treasury are dpaipped while the yen and indonesia finance minister and off the pandemic. >> we will hear from the fingerprint appears minister. and what we are hearing and how much ukraine dominated these discussions and really has been about the about the u.s. and russia set to talk next week. but helping septemberments this morning. >> you are right, and not to take away that is a market, we have ukraine and inflation and more than $2 trillion of options expiring on friday.

and 27, 28. and where we are in terms of the market under pressure and hong kong down and .7 of 1% and it is quite interesting that it has been muted and the investors feel that the risk shall pass. and where we are in terms of the yen. 114, 78 before the announcement between the u.s. and russia and looking at the crude companies and down half of a percent. it is 1900 and risk up in terms a currently falling. >> you have a bit of a bit of bonds and u.s. futures and

headline about this next week and spike here and it is so fragile and we saw the risk appetite and u.s. futures. a europe looks hike to be as we continue on and the hope that pelosi will prevail and yen getting action. goaled catching it here as well and hit the 1900 mark and we are slightly below that as well. and boil i don't know is in the forefront and have the double wham cry of fed tightening and gold, 1888 and stabilizing and one basis point. and we are still below 2% and ukraine, the latest, this is the

thing we got from the state department, anthony plimpgen, the foreign minister will be meeting on these proposed dates for late next week. the u.s. has accepted this meeting provided they say a big caveat but no further russian invasion and if they invade, it will make clear they were never serious. >> we are talking about oil and sagging and oil prices but look at the strong about how stock prices are way higher. it is suggested that it is a tight supply and agency spread. and take a look of where we are in terms of the option market.

and prices may be higher in the future, not lower and willing to pay a premium to pay those supplies. we are looking at a tight supply situation. >> you have to wonder how iran plays into it. does it change in any way? does president seem it is the case. but bring in paul what has been walking through. andrew: as a result of these tightened tensions? paul: and the high right now and sensitive to those risks and see that this morning on marginal changes and people choosing to see the better or worse in the

markets and also. and like you were saying and hypertension in the markets. and keeping everybody on edge. one of the things that is interesting to think about and the full situation that we were talking about the fed height and less maybe now. and with the markets pricing has done and kind of taking away likelihood that they see a hike pi the fed in march. the people suddenly, a little more carbous and which probably makes sense and and the fed minutes didn't give the market any more aggressive cycle.

so that is a little bit macro risk and geo political risk. >> if we do get a slightly less hawkish fed. do you think what is going to go on? >> one thing that is ironic we have seen in recent days the big name calling for the fed to be more aggressive. and talking about how the fed needs to pri did you know the housing market and play mortgage costs and bringing down inflation without causing an economic crash and even in the credit, and talking about how the credit investors would be a

good thing and kind of hit that reset button. across markets. a lots of pricing going on here. one of the things we have been talking about the g-20 meeting and there is a cycle and get interest rates, how does that play out? suddenly everyone wants to talk about it and weaken the currency. it could take winners and losers and think about japan. >> and that is the thought process now. >> paul, thank you. breaking down that chaotic

market. and we are in new york. >> thank you. jim says the central bank may need to raise rates. and closed hyped 100 base is points. said policy makers need to be prepared. >> if you wanted to put downward pressure on inflation you need to go beyond neutral and that is a major concern of mine and not in a position to do that now but do it at some point. >> u.s. and chinese messaging point. u.s. trade representative says the two platforms facilitate and putting them on a register --

[snecial] -- indiscernible] >> donald drum ever trump and his children have been ordered to testify after a new york state judge has blocked their request. trump, trum scrr a i vampga trump have 21 days to testify. japan is rolling some of the rules in the world. admitted japan has suspended all new flights through december and the prime minister has public support against business groups. 24 hours a day and on air,

powered by 2700 journalists in 120 countries. this is bloomberg. >> asia and indonesia, speaking with the indonesia finance minister and what she expects. our discussion with the central bank of scri lampga and bolster the reserves. still more to come. this is bloomberg.

>> and we have a hotline due to the situation in ukraine. president biden is calling on

leaders set to happen in friday. we have the u.s. is open to talks with russia and happening with blinken and his counterpart in russia and happening next week. and all parties are trying to de-escalate the tension. >> and hope it avoiz any kind of attack and that is what is at the moment. and central banks. scri lampga fell 25% last month after repaying a $500 million bond and worries and the country has been scouring for funds to propose up his reserves. and since the pandemic began, the nation's leaders have south between the major powers while

resisting a bailout. we have the governor of the central bank of sri lakinga. is on track to bolster its reserves and avoid a default? [indiscernible] >> those have been useful and at the same time, and many discussions going on. and at the same time, they are hopeful and that's the key here that we would like to have --

[indiscernible] >> and last two years, we haven't been able to enjoy and most probably and have 100,000 and perhaps -- [indiscernible] >> governor, you mentioned a little bit more much where you are getting these funds including china.

