US President Donald Trump abruptly stepped back on Wednesday from threats to impose tariffs as leverage to seize Greenland, ruled out the use of force and suggested a deal was in sight to end a dispute over the Danish territory that risked the deepest rupture in transatlantic relations in decades.

Traveling in Davos, Switzerland, Trump backed down, for now, from weeks of rhetoric that shook the NATO alliance and risked a new global trade war. Trump had threatened at the weekend to impose rising tariffs on eight European countries' US-bound exports.

But after meeting with NATO Secretary General Mark Rutte at the Swiss Alpine resort, Trump said Western Arctic allies could forge a new deal over the strategic island territory of 57,000 people that satisfies his desire for a "Golden Dome" missile-defense system and access to critical minerals while blocking Russia and China's ambitions in the Arctic.

"It's a deal that everybody's very happy with," Trump told reporters. "It's a long-term deal. It's the ultimate long-term deal. It puts everybody in a really good position, especially as it pertains to security and to minerals."

"It's a deal that's forever," he added.

Rutte later said the issue of whether Greenland will remain with Denmark did not come up in his talks with Trump.

"That issue did not come up anymore in my conversations tonight with the president," Rutte said in an interview on Fox News' "Special Report with Bret Baier" show.

"He (Trump) is very much focused on what do we need to do to make sure that that huge Arctic region - where change is taking place at the moment, where the Chinese and the Russians are more and more active - how we can protect it."

Scolding, dismissive threats

Trump earlier in the day had delivered more than an hour of scolding and dismissive threats aimed at countries already unnerved by his push to seize territory from a longtime US NATO ally.

European diplomats said the president's sudden shift in tone doesn't resolve the dispute but helps defuse an open rift between allies as they work to sort out their differences in private.

It remained unclear what kind of agreement could meet Trump's demands for outright "ownership" of a territory that its residents and leaders have said is not for sale.

"Negotiations between Denmark, Greenland, and the United States will go forward aimed at ensuring that Russia and China never gain a foothold - economically or militarily - in Greenland," a NATO spokesperson said.

No date or venue was provided for such negotiations. Trump said he had tasked Vice President JD Vance, Secretary of State Marco Rubio and envoy Steve Witkoff to take part in further discussions.

"What happens in Greenland is of absolutely no consequence to us," said Russian President Vladimir Putin, quoted by Russian news agencies speaking to the country's National Security Council.

Respect for Danish sovereignty, Greenland crucial: Denmark

Trump said on his Truth Social platform that the US and NATO had "formed the framework of a future deal with respect to Greenland and, in fact, the entire Arctic Region," and that "based upon this understanding, I will not be imposing the Tariffs that were scheduled to go into effect on 1 February."

It was the latest in a series of reversals of major policies or threats by Trump ahead of deadlines he has imposed during his second term in office.

Denmark said the issue should be handled through private diplomacy rather than on social media.

"What is crucial for us is that we get to end this with respect for the integrity and sovereignty of the kingdom (of Denmark) and the right of the Greenlandic people to self-determination," Denmark's Foreign Minister Lars Lokke Rasmussen told public broadcaster DR.

Rasmussen said he had spoken with Rutte but declined to provide details on what had been agreed.

Greenland's government did not reply to a request for comment.

Earlier in the day, the Republican US president acknowledged financial markets' discomfort with his threats and ruled out force in a speech to global elites at the World Economic Forum annual meeting.

"People thought I would use force, but I don't have to use force," Trump said. "I don't want to use force. I won't use force."

The change in posture sparked buying on Wall Street. The S&P 500 index posted its biggest one-day percentage gain in two months, adding 1.16% for the day. Trump's more hawkish comments on Greenland on Tuesday helped deliver the sharpest equities selloff in three months.

Trump dominates Davos agenda

Trump's Greenland comments dominated a whirlwind trip to Davos. Emboldened after a year in office that saw major institutions and allies bend to his will, Trump chastised Europeans on their soil on issues ranging from wind power and the environment to immigration and geopolitics.

He cast himself as a defender of Western values. "We want strong allies, not seriously weakened ones," Trump said. "I love Europe and I want to see Europe go good, but it's not heading in the right direction."

While he took the threat of force off the table for Greenland, Trump bragged about US military might, citing recent operations such as the shock ousting of Venezuela's Nicolas Maduro earlier this month.

Calling Denmark "ungrateful," the Republican US president played down the territorial dispute as a "small ask" over a "piece of ice" and said an acquisition would be no threat to the NATO alliance, which includes Denmark and the United States.

"No nation or group of nations is in any position to be able to secure Greenland other than the United States," said Trump, who four times during the speech mistakenly referred to Greenland as Iceland, another NATO member state.

