic began more than two years ago. Consumers are being impacted by the high inflation that developed economies, including Europe, are experiencing. The continent, however, is also dealing with a volatile energy crisis, sizzling temperatures, and a new round of political unpredictability. These issues all came to a head last week. As risks mount, economists warn that a recession later this year or the first quarter of next year is increasingly likely.
  • The first rate increase by the European Central Bank in 11 years came last Tuesday morning (July 19), as the euro rose to an almost two-week high while eurozone government bond rates increased. The Governing Council of the European Central Bank (ECB) was expected to conduct in-depth and open discussions regarding the extent of its first rate increase in eleven years last Thursday (July 21). If wage growth and persistent high energy costs lead to increased inflation expectations, the ECB may need to continue tightening policy even during a mild recession.
  • Italian Prime Minister Mario Draghi tendered his resignation last Thursday (July 21). This was set against the backdrop of a vote cast on Wednesday that indicated a loss of parliamentary support and no prospects of majority coalition formation. A snap election, likely to take place in September, has been called.
  • Germany extended the deadline for nuclear power last Monday (July 18) as Chancellor Olaf Scholz said they would reassess the plans to shut off the country’s three remaining nuclear power plants by the end of the year. This is as Europe is thrown into an energy crisis and dependence on Russia for energy marked by the resumption on Thursday (July 21) of Russian gas exports to Germany through the Nord Stream 1 pipeline.
  • Ukraine looked to continue grain exports after Russia claimed responsibility (July 23) for a strike on Odesa, a major trading port, on Saturday (July 22), despite having agreed to resume grain shipments on Friday (July 21). The port was not significantly damaged and Russia claimed that it had aimed for military targets.

Middle East:

  • Flash floods killed more than 21 people in Iran last Saturday (July 23). Droughts exacerbated these problems where rain water could not permeate the dry ground. At least 55 people were rescued, the crisis management department had reported.
  • In a rare trip, Russian President Vladimir Putin visited Iran on Wednesday (July 20). He discussed Syria, Ukraine, and grain exports during the meeting. This was his second trip since the start of the Russia-Ukraine war.
  • The Iraqi government announced last Wednesday (July 20) that it would contact the Iraqi charge d’affaires in Turkey for consultation, after the accusation that Ankara attacked a mountain resort in the northern province of Dohuk. The United States stated that it firmly supported Iraq’s sovereignty. Turkey refuted Iraq’s accusations that it launched an attack that left eight tourists dead and 23 others injured, declaring the incident to be a terrorist act. “Turkey is ready to take every step for the truth to come out,” its foreign ministry declared in a statement.
  • Turkish president, Recep Tayyip Erdogan, declared last Wednesday (July 20) that unless his nation’s security concerns were addressed, his plan for a military offensive in neighbouring Syria would stay on the agenda. Erdogan met with his Russian and Iranian colleagues on Tuesday in Tehran to discuss Syria after announcing earlier this year that Turkey will conduct a military attack in northeast Syria against the Kurdish People’s Protection Units (YPG). He asked for backing for a new Turkish operation against the YPG during the discussions.
  • Employees of Lebanon’s central bank still loyal to Riad Salamehbegan a three-day strike last Wednesday (July 20), following the attempted arrest of the governor of the central bank by a prosecuting judge due to the judge’s perceived “militia” methods. Judge Ghada Aoun, who gave the go-ahead for a judicial search of the Lebanon Central Bank offices in Beirut last Tuesday, has publicly accused Lebanon’s leaders of protecting Riad Salameh, the longstanding governor of the central bank, from arrest on many occasions. Salameh is now being looked into for potential money laundering and illegal enrichment in Lebanon as well as five European nations.


  • Amnesty International decried mass killings in Ethiopia that showed the “utter disregard for human life” last Thursday (July 21). This referred to clashes in the Gimbi district, which saw the targeting of ethnic Amharas by the Oromo Liberation Army (OLA) and the killing of more than 400 members of this minority group.
  • Chad banned young girls on Thursday (July 21) from leaving the nation without prior parental permission. Security Minister General Idriss Dokony Adiker had justified it by saying that they looked to end the flows of young girls outside the country for the “purpose of exploitation”. General Adiker did not specify the age of girls banned from travelling.
  • Namibia and India reached an agreement to relocate cheetahs from the southern African country to India last Wednesday (July 20). 50 cheetahs will be moved over the next five years as India’s former population of Asiatic cheetahs were proclaimed to be extinct. Delhi has said that this move was conducted under the rules of the International Union for the Conservation of Nature.
  • Marked by a launch ceremony last Tuesday (July 19), the Nigerian National Petroleum Company looks to undergo privatisation after more than 50 years of government control. The firm had faced many allegations over the years for being corrupt, opaque, and holding conflicts of interest as it acts as a player and regulator in the sector.
  • An al-Qaeda-affiliated armed group in Mali declared that an attack on the country’s military headquarters last Friday (July 22) was done in response to Russian mercenary-government collaborations in domestic clashes. One soldier was killed and six were wounded as two car bombs were detonated.
  • Protests swelled last Saturday (July 23) in Tunisia against what is seen to be the planned vote on a deeply unconstitutional draft constitution by President Kais Saied,  who had engaged in anti-democratic moves and crackdowns. The vote will happen exactly a year after Saied suspended parliament and sacked officials (July 25, 2021) on Monday (July 25).
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