can you give us more clarity of the size of this and the timeline. >> dhien is 1.5 billion and india there is a new line of 500 million -- [indiscernible] >> there is a new demand for imports and they have to be managed care tlly and little bit of support that is coming from independent yeah and support and

negotiating. >> so far, it has been and new funds coming in. that is $300 millions is a substantial amount and all that is in place and options, all these -- [indiscernible] >> governor, what are the news and that is not sustainable and do you agree with that, and what is the kurpsy according to

market conditions? >> sometimes the market conditions that people look at are -- a little bit beyond. what is the government transaction market like. [indiscernible] >> i think sometimes the people have angles and their plef and exchange should be different. and holistic view.

indiscernible] >> do you have to raise rates tore support the currency a look at inflation, is a more tightening path still in the cards tore you if we are talking about a rate hike as early as march? >> i think we are concerned as anyone else as inflation. but also observed but it is important. and seeing -- [indiscernible] >> we did increase the interest rates and offered adjustments by

the central bank. and values, and it shows that it is increasing and take into consideration. so i think that right now and we will watch. we will be very careful that is not ruined -- [indiscernible] >> there is another option out there, of course, at least to boost confidence. but it seems you are not quipsed about that. are opposed to that? >> that is an important sector.

and the stock market one of the best performing markets year round -- [indiscernible] >> the confidence is there. we don't need to add too much because if you are boosting confidence, what more can you do? and seeing that and seeing the overall economy and that is important to recognize. and changes in our economy. and there is indication --

[indiscernible] >> you talked about inflows coming from china and scri lampga could be in china's death trap. >> that was in some time. sri lampga and china is a county that is having the best --

[indiscernible] >> governor, you mentioned about leaning on china for help and india. there a risk of scri lanka being sandwiched between these two nations? [indiscernible]

>> we are seeing that relationship break. and that dpreement is for sri lanka. >> the governor a more coordinated approach to exit and spill over and will be caped. your thoughts on that? >> the governor made much because i think sometimes the sensitivity of g-20 has been propositioned in my view in markets and i think that global view point is that is important

for us to recognize. and -- [indiscernible] >> those also would be looking at that. [indiscernible] >> governor, thanks you so much for your time. we thank you for your insight. indonesia's finance leader and hosts the gmp-20 summit and reliance. don't miss that interview. >> russia is warning it may

slump for a second year and raw materials and shipping costs are likely to jump more than 2021. sales growth has slowed. and often a moderate. and less than 800 passengers a day and will rival the airlines getting travelers back into the skies. and expect it to be 2% of prepandemic levels. and more than $4 billion tied to hedge funds. the charge led to a loss in the fourth quarter and major investors in the structured funds.

japan gets to lunch. and we are seeing the demand for the yen. and u.s. and russia meeting next

>> we are seeing improvements just marginally that u.s. and russia will be engaging in talks late next week when it comes to ukraine. you are seeing a bit of a bid with bonds and are you seeing the yen as well. andrew: the haven and opening

markets are mixed here to end the let's get to first word news. >> thank you. the u.s. warning of a russian invasion. president biden saying the kremlin is involved in a false flag operation. antony blinken echoed those remarks at the un security council, where he called on moscow to pull back forces and proposed meeting with his counterpart in russia. >> our information indicates these forces, including ground troops, aircraft, ships are preparing to launch an attack against ukraine and the coming days. >> police are blocking off protesters who have blocked the

area in canada for three weeks. all demonstrators must leave. the names of participants sent to banks, and lenders are waiting on instructions about how to handle their accounts. india unveiled its hydrogen roadmap, offering incentives to produce at low cost. it is shifting away from its reliance on fossil fields, part of a plan that provides free transmission of renewable electricity from one state to another, to the production of hydrogen and ammonium. the country may require oil companies to remove the fuel in the second ways. new south wales lifting covid restrictions 10 days earlier than expected. it is dropping limits and other social distancing measures. the recommendation to work from home is changed, and now up to employers to make the call. it will reopen its borders to fully vaccinated international

travelers monday. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. yvonne: let's look at the key stories out of southeast asia. indonesia is about to get fourth-quarter account balance data in half an hour. tidelands parliament is holding a debate on an opposition-sponsored censure motion against the handling of the covid in the economy by the government. in singapore with spending priorities for the year in its annual budget presentation. those are some of the key points that the finance minister will address. haslinda: it is fiscal prudence after spending a lot of money supporting the government, supporting the economy and all the sectors that need help, not to mention the people as well,

so it is building the coffers again, so we are expecting some increases. there will be a change from 50 to 7% to 9%, whether it will be a one time jump toward in phases. also, possibly a wealth tax. we know the government has been speaking to wealthy people in singapore to gauge whether they can maintain the capital in singapore without causing that outflow. that is a concern. we are a financial hub in one capital to be heading here. it is a wealth tax could be a problem as well, so things to think about, but it is the fiscal prudence from a building the coffers for the future. yvonne: yes. we have the singapore budget. we have the hong kong budget next week. a lot to look ahead to when it comes to how hong kong looks to