"You can say yes, and we will be very appreciative, or you can say no, and we will remember."

Trump also used his speech to settle scores on other grievances. He rounded on Britain over extracting insufficient oil from the North Sea, Switzerland over its trade surplus in goods with the US, France over its pharmaceutical policy, Canada for what he saw as its ingratitude and NATO for its unwillingness to conform to US interests.

His remarks drew uncomfortable looks and light laughter from the audience in Davos, but most were silent.

His speech did notably less to address Trump's top domestic political challenge, the low marks voters give his handling of cost-of-living issues.

Though his aides had previewed an economic message, Trump was nearly an hour into the speech before he raised his newer initiatives to lower housing costs.

Sources familiar with the situation have previously told Reuters that Trump's push on Greenland is related to a legacy-building desire to expand the territory of the United States in the biggest way since Alaska and Hawaii became states in 1959.

On Thursday, Trump was expected to meet Ukrainian President Volodymyr Zelenskiy. As part of the trip, Trump was working to build support from dozens of world leaders to join his Board of Peace initiative aimed at resolving global conflicts, even as diplomats say it could harm the

Gold prices surged to a record ‌above $4,800 per ounce on Wednesday, as investors sought the metal as a safe haven following a broad selloff in US assets amid heightened tensions between the US and NATO over Greenland.

Spot gold climbed 2.1 percent to $4,862.19 per ounce by 0837 GMT, after scaling a record $4,887.82 earlier in ‌the session. US gold futures for February delivery climbed 2.2 percent to $4,869.40 per ​ounce.

“It’s the loss of trust in the US caused by Trump’s moves over the weekend to tariff European countries and increase coercion in trying to take Greenland. (The move in ‍gold) reflects fears about global geopolitical (tensions),” said Kyle Rodda, a senior market analyst at Capital.com.

On Tuesday, Trump said there was “no going back” on his goal to control Greenland, refusing to rule out taking the Arctic island by force and lashing out at NATO allies.

He later said, “we will work ‍something out where NATO is going to be very happy and where we’re going to be very ‌happy.” Meanwhile, ‌French President Emmanuel Macron said Europe would not give in to bullies or be intimidated, in a scathing criticism of Trump’s threat of steep tariffs at Davos.

“I think crossing $4,800 just reinforces that people don’t want to sell gold before $5,000. It’s a combination of the traditional supporters for gold, which is rising debt, ​a weakening dollar and geopolitical uncertainty,” said Nicholas Frappell, global head of institutional markets at ABC Refinery.

The dollar index languished at a near one-month low after White House threats over Greenland triggered a broad ‍selloff in US assets, from the currency to Wall Street stocks and Treasury bonds.

A weaker dollar makes greenback-priced metals cheaper for overseas buyers.

Oil prices fell on Wednesday as an expected build-up of US crude inventories outweighed a temporary halt in output at two large fields in Kazakhstan and geopolitical pressure from US threats of tariffs over its bid to gain control of Greenland.

Brent futures fell 97 cents, or 1.5 percent, to $63.95 a barrel at 0745 GMT. The US West Texas Intermediate crude contract lost 78 cents, or 1.3 percent, to trade at $59.58 a barrel.

Both contracts closed nearly $1 a barrel, or 1.5 percent higher, in the previous session after Opec+ producer Kazakhstan halted output at the Tengiz and Korolev oilfields on Sunday due to power distribution issues. Strong China economic data was also positive.

Oil production at the two Kazakh fields could be halted for another seven to 10 days, three industry sources told Reuters.

The oil output halt at Tengiz, one of the world’s largest oil fields, and Korolev is temporary, and downward pressure from an expected rise in US crude inventories along with geopolitical tension will persist, IG market analyst Tony Sycamore said on Wednesday.

US President Donald Trump’s promise of fresh tariffs on European nations if no deal for the US to gain control of Greenland was reached is adding pressure to the oil markets because the tariffs risk slowing economic growth.

Trump said on Tuesday there was “no going back” on his goal to control Greenland.

US crude oil and gasoline stockpiles were expected to have risen last week, while distillate inventories likely fell, a preliminary Reuters poll showed on Tuesday.

Six analysts polled by Reuters estimated on average that crude inventories rose by about 1.7 million barrels in the week to January 16.

The American Petroleum Institute weekly inventory data is due at 4:30 p.m. EST (2130 GMT) on Wednesday, and the Energy Information Administration, the statistical arm of the US Department of Energy, at 12 p.m. EST (1700 GMT) on Thursday, both a day later due to a US federal holiday on Monday.

As winter grips northern China, 72-year-old farmer He Wenxiang runs his gas boiler only occasionally to warm the bedroom radiator.

While that inventory growth would be negative for oil prices, Gregory Brew, senior analyst with the Eurasia Group consultancy, said the potential for US-Iran tensions to re-escalate would help elevate oil prices.

Trump threatened to strike Iran over its violent crackdown on anti-government protests earlier this month.

Any attack on Iranian Supreme Leader Ayatollah Ali Khamenei would trigger a declaration of jihad, or holy war, the Iranian Students’ News Agency quoted Iran’s national security parliamentary commission as saying on Tuesday.

“While the US demurred from striking Iran immediately, tensions are likely to remain high as additional US military assets move to the Middle East and diplomacy to de-escalate tensions fails to make progress,” Brew said in a note.

Global liquefied natural gas (LNG) output is set to jump this year, easing constraints seen since the 2022 Ukraine war and dampening prices, which could spur demand including from top importers China and India, analysts say.

This year marks the start of a large wave of supply that analysts expect to last until 2029, depressing prices that could drive more demand from emerging economies.

“2026 is expected to be a transitional year for the LNG market,” said Kpler. “The market is expected to move away from tightness toward ample availability, with sufficient supply even as winter demand and storage needs emerge, particularly in Europe.”

SUPPLY

Estimates from S&P Global Energy, Kpler and Rystad Energy forecast at least 35 million metric tons of new capacity coming online this year, primarily from the US and Qatar. This could lift global LNG supplies by up to 10 percent year-on-year, with 2026 supply forecasts from Kpler, Rystad, ICIS and Rabobank in a range of 460 million and 484 million metric tons.

Projects like Golden Pass LNG on the US Gulf Coast and Qatar’s North Field expansion are expected to contribute sizable volumes, while output is set to ramp up from Corpus Christi and Plaquemines LNG in the US, LNG Canada and the Greater Tortue Ahmeyim projects offshore Senegal and Mauritania.

The additional supply will pressure global prices, with analysts from Rabbobank, Rystad and Kpler predicting a range of averages for Asian spot LNG from $9.50 to $9.90 per million British thermal units (mmBtu) in 2026, down from an average of $12.45 in 2025.

Rystad and Kpler gave forecasts for gas prices at the Title Transfer Facility in the Netherlands, the European benchmark, to average in a range of $9.50 to $9.74 per mmBtu this year, down from an average of $14.20 in 2025.

With Asia LNG and European gas prices easing, price spreads to US benchmark Henry Hub will narrow, squeezing US LNG export margins at a time when feedgas costs are rising, said analysts at Vortexa, Rabobank and S&P Global Energy.

CHINA, INDIA TO DRIVE DEMAND

Asia’s LNG demand, which slipped in 2025 on price sensitivity and competition from alternative fuels, is forecast to recover by 4 percent to 7 percent this year led by China and India as lower prices spur additional spot purchasing, fuel switching and stockpiling, according to a range of outlooks from Rystad, Kpler and S&P Global Energy.

As winter grips northern China, 72-year-old farmer He Wenxiang runs his gas boiler only occasionally to warm the bedroom radiator.

New contracts will also add to rising imports, with Chinese demand expected to rise by 6 million to 7 million tons and Indian demand by 5 million tons, said Kpler analyst Nelson Xiong.

“Much of the new contracted supply should be absorbed domestically,” he said.

China’s 2025 imports slumped amid weak industrial demand, US tariffs, and strong domestic and piped gas supply. Demand this year is set to rise but may still fall short of 2024 levels, said Rystad Energy analyst Ole Dramdal, forecasting imports at 76.5 million tons this year, up 12 percent from 2025, as Beijing prioritizes domestic production.

However, a substantial surplus of China’s contracted volume will likely be remarketed as the country’s long-term LNG contracts are expected to reach above 80 million tons per year, Dramdal added, while Turkey, Malaysia and Taiwan will see their combined imports rise by 6.2 million tons in 2026.

EUROPE ABSORBS SUPPLY

Europe became a driver for global LNG demand after it cut Russian supply following Moscow’s full-scale invasion of Ukraine.

Kpler sees Europe’s 2026 LNG imports rising by 22 million tons while Rystad forecasts an increase of 20 million tons and Energy Aspects and ICIS see gains of around 13 million tons. This is driven by higher storage injection needs after lower end-of-winter inventories, higher domestic gas consumption amid softer average TTF prices, growing Turkish demand, and its role as a balancing market for rising Atlantic basin supply.

“Europe has been poised to absorb a large share of the new LNG supply, showing the strongest near-term incremental demand,” said Rystad’s Dramdal.