counter or fight this latest covid outbreak in the face of the global status as an international hub being threatened. g20, the indonesian president has called for a de-escalation over ukraine in the meeting in jakarta. he warned a conflict would disrupt the world's economic recovery from the pandemic. >> this is not the time for rivalry, nor is it the time to create new tensions that disrupt the world's recovery, let alone endanger the safety of the world , as is happening in ukraine today. all parties must stop the rivalry attention. we must focus on synergizing and collaborating to save and resurrect the world to quickly rise and recover. yvonne: let's bring in the

finance minister of indonesia, hosting the g20 summit this year. haslinda: good to have you with us. with regards to ukraine, has that cast a shadow over the meeting of the g20? >> we certainly see many risks to disrupt the recovery process. on the one hand, higher inflation along the normalization of the monetary policy. that will have a spillover effect and undermine the recovery for many emerging and developing countries. also, the geopolitical environment will also create additional downsideand that is why the president is already mentioning it is time that is not time to escalate

tensions is a but we can work together to be able to recover together, recover stronger. haslinda: in the g20 be a platform to de-escalate the tensions? -- can the g20 be a platform to de-escalate the tensions? >> pandemic is not over yet. we see the uneven recovery across countries, which is creating another complication for the policymakers. as i mentioned, the pandemic is the source of the situation which many countries have already used their policy space, whether on the monetary side, and is already entering the third year, and that is why many countries are facing a narrower fiscal and monetary space. at the same time, the recovery is not even across countries in the world, and that complicates the environment for policymakers.

sometimes there is a high growth recovery, as well as inflation, so they have to adjust policy domestically. at the same time, other countries feel left behind, and that can create an environment for the policy, which is not easy, of the pandemic is still there, and the environment of policy, which is more complicated. when wei put it in the geopolitical context, the spirit of cooperation and coordination was created with the backdrop of the financial crisis in 1997 to 1998, after the financial crisis . we created the g20 at the finance minister and bank governor level. in 2008 to 2009, we had a global financial crisis. the impact created a coordination how we can avert

the dire risks for the global economy. that is wiped when we have the pandemic, another -- is coming and we have to do the same. yvonne: if the g20 wrapping up today in jakarta, should we be looking for anything in the communiqué today? have there been breakthroughs in recent efforts to help countries on climate change? >> well, we will discuss today sustainable finance. i think it is important as a topic. sustainable finance has a roadmap, which is cochaired with the u.s. and china. now it should be translated into how the financing side for many countries who committed to avert the climate change disaster to be able to implement their action plan.

that has something to do with the financing and the technology aspect. how a country can design that, like indonesia, we have the energy transition mechanism, but we are working hard on how to make this affordable and just, affordability related to the people come into the budget in this case, as well as the electricity company in the private sector. while it is related to how global issues like climate change can be addressed, in which each country will contribute their share, i think this is going to be a very important topic that we will discuss on the sustainable finance this morning. yvonne: sure. minister, just focusing on indonesia, the government pushing ahead with new capital. how much of the state of

spending needs to come from the state budget? how will you be reallocating to accommodate for it? >> i am not sure. i did not hear the first part of your question, but you're talking about the state budget related to what? yvonne: i am talking about the state of spending, the government pushing ahead for new capital, how much of the stated spending needs to come from the state budget? >> ok. first, the state budget in indonesia with the pandemic in the past two years, we are widening the deficit from below 3% to 6.1%. in 2021, we had a good return on our state budget, revenue increase rapidly with more than 18% growth, while the spending has been controlled in a disciplined, and we continue to support the pandemic expenses

related, as well as supporting small and medium enterprises, so the deficit is lower at 4.65%. in 2022, we have 4% gdp of our deficit, so the consolidation is there. related to the new capital, the law we just passed by the parliament stipulates the transition until 2014 -- 2040, so we will focus the design plan to build, so they will be designing the mover the capital city in a sustainable way from the financial side and environment side, and also making progress on indonesia to be able to spreading the growth and development outside the country. this is important.

it is a big island, with a population less than 6 million. it will be very good for us to be able to design a capital city for growth and modernization on indonesia. haslinda: minister, i want to talk about on the program with bank indonesia. are you confident 2022 will be the last one? >> this is what we discussed. i mentioned we are operating during this pandemic with this emergency situation, which underlining to 22 law approved by the parliament. -- the 222 law approved by the parliament. in order for us to focus on the pandemic and social protections, this is not like the bank of indonesia financing our deficit for general expenses. so this is one discipline we have already agreed within

indonesia and the government. the second one is three years, the time for us to do this one, and that is exactly what we are talking and announcing to the market, so that we are going to be able to create confidence. the participation of central banks justifies because we are under extraordinary situation, but we also know that the independence of the central bank is actually at the core of the confidence towards the macro economic stability and credibility of indonesia. we are not going to jeopardize that. policy going back to consolidation by 2020 three, in which the deficit will be below 2%, so we are going to have to manage both spending and reform the revenue side to continue spending at the level which is needed the country to be able to recover, but the financing would