Europe will begin phasing out Russian piped gas and LNG this year, with analysts expecting LNG cargoes from the Yamal project to find alternative destinations like Turkey and Egypt, while Europe backfills the displaced volumes with Atlantic basin supply.

All three major Wall Street indexes ended Tuesday with their biggest one-day drops in three months, in a broad selloff triggered by concerns ‌that fresh tariff threats from President Donald Trump against Europe could signal renewed market volatility.

The risk-off trade was pervasive, helping vault gold to fresh record highs, and pushing up debt costs with US Treasuries wobbling under renewed selling pressure. Bitcoin, which can find favor when traditional markets waver, fell more than 3%.

All three US equity benchmarks registered their worst one-day performance since 10 October, with both the S&P 500 and Nasdaq Composite slipping below their 50-day moving averages.

The S&P 500 lost 143.15 points, or 2.06%, to ‌end at 6,796.86 points, while the Nasdaq Composite gave up 561.07 points, or 2.39%, to 22,954.32. The Dow Jones Industrial Average fell 870.74 points, or 1.76%, to 48,488.59.

Uncertainty rises

Tuesday was the first opportunity for US investors to act on Trump's weekend comments, given the market holiday for Martin Luther King, Jr. Day.

This included Trump saying additional 10% import tariffs would take effect on 1 February on goods from Denmark, Norway, Sweden, France, Germany, ‌the Netherlands, Finland and Great Britain — all already subject to US tariffs.

The tariffs would increase to 25% on 1 June and continue until a deal was reached for the US to purchase Greenland, Trump wrote in a post on Truth Social. Leaders of Greenland, an autonomous territory of Denmark, and Denmark have insisted the island is not for sale.

The reinjection of ⁠tariff threats into global markets harkens back to April's "Liberation Day," when Trump's levies on global trade partners pushed the S&P 500 to near bear market territory.

The ‍CBOE Volatility Index, also known as Wall Street's fear gauge, spiked to 20.09 points, its highest close since 24 November.

Trading volumes were also higher: around 20.6 billion shares changed ‌hands on ‌US exchanges on Tuesday, up from the 17.01 billion average for the last 20 trading days.

While investor sentiment was frayed on Tuesday, the question being asked is whether Greenland represents a knee-jerk selloff, or something that will have longer-term implications for markets.

Jamie Cox, managing partner at Harris Financial Group, said he was not seeing indications investors were fleeing.

"I'm not at the point yet where I'm willing to say what is happening with Greenland, and the resurgence of the tariff threat back ⁠and forth, is going to precipitate a ⁠correction in the equities markets," he said, adding he would be surprised if there was a 3% to 5% drop this week.

Bond markets spillover

A potentially more significant action, in Cox's eyes, would be whether Japanese authorities intervene in financial markets.

Japanese government bonds plunged on Tuesday, sending yields to record highs, while Tokyo stocks and the yen also fell after Prime Minister Sanae Takaichi's call for a ‍snap election shook confidence in the country's fiscal health.

The moves helped push the cost of longer-term European government bonds higher, while a selloff in US Treasuries was more pronounced on the long end of the curve.

Despite tariff talk, and notable bond movements, the US economy remains in a strong position.

Investors are due a host of fresh data this week on the state of the US economy, including the third-quarter US GDP update, January PMI readings and the Personal Consumption Expenditures ‍report, which is the Federal Reserve's preferred inflation gauge.

Earnings season is also kicking into higher gear, with several industry bellwethers set to report their quarterly earnings this week.

Among them was Netflix, which closed 0.8% lower before reporting earnings after the bell.

Gold surged past the $4,700 an ounce mark for the first time on Tuesday, and silver hovered just below a fresh record high, as global tensions sparked yet another rush to safety.

Spot gold gained 1.3 percent to $4,727.99 per ounce by 0910 GMT, having hit an all-time high of $4,731.34, while silver rose 0.7 percent to $95.34 an ounce, after hitting a record high of $95.488 earlier in the session.

US gold futures for February delivery climbed 3 percent to $4,734.10 per ounce.

US President Donald Trump threatened to impose increasing tariffs from February 1 on eight European countries until the US is allowed to buy Greenland, fuelling fears of a renewed trade war.

“Growth concerns driven by threats of additional tariffs and the desire of Trump to have lower US interest rates are the drivers pushing gold to a new record high,” said UBS analyst Giovanni Staunovo.

Gold has climbed 9.5 percent in just 20 days of this year and over 70 percent since Trump’s second term began a year ago. Geopolitical tensions have been at the forefront of the recent record rally, with expectations of monetary policy easing also playing a significant role. Strong central bank buying and ETF inflows have also contributed to the unprecedented rise.

Instability in policy and politics drives investors to store value in traditional safe havens like gold, while lower interest rates limit the downside of holding non-yielding assets.

Investors are also awaiting a decision on a Supreme Court case that could determine whether the president can dismiss Federal Reserve governors at will, concerning Trump’s attempts to fire Fed Governor Lisa Cook.

“We still see further upside for the yellow metal, targeting a price of $5,000/oz,” Staunovo said.

Chinese capital Beijing's GDP exceeded 5.207 trillion yuan (about 743.79 billion U.S. dollars) in 2025, up 5.4 per cent year on year, surpassing the 5 trillion yuan mark for the first time, according to the municipal statistics bureau.

Oil prices were steady on Tuesday as investors monitored US President Donald Trump’s threats of higher tariffs on European states over his drive to acquire Greenland, while firmer global economic growth expectations and better-than-expected economic data from China gave a floor to prices.

Brent futures for March shed ‌11 cents, or 0.17 percent, at $63.83 a barrel at 0918 GMT, while ​the US West Texas Intermediate crude contract for February was down 49 cents, or 0.8 percent, at $58.95.

Trump’s tariff threats over Greenland will not have an immediate impact on the ‍oil balance, said PVM analyst Tamas Varga, adding that prices gained support from an upward revision of this year’s global economic growth estimate by the International Monetary Fund and stronger diesel prices.

Fears of a renewed trade war escalated over the weekend after Trump said he would impose additional ‍10 percent levies from February 1 on goods imported from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland ‌and ‌Britain, rising to 25 percent on June 1 if no deal on Greenland was reached.

CHINA DATA SUPPORTS OIL

The oil market is also finding some support from better-than-expected fourth-quarter Chinese gross domestic product data released on Monday, said IG market analyst Tony Sycamore.

“This resilience in the world’s top oil importer provided a ​lift to demand sentiment,” he said.

China’s economy grew 5.0 percent last year, the data showed, while China’s in 2025 also climbed, edging up 4.1 percent year-on-year, while crude oil output grew 1.5 percent, data from ‍the world’s top oil importer showed on Monday.

Markets are also keeping a close eye on Venezuela’s oil sector after Trump said the US would run the industry after its capture of Nicolas Maduro.

Vitol offered Venezuelan ​oil to Chinese buyers at discounts of about $5 ‍per barrel to ICE Brent for April delivery, multiple trade sources said.

The dollar headed for its largest daily fall in over a month on Tuesday, after threats from the White House to Europe over the future of Greenland triggered a broad selloff across US stocks and government bonds, and drove the euro and the pound higher.

The dollar index , which measures the US currency's performance against a basket of six others, fell as much as 0.6 percent - marking its biggest one-day drop since mid-December - as investors worried about exposure to US markets.

On Monday, US President Donald Trump's renewed tariff threats against European allies triggered a repeat of the so-called "Sell America" trade that emerged after last year's "Liberation Day" tariff announcement in April, with stocks, Treasury bonds and the dollar all declining.

US markets will return on Tuesday following a public holiday for Martin Luther King Jr. Day.

Investors were dumping dollar assets on "fears of prolonged uncertainty, strained alliances, a loss of confidence in US leadership, potential retaliation and an acceleration of de-dollarisation trends," Tony Sycamore, market analyst at IG in Sydney, said.

"While there are hopes the US administration may soon de-escalate these threats, as it has with prior tariff announcements, it is clear that securing Greenland remains a core national security objective for the current administration," he added.

The euro rose 0.6 percent to $1.1719, while the pound gained 0.35 percent to trade at $1.3474. Sterling got a minor additional lift from UK labour market data that showed unemployment remained at a five-year high, but also offered positive signs such as vacancy numbers plateauing.

In terms of investor demand for euros, the "Sell America" effect could be short-lived, Barclays strategist Lefteris Farmakis suggested.
"Tariff threats are a marginal negative for the dollar in the near-term given long positions and still-low hedge ratios from a historical perspective. That said, major escalation with NATO spill-overs is a much bigger problem for the euro than Liberation Day," he said.

Gold climbed to a fresh record high today (20 January), scaling the unprecedented $4,700 ‌an ounce milestone as escalating geopolitical tensions boosted safe-haven demand, while silver also broke above $95 for the first time.

Spot gold gained 1.5% to $4,737.18 per ounce by 09:49am ET (14:49 GMT), after reaching a record high of $4,750.49 earlier in the day. US gold futures for February delivery climbed ‌3.2% to $4,742.70/oz. "Gold has surged deeper into uncharted territory as investors hedge ​against rising political risk," said Fawad Razaqzada, market analyst at City Index and FOREX.com.