need to be significantly reduced because we are operating at a deficit below 2%, and bank indonesia will not continue this direct support. thank indonesia and the minister of finance are working together in order for us to be able to continue maintaining stability, while supporting recovery. this is not only one job for one institution. we work together, even within the g20. we recognize that across the country that we have to work together, because this is a very complex policy environment for all of us. yvonne: also when it comes to the macro picture and people talking about only a prices, we could be hitting $100 oil soon to does indeed -- soon. does indonesia have to consider the adjustment up prices? >> we look not only of oil, but at the same time, we have other

commodity like coal, nickel, iron ore, they are also moving with this price during the very rapid recovery. that is good for indonesia as a natural source producer, but we also know the competition on our budget as well as the ability to move through this increasing price and commodity prices like oil will be hard for the people, who are still early in the recovery, said this is going to be the core of the design of our fiscal policy, how we are going to find the right balance between taxing, the recovery process, and purchasing power, but on the other hand, we will be able to create a better, healthier fiscal tools. also on the other hand, we will

be able to burden share in a more affordable way on the society, business, the state budget, so that we will be able to come up with the right combination. this is what we are doing now for 2022. as of today, the price, we are maintaining the level for the recovery process. yvonne: thank you so much for your time, minister. that was the indonesian finance minister. coming up, another interview, our exclusive interview, and the environment ahead for airlines in international travel. stay tuned. this is bloomberg. ♪

haslinda: welcome back. our next guest says the recovery is on the way, the ceo of the were just largest global airline association, star alliance, including singapore airlines, lufthansa, and united airlines. good to have you with us.

we are seeing more borders opening up. how encouraged are you? what recovery might we expect in 2022? >> good morning. it is hard to believe we are here to say recovery is on the way. i think the second half of last year there was cautious optimism and confidence that recovery was on the way up but then omicron came at the end of last year. nevertheless, we are seeing borders being opened, quarantine requirements reduced, removed, and where we are right now, we have higher vaccination rates, better unity, generally speaking , better understanding of the virus in its variants, s it is fair to say after two years --

so it is fair to say we are learning to live with the virus and going onward from here. haslinda: you can't talk about a return to international travel or normality until china comes on board. china contributes to a huge part of international travel. chinese travelers spent $250 billion in 2019 and overseas travel before the pandemic, so how much clarity do you have when china will reopen its borders? >> there will be pockets of uneven recovery, and asia-pacific is one of them. in a three-hour radius, you're crossing international borders. in the case of china and hong kong, the situation is unclear at the moment. notwithstanding the chinese government has published a five-year plan on recovery and growth, but it's delay as it were in opening its borders will have and is having a significant impact on recovery.

just yesterday, hong kong announced suspension of singapore airlines flight carrying passengers who tested positive on arrival. it is a question mark whether that is necessary. no airlines will willingly carry a positive infected passenger anywhere, so there are questions to be asked on some of the policy. yvonne: it is interesting, you mentioned in november, star alliance among your rivals or peers did engage with the chinese authorities and tried to convince them to ease the border closures. what are these discussions like now? has there been any progress from there end? >> to the extent that weekend, we do what we can as an alliance or alliances.

airlines are doing it by themselves too, and international associations are trying to convince regulators and authorities who take a more informed of the use of her. what has been missing in the last two years -- on the opening of borders. what we have been missing in last two years, what i call the politicization of vaccines for recognition and non-recognition of vaccines, and at the same time, we have regular -- regulators, rigo torrey 30 singlets be informed by science and medical evidence in the way we treat our border controls, but very few are walking the talk. that is where our concern is and where we need to pay attention. haslinda: al will travel change in the next two or three years -- how will travel change in the

next two or three years? mask wearing, vaccination status in two or three years, how will it change? >> i think for at least the next two to three years, that is the expectation. while we are learning to live with the virus, eventually these requirements will disappear or go away, and that is one thing the industry needs to make sure, like the 9/11 tragedies, some of those rules are still with us today, and we have to make sure the covid-19 rules, some of those rules, don't need to be with his going forward, but it is an interesting question because as recovery returns and volume of passenger increases, these new frictions and processes will need to be addressed. they are not sustainable. the process of documentation and check-in. haslinda: we know that star alliance hq is moving to singapore. give us a sense of what the

situation is. >> sure. the establishment of the regional headquarters is complete. we are fully operational since october. we are up and running and trying to access innovation and resources. it is a great team focused on supporting members, the recovery, and the products in terms of a seamless experience in a customer-centric processes and services. haslinda: looking forward to better days. looking forward to traveling at least. joining us exclusively from the lion city. let's look at markets right now. it is risk on. all sessions lows. ukraine front and center. the u.s. and russia set to meet which could allay some concerns. the yen is front and center. that is lower than what it was

before, 114.78. we are watching the commodity space. oil is lower now, but still at elevated levels. in excess of $90 a barrel. keep it here with us. this is bloomberg. ♪

>> welcome to "bloomberg markets: asia." >> here are the top stories. russia rejects warnings from the west that an invasion may be imminent. risk appetite taking a turn on that report, erasing earlier gains. they get moved against major peers. singapore seeking rebalance

after two years of covid deficits and labor policy are a top budget concern. >> what a week, swinging between risk on and risk off, not surprising given the uncertainties. ukraine, inflation, and today, we are tracking those who trillion dollars of options expiring. take a look at where we are in the equity space, under pressure. investors on edge. hong kong down. here is the fx base for the yen -- space for the yen, strengthening a little. it is strengthening on the back of optimism that the u.s. and russia could come to some kind of agreement when they meet next week. in the commodity space, crude down 0.7%.

elevated levels will country to inflation concerns. in the bond space, yields falling. the 30-year japanese yield currently down almost three basis points. yvonne: it is not a whole reversal, but we are trimming losses. we are off the lows. the movers come russia-ukraine-related expose stocks where you are seeing the action. we are still lower in hong kong. a quarter of revenue does come from russia. you are seeing some downside. fragile sentiment, it is safe to say when it comes ukraine. we are looking at those tech names. we have seen a bounceback, tencent up 0.25%, after we heard from the u.s. about that piracy

listing and the strong disagreement being put on this notorious list. front and center is about ukraine. haslinda: let's get to the white house and kremlin agreeing to top-level talks. let's get the details and market reaction. let's start with what we know so far on the topic. >> we know the u.s. secretary of state antony blinken has proposed this meeting with his russian counterpart, and the russians have accepted according to the u.s. state department. the meeting has get to have a specific date, but we are looking at sometime late next week, which could mean there is a certain amount of time for diplomacy to continue.

we also know that yesterday the eu leaders agreed to a proposal of potential sanctions that would include energy, and those would be applied if there were russian military action in ukraine soon. russia has said it has no intention of invading. russia said it will be concluding military exercises with belarus this weekend, and will be drawing down its forces. the west has expressed skepticism about that, and president biden said he thinks there is the possibility that there would be a false flag operation that would provide a pretext for russian action. yvonne: garfield, d ukraine tension seem to be taking a hit on the fed rate expectations as well. what is positioning looking like

now? is the threat of a basis -- a rate hike in march fading? garfield: overnight, it is about where it was, or 30% chance, which is close to where it was before the inflation report last week and those comments that he would like to see a hike in the march meeting. those are still substantial, and there is a decent chance that happens, but they have not really adjusted to the latest headlines out of ukraine, although treasury yields have picked up a bit, but there is a since when you look at the bond market, it has taken some of the heat out of what was an increase in yields commit because of this since -- sense that even if tensions don't lead to something

dangerous, they will be there a while come and you cannot write this risk off if you are in investor, in the many people in the past would do. so up until about this week. haslinda: sufficed to say volatility will remain high until we see the move from the fed in march. garfield: yes, that is very much the situation, especially the bond market. that also helps to drive the volatility in equities as well. we have a lot of investors saying that the bond market usually turns around after the first hike. we also have the first hike in march coming just before the end of the japanese fiscal year, so japanese investors who are holders of treasuries amongst foreigners, they might want to wait until april until they decide to put more money back into treasuries, even if yields

currently are at the levels they might like the look that over the longer term. yvonne: bruce, walk us through what we are hearing on the ground when it comes to ukraine. a few days ago, there were signs of cooling in a pullback that russian troops, but what is the situation like now? >> well, even as there are hopeful signs that diplomacy has a way forward, we are also hearing about military action in eastern ukraine, where the cleaning government says russian-backed separatists increase shelling of the ukrainian army. ukraine said there were 40 cease-fire violations by the separatists, including its on a kindergarten, a school, and several people were injured. the russian-backed separatists

accused ukraine of violating cease-fire and said they were just responding to those violations. to be sure, these allegations of violations are not uncommon. we have seen them before, but given the tensions now, they are significant. we also know that the kremlin has said that it is concerned about the west not responding to its demands, and said it still has the possibility of what it calls military technical measures, without making clear with those are, so that is a potentially ominous sign as the two sides look ahead to further talks next week. yvonne: thank you. we want to thank garfield riddles -- reynolds on the market reaction as well. in the meantime, here's vonnie quinn with first word news. >> thank you.