"A softer dollar is providing an additional tailwind for precious metals, reinforcing gold's rally at a ‍time when confidence in US assets appears to be wobbling."

Wall Street's main indexes opened sharply lower today (20 January), as investors were spooked by renewed tariff threats from President Donald Trump against Europe over control of ⁠Greenland.

The remarks have heightened tensions ahead of Trump's expected meeting with global business leaders ‍in Davos, Switzerland, on Wednesday.

The US dollar was set for its largest daily fall in over a month, ‌making ‌greenback-priced gold more affordable for overseas buyers.

Gold, seen as a safe store of value during economic and political instability, soared 64% in 2025 and has added another 9.5% since the start of the year. The metal's rally has also been supported by expectations of ⁠US interest rate cuts, ⁠which reduce the opportunity ​cost of holding non-yielding bullion.

Markets are pricing in two rate cuts of 25-basis-points from mid-2026, while focus intensified after US Treasury Secretary Scott Bessent said Trump could name a new Federal Reserve chair as ‍early as next week.

"$4,800 and $4,900 are the next obvious reference points (for gold), with the key $5,000 handle standing out as the longer-term psychological target," Razaqzada added.

Spot silver slipped 0.3% to $94.37/oz, after hitting a record $95.87 earlier. ​The white metal added about 147% in 2025 ‍and has gained more than 34% since the start of 2026. Elsewhere, spot platinum added 2.8% to $2,440.94/oz, while palladium was ​down 0.7% at $1,828.39.

India's central bank has proposed that BRICS countries link their official digital currencies to make cross-border trade and tourism payments easier, two sources said, which could reduce reliance on the US dollar as geopolitical tensions rise.

The Reserve Bank of India (RBI) has recommended to the government that a proposal connecting the central bank digital currencies (CBDCs) be included on the agenda for the 2026 BRICS summit, the sources said. They requested anonymity because they were not authorised to speak publicly.

India will host the summit, which will be held later this year. If the recommendation is accepted, a proposal to link the digital currencies of BRICS members would be put forward for the first time. The BRICS organisation includes Brazil, Russia, India, China and South Africa, among others.

The initiative could irritate the US, which has warned against any moves to bypass the dollar.

US President Donald Trump has previously said the BRICS alliance is "anti-American" and he threatened to impose tariffs on its members.

The RBI, India's central government and the central banks of Brazil and Russia did not respond to emails seeking comment. The People's Bank of China said it had no information to share on the subject in response to a Reuters request for comment; the South African central bank declined to comment.

The RBI's proposal to link BRICS' CBDCs for cross-border trade finance and tourism has not been previously reported.

Building bridges

The RBI's proposal builds on a 2025 declaration at a BRICS summit in Rio de Janeiro, which pushed for interoperability between members' payment systems to make cross-border transactions more efficient.

The RBI has publicly expressed interest in linking India's digital rupee with other nations' CBDCs to expedite cross-border transactions and bolster its currency's global usage. It has, however, said its efforts to promote the rupee's global use are not aimed at promoting de-dollarisation.

While none of the BRICS members have fully launched their digital currencies, all five main members have been running pilot projects.

India's digital currency — called the e-rupee — has attracted a total of 7 million retail users since its launch in 2022 December, while China has pledged to boost the international use of the digital yuan.

The RBI has encouraged the adoption of the e-rupee by enabling offline payments, providing programmability for government subsidy transfers and by allowing fintech firms to offer digital currency wallets.

For the BRICS digital currency linkages to be successful, elements like interoperable technology, governance rules and ways to settle imbalanced trade volumes would be among the discussion topics, one of the sources said.

The source cautioned that hesitation among members to adopt technological platforms from other countries could delay work on the proposal and concrete progress would require consensus on tech and regulation.

One idea that is being explored to manage potential trade imbalances is the use of bilateral foreign exchange swap arrangements between central banks, both the sources said.

Previous attempts by Russia and India to conduct more trade in their local currencies hit roadblocks. Russia accumulated large balances of the Indian rupee for which it found limited use, prompting India's central bank to permit the investment of such balances in local bonds.

Weekly or monthly settlements for transactions are being proposed to be made via the swaps, the second source said.

Long road

Founded in 2009 by Brazil, Russia, India and China, BRICS later expanded to include South Africa and has since broadened further, adding newer members like the United Arab Emirates, Iran and Indonesia.

The bloc has returned to the limelight thanks to Trump's revived trade-war rhetoric and tariff threats, including warnings aimed at countries aligning with BRICS. At the same time, India has edged closer to Russia and China as it faced trade friction with the US.