jim bullard says the central bank may need to raise rates above 2% to curb inflation. speaking in new york, he called for the fed to hike by 100 basis points by july and start runoff in the second quarter. he said policymakers need to be prepared for the risks and that high prices may persist. >> if you want to pull downward on inflation coming up to go to neutral and beyond neutral, and that is a major concern of mine. we are not really in a position to do that right now, but we have to get into position to do that at some point in case inflation does not moderate. >> japan is rolling back its stringent border rules. new foreign entrants not including tours will be admitted up to 5000 per day. japan has rescinded new flight bookings. they must balance public support for entry bans against

the needs of businesses. a business innocenti has lashed out at the spy agency after it issued a report accusing beijing of course of foreign policy. estonia's foreign intelligence service says china use strong-armed, underhanded diplomacy during the pandemic, but also singling out critics and collecting private email addresses. the report had no factual basis, being called militia speculation. canadian police are blocking up downtown ottawa in a move against anti-vax seen the protesters who have occupied the area for three weeks. officials say only those with the legitimate reason can enter the area, and unlawful demonstrators mostly. banks in canada are being sent the names of protesters. they are still waiting for instructions on how to handle their accounts. global news 24 hours a day on air and on bloomberg quicktake,

powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. haslinda: still ahead, the cfo of the third biggest lender and southeast asia joins us the breakdown its latest earnings and guidance. plus, just ahead, we discussed the impact of geopolitical risks on currency markets with the macquarie group. keep it here with us. this is bloomberg. ♪

yvonne: let's look at the asset space. haslinda: asian currencies have been laggards in the em world.

they are lagging behind their latin american counterparts. look at that. the brazilian currency among the biggest gainers, up 10% today. yvonne: it is the policy diversions, when you have the central banks that have embarked on frontloading their rate hikes more aggressively than the fed, so that makes asia lag behind. let's bring in our next guest to focus on it. he is an effect strategist at macquarie group. walk us through this. when it comes to asia underperformance, how far do you think asian currencies will lag other emerging markets? >> not think it is important to put this underperformance in perspective. if we consider the whole episode

with cova, emerging asia has performed better than the rest of emerging markets, especially the renminbi and the taiwan dollar by virtue of relative stability. this year, we have seen it lagging partly because of major, seeing it catch up with the underperformance in the past few days, and as you said, those outside emerging-market asia have been aggressive in terms of tightening cycles for central banks, and the backdrop help to support the ex-asia complex, but it is still early in the year. it is important to not in it early. among emerging-market asia, there are selective positive stories, like the thai baht. we are seeing border reopening

in terms of the broader politics out there. and then there is this nickel resource boom and how that would allow more resilience in a tightening cycle. i think that story is on track. the singaporean dollar, even though it will be a lower absolute return, when you adjust for the volatility, it is still unattractive contender because of the prospects of the tightening. when you go into the second half of this year, we also expect some of the asian central banks to catch up a little bit. on the other hand, outside asia, you may see central banks tightening because growth is slow comes of that may turn the balance in the favor of our region. yvonne: you are saying it is time to call a top for dollar asia. you mentioned asian central

banks will have to play catch up. which ones? it seems like korea and new zealand are the exception, but with a continue to be the exceptions? >> probably not. in emerging-market asia in particular, we have the off cycle tightening in january that surprise the market, and i expect another tightening in april. as you said, the bok has been preemptive in terms of the tightening cycle already. coming up, the india central bank and the philippine central bank will have to do that as well because of inflation rates in the economy. those like indonesia, for example, who have started with the liquidity normalization process from a they are starting to look at mate hikes in the

year. -- rate hikes later in the year. they will need to take note of a more aggressive fed, and that we expect domestic recovery to continue this year in emerging-market asia, so that allows central banks to do that as well. haslinda: is diversion some policy likely to continue with the pboc? the yuan stronger now, but weaker later? >> yes, we have a profile for the dollar, moving lower for the rest of the year, however the renminbi will be the exception and it will follow a different profile that is stronger now and weaker later. in the near-term, the story for the renminbi is one of disconnection between economic fundamentals and fx on the other. the economic fundamentals in the diversions, the pboc versus fed

policy, as we can see from already pricing in the market interest rate, they have typically, we have said that the renminbi should be weaker now, and interest rate differentials are saying dollar-renminbi should be 6.8 zero, however the transmission problem is that it is not working, and all the disruptions since covid have changed the balance, so we have china's exports being boosted by china production capacity, while the world is still reeling from covid. all of these border restrictions are also constraining capital flow and services, so for that, we will keep the renminbi strong, but the early actors are acting against the pboc. haslinda: asian emerging markets have always taken direction from the yuan. does that put at risk your projection of stronger emerging-market currencies like the indonesian rupiah and the thai baht. >> usually, yes, but things have

changed in the last two years. you have seen renminbi outperformance, while the rest of asia is maintaining close correlations to the broad dollar. 2022 is the year where you see the continuation of that trend, with the dxy lower, helping asia fx, whereas the renminbi will be trading on different factors due to the border restrictions in the covid policy. haslinda: thank you. though to come, singapore -- still to come, singapore presents its budget with the government expected to raise the sales tax for the first time in 15 years. we will have the details next. keep it here with us. this is bloomberg. ♪

haslinda: this is "bloomberg markets: asia." you are looking at the lion city. the benchmark is flat on a day where other benchmarks are lower because of ukraine and inflation. it is probably benefiting from the reopening trade. today is budget day. singapore will detail its post-pandemic future in its budget today. the finance minister is expected to focus on rebuilding by really using -- raising the sales tax for the first time in 15 years. for more, here is percent who leads our coverage of the region. what are we expecting today?

there will be a slew of rate increases? four >> yeah, good morning again from the lion city. the main thing people are looking for is an increase in the goods and services tax. it has been 15 years since they increased it. it will go to 9% from 7%. they are looking at the timing, and by what magnitude, whether it will be in one go or they will space it out. that will be of interest to not only consumers, but investors looking at the inflation outlook and singapore. they were look at what that means for central bank policy and singapore. haslinda: first potentially rising from 7% to 9%. how do you think the increase will be received? singapore is one of the few places in the world where they are raising taxes at a time when inflation is hot. >> yeah, you are right. it is a funny situation.

they had to spend $74 billion to covid relief in the last couple of budgets, so the message the government is giving is it is time to restore those finances and they have to plan more for the future, rising health care costs with an aging population, so they want to bring the budget vectra surplus and not have to worry about a tax. they are aiming to do this in a wide way with the gst, but making the city-state more equitable with potentially certain taxes on wealth that might be coming today, as well as this international global tax agreement of 15% for multinationals. haslinda: what about potential foreign labor changes? what are we expecting? >> on that, the singapore

government is constantly trying to balance the needs of being a free and open city, as well as relying on foreign labor across markets. again, making sure singaporeans are core to the workforce who can benefit from the supplementary workforce that comes from overseas, so there will probably see some tweaks on the margins, what they call the minimum salary, perhaps quotas, may be some incentives to bring in other types of industries or investments from specific industries they are looking at, like biotech. haslinda: thank you. yvonne: yep, a bloomberg scoop on the latest with morgan stanley and that probe. we are hearing that the doj is

seeking information on executives xiaomi. they have names -- executives. they have names that have been highlighted. it shows us the scope of the probe and how it has tied into these relationships morgan stanley has had surrounding one of its top equities executives but so what we are hearing so far right now is those names are not targets, but they have been highlighted in this probe. we will have more on the story. check it out on the terminal. take a look at markets. we talked about the risk appetite coming back, albeit marginal, but still come and go when it comes to ukraine, of course, but were focusing on the property names and china. there are local reports about how they might be loosening restrictions when it comes to new homebuyers.

that is up more than 3%. here is your gmm function. it is risk off, but we are off the lows. the

>> taking a look at when it comes to your shanghai composite, we are pre-much flat as we take a look at what has been going on when it comes to chinese equities. we are getting into that break. . we are focusing on the property spaces. this is about the csi 300.

>> most asian benchmarks are under pressure. there is some risk out there including with ukraine. perhaps there are talks within the u.s. and russia. the same thing for the hang seng. it is a buy at this point in time. let's get the first word news to vonnie quinn in new york. antony blinken will meet with his russian counterpart, sergey lavrov next week. earlier, the u.s. said this is a with president biden saying that the permanent is old in an operation to give it makes used

to attacks his neighbors. the u.s. has added chinese messaging by form we chat and the online marketplace alley expressed to its notorious markets. they said there is some trademark counterfeiting that put them on a register. they first started publishing the annual report in 2011 to increase public awareness of how markets operate. donald trump and two of his adult children have been ordered to testify in a similar -- there are not what he want days to testify in the new york attorney general so a into potentially fraudulent asset valuations. india has unveiled this, offering incentives.

the best part of the plan provides free transmission from one state to the other. the government may oblige oil refineries to use the fuel in the second base. -- second place. global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn, this is bloomberg. >> the worst of the pandemic is over. the third largest lender by assets in southeast asia expects higher margins from upcoming interest rate hikes.

>> if you look at the momentum going into the fourth quarter, this seems to be good. we saw strong growth. we saw credit card spending increasing. the fees came down slightly. they were all going into the

records fees. i have been looking back. >> what about in terms of loan growth for 2022? can you give a sense of a can of growth you are expecting? you said this would be mid to higher single digits. >> it all depends on whether or not it continues. we are quiet confident it will be the high end of it. we are optimistic. there would be the others one

that we look at. they are quiet confident of running at the higher end of that ridge. >> talk us through the $4.9 billion price tag for these assets. how will you finance this acquisition? that is tremendous skill on the region itself.

this detects the level at the end. this is a level we are very comfy but with. -- comfortable with. that is something that we are looking at. commercial banks will struggle although margins will improve. basically looking at it, we see a similar effect and we are optimistic that it will propel us to another level.