Past efforts to turn BRICS into a major economic counterweight have run into hurdles, including an ambition to create a common BRICS currency, an idea that was floated by Brazil but was subsequently nixed.

While interest in CBDCs has been dampened globally by rising stablecoin adoption, India continues to position its e-rupee as a safer, more regulated alternative.

CBDCs "do not pose many of the risks associated with stablecoins," RBI Deputy Governor T Rabi Sankar said last month.

"Beyond the facilitation of illicit payments and circumvention of control measures, stablecoins raise significant concerns for monetary stability, fiscal policy, banking intermediation and systemic resilience," Sankar said.

India fears widespread stablecoin use could fragment national payments and weaken its digital payments ecosystem, Reuters reported in September.

The International Monetary Fund again edged its 2026 global growth forecast higher on Monday (19 January) as businesses and economies adapt to US tariffs that have eased in recent months and a continued AI investment boom that has fueled asset wealth and expectations of productivity gains.

The IMF in its World Economic Outlook update forecast global GDP growth at 3.3% in 2026, up 0.2 percentage point from its last estimate in October. That's even with 3.3% growth in 2025, which will also beat the October estimate by 0.1 percentage point, the IMF said.

The global crisis lender forecast 2027 growth at 3.2%, unchanged from the previous forecast. It has revised global growth rates higher since last July in response to trade deals that have reduced President Donald Trump's tariff rates that peaked in April 2025.

"We find that global growth remains quite resilient," IMF chief economist Pierre-Olivier Gourinchas told reporters, adding that the Fund's 2025 and 2026 growth forecasts now exceed predictions made in October 2024, before Trump was elected to a second term.

"So, in a sense, the global economy is shaking off the trade and tariff disruptions of 2025 and is coming out ahead of what we were expecting before it all started," Gourinchas said.
A digital illustration of the map of Bangladesh with a green upward-trending arrow and bar chart, alongside stacks of Bangladeshi Taka currency, symbolizing economic growth.

He said businesses have been able to adapt to higher US tariff rates by rerouting supply chains, while trade agreements have lowered some duties and China has shifted exports to non-US markets. The latest IMF forecasts assume an effective US tariff rate of 18.5% down from about 25% in the Fund's April 2025 forecast.

The IMF estimated US growth for 2026 at 2.4%, up 0.3 percentage point from October, due in part to a big push from massive investment in artificial intelligence infrastructure including data centers, powerful AI chips and power. The IMF edged its 2027 growth forecast a tenth of a point lower to 2.0%.

The IMF also said technology investment was boosting activity in Spain, which saw 0.3 percentage point upgrade to its 2026 GDP forecast to 2.3%, and in Britain, where the IMF kept its forecast unchanged at 1.3% for 2026.

Gourinchas said the AI boom poses risks for heightened inflation if it continues at its breakneck pace. But he added that if expectations that AI-driven productivity gains and profits are not realised, this could spark a correction in high market valuations that could crimp demand.

The IMF report lists AI as among risks that are tilted to the downside, along with disruptions to supply chains and markets from geopolitical tensions as well as new flare-ups in trade tensions.

A Supreme Court decision against Trump's broad tariffs under an emergency sanctions law, expected in coming days or weeks, "would inject another dose of trade policy uncertainty into the global economy" if Trump resurrects new tariffs under other trade laws, Gourinchas said.

But the IMF said that AI represents significant upside for the global economy if the investment surge leads to rapid adoption and productivity gains are realized and boost business dynamism and innovation.

"As a result, global growth may be lifted by as much as 0.3 percentage points in 2026 and between 0.1 and 0.8 percentage points per year in the medium-term, depending on the speed of adoption and improvements in AI readiness globally.

Among forecasts for other major economies, the IMF said China's 2026 growth would reach 4.5%, down from a stronger-than-expected 5.0% performance in 2025, but 0.3 percentage point higher than October estimates. The upgrade reflects a 10 percentage-point reduction in US tariff rates on Chinese goods for a year as well as continued diversion of exports to other markets such as Southeast Asia and Europe.

Gourinchas said that China risks running into more protectionist trade policies unless it develops a more balanced growth model that relies less on exports and more on internal demand.

Bangladesh economy to grow 4.6%, inflation to ease to 7.1% in FY26: UN report

The IMF forecast euro zone growth at 1.3% for 2026, up 0.1 percentage point from the October estimate, driven by increased public spending in Germany and stronger performances in Spain and Ireland. The Fund kept its 2027 euro zone growth forecast unchanged at 1.4%, noting that planned European increases in defence spending would materialise only in later years.