>> it is helping you scale up. are there challenges in this transition? what are the assets? integration will be the biggest challenge. i think we are working toward rio torrey approval. this is the mixer that they approve for this bill. the customers will agree that we are able to serve them. that is something we are doing.

we are acquiring very good quality stuff. it is important that we work together to make sure that we have a bigger base. we are working hard. >> first, what is the vision, what is the goal or are you working with other countries?

we are interlocked with them. similarly we will be white interested in china who we think is a bit more advanced in that field. similarly, you see succession been opened up in thailand this year. kuester is a budget in singapore. what are you expected to hear from this upcoming budget? >> we are confident we will make

sure that the transition will not be too painful for the low end of the consumer. they are going through a lot of investment into scams and covid related. it does not put too much of a debt into the recovery. >> will that cause capital outflow to get out of singapore? >> you can argue -- i think there will be large growth.

it does not affect a majority of the people. that is the majority of the singapore risks. they don't give up the habit of savings. that is the import part of this recovery. i am sure they will consider all of this. >> thank you so much for joining us today. still to come on the show, the fintech startup has raised $59 million. week it's -- we speak is closely with the co-founder on what is next. this is bloomberg. ♪

>> welcome back. we are looking ahead to key stories investors are watching in india today. modi will speak at a summit, india has removed curbs on the number of flights and seats as part of their air bubble arrangement. india will tackle issues related

to the inclusion of sovereign debt and the global bond indexes. >> let's look at how india plays a key role in the economy. especially in the rural market. they are providing micro to small enterprises. thank you so much for joining us. congratulations on the funding. in terms of the vision here, what are some -- what focuses the area of growth?

>> like you so much for joining us. i am not so sure if you heard but tell us what areas you are focusing on in terms of growth. >> it would be heavily focused on these regions. scaling beyond the geographies we have been to. over investing in the leadership team and people across the

geographies to service the demand that is coming in. we are aiming to be profitable. given the omicron spread, we're looking forward to a very exciting 2022. >> you also had a target of a loan disbursement. can you update us on targets for the 2022 and 2023 year? >> the last two months, there were two factors. there was some bit of change in terms of the pandemic.

>> how do you plan to keep up the growth momentum? >> the most important thing to note is the size of the market. what we do is provide credit to retailers. what has been helping us so far has been not only the business model but the execution. it is a crowded market but at the same time, we have a depreciated product market -- as we are looking at how the focus is moving from the government to

the sector and the potential the sector holds, there is a lot more room to scale up. we are working with brent across fortune 500 companies and a $100 billion plus market. there is of course room for many players. at the same time for us, you want to continue on how we have scaled up and how we have executed. this helps us keep our head above the ground. >> there are crews including prepayment risks? they are still struggling to get out of the pandemic. how do you assess those risks? >> this is a model where we look at a lot of trading data. we don't rely on the reported data.

we rely on the trading ecosystem. we work with large companies. that allows us to build the writing process. the step one is to build a strong credit model. the second is the collection efficiencies. this is a focus on this birthing fund. we are ensuring the supply chain finance products. this allows us to get the portfolio in check. at the same time, we are able to build this over the loaves that we offer. this helps us to understand if there is any kind of diversion so we continue to monitor that.

given that we are providing credit to buy inventory from brand, that provides a significant challenge. some of these factors include the focus and execution. that is what keeps it interesting. >> thank you so much. coming up, china's new strategy to scout athletic talent not just a messerli from abroad brings the country a record number of gold medals in the winter liv-ex. we have details ahead, this is bloomberg. ♪

>> beijing's winter on the bags wrapped up this weekend. from diplomatic boycotts to straight code protocols and they are really capping the beijing liv-ex debut here and winning a gold in the halfpipe as well. obviously china is cheering that as well and whether this whole

strategy has been successful on their part, the spring in our china government reporter. how does china think about this event? >> absolutely. this has been the big news this morning. domestically i think there is no other way to describe it rather than just an amazing success perceived in china for these olympic games. they managed to keep covid within the bubble recently. there is already a gold medals. more than many of the predictions beforehand. also, record viewership because the games overlap with the chinese new year holiday. but internationally, it is almost the opposite. we saw nbc had to cut ads because viewership globally was so low and because of the

spotlight on china, it highlighted these issues to a much wider audience sup -- such as china's human rights track record and the allegations. athletes told to basically bring burner phones and while the covid zero policy is seen as a success here, it has also received a lot of criticism because of the human cost and many athletes not being able to purchase paid. -- participate. >> how has it been for china's american-born athletes? >> the most prominent example is leaned you -- is right here. she is not as everywhere in the city has she is on the wayward top trending items everyday but recently we have seen china -- chinese media become more careful in how they describe her

because there is this balance that everybody needs to walk. we have some -- there are some social media users that are referring to her as china's eileen gu. especially with a prominent editor saying that we don't know what she will pick in the future and no one actually knows she has both an american and a chinese passport. from the athlete perspective, there has been this comparison to global brands where there are preconditions to success in china and that often means not speaking out about social or political issues. >> thank you so much for that. let's look at how we are shaping up in the u.s. and the eu. we know we saw huge losses for the u.s., 2% down for the s&p

three. the nasdaq now pointing higher given that the u.s. and russia will be speaking next week. that is it from bloomberg markets: asia. daybreak middle east is next. keep with us. ♪

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>> from the heart of where innovation, money and power collide, from silicon valley and beyond, this is bloomberg technology with emily chang. >> i am emily chang in san francisco and this is bloomberg technology. bloomberg -- google takes on a new tack to tackle privacy launching a multiyear effort to overhaul its mobile ads more gradually and less abruptly than apple. plus meta drops out