Japan also saw a slight upgrade to 2026 growth due to its new government's fiscal stimulus package, but Brazil was a notable outlier to the improvement trend, with a 0.3 percentage point reduction in its 2026 growth rate to 1.6% since October. IMF officials attributed the downgrade largely to tighter monetary policy needed to fight a flare-up in inflation last year.

The IMF said that globally, inflation was forecast to continue to decline, from 4.1% in 2025 to 3.8% in 2026 and 3.4% in 2027. Gourinchas said this leaves room for more accommodative monetary policy that will help underpin growth.

Portfolio outflows are likely to pressure the Indian rupee and government bonds this week, leaving the currency vulnerable to fresh lows and debt markets under strain, with the focus on debt supply.

The rupee closed at 90.8650 per dollar on Friday (16 January), down 0.7% week-on-week and inching closer to its all-time low of 91.0750 hit in December.

The currency has remained under pressure since steep US tariffs on Indian goods went into effect last year and investors reckon a turnaround in fortunes is unlikely in the absence of a breakthrough in negotiations between New Delhi and Washington.

"The single most important issue remains a comprehensive and balanced trade deal with the United States, probably at least partly dependent on an easing of the personal tensions between Indian PM Modi and US President Donald Trump," said Carl Vermassen, a portfolio manager in the emerging markets debt team at Zurich-based Vontobel Asset Management.

The trade limbo has also dulled the sheen of local stocks for foreign investors who have pulled out about $2 billion from local stocks over January so far, contributing to pressure on the rupee.

The dollar index, meanwhile, logged its third consecutive weekly gain on Friday, bolstered by fading odds of imminent rate cuts by the US Federal Reserve. While the data calendar is relatively light this week, the focus will be on US personal spending and GDP data.

Meanwhile, rupee traders will be assessing the fallout of the Greenland dispute on the dollar, US yields and risk appetitive. US President Donald Trump vowed to slap tariffs on eight European nations until the US is allowed to buy Greenland.

Bonds

The 10-year benchmark 6.48% 2035 yield settled at 6.6767% on Friday, up for a third consecutive week on supply worries and missing the bus for a global index inclusion.

Traders expect the yield to move in a 6.63%–6.72% range, with continued attention on the overall demand-supply scenario as well as the central bank's liquidity action.

Last Tuesday, Bloomberg Index Services deferred the inclusion of local bonds to its flagship Global Aggregate Index, which left market participants dejected as they were counting on foreign inflows amid worries over excess supply and elevated yields.

Vermassen, who expects inflows of $20 billion from the Bloomberg index inclusion, said it would not be a game-changer, with the impact being somewhat smaller, in relative terms, than the earlier inclusion in JPMorgan index.

Heavy weekly borrowing from the centre and states continues, with aggregate gross supply of 8 trillion rupees this quarter. This has pressured yields, leading to the spread widening between federal and state government debt.

"We expect spread to increase further given higher state debt supply and lower demand from market participants. We do not see any significant impact on central government bond yields," said Srinivas Rao Ravuri, chief investment officer at Bajaj Life Insurance.

The dollar fell on Monday as investors unnerved by ​US President Donald Trump's latest tariff threats against Europe over Greenland piled into the safe-haven yen and Swiss franc, ‌in a broad risk-averse move across markets.

Trump said over the weekend he would impose an additional 10 percent import tariff from February 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Britain, until the United States is allowed to buy Greenland.

Major European Union nations decried the Greenland tariff threats as blackmail on Sunday, with France proposing to respond with a range of previously untested economic countermeasures.

In the foreign exchange market, the knee-jerk reaction in ‌early Asia trade was to sell the euro and sterling , pushing the currencies to a seven-week low of $1.1572 ​and a one-month trough of $1.3321, respectively.

As the trading day got underway, both bounced from their lows, however, with the dollar coming under pressure as investors assessed the longer-term implications of Trump's latest move on the greenback.
That helped the euro reverse its losses, gaining 0.3 percent to trade ‍at $1.1634, while the British pound similarly recovered 0.16 percent to $1.3397.

"Typically you would think tariffs being threatened would lead to a weaker euro," said Khoon Goh, head of Asia research at ANZ.

"But, as we've seen last year as well, when the 'Liberation Day' tariffs were getting put in place, the impact in FX markets actually has ⁠been more towards dollar weakness every time there is heightened policy uncertainty emanating from the United States."

Investors had dumped the dollar after Trump ‍unveiled sweeping tariffs on the world last April, triggering a crisis of confidence in US assets.

A similar trend played out on Monday, as the greenback slid ‌0.45 percent against ‌the safe-haven Swiss franc to 0.7985, and was down 0.21 percent at 157.77 yen.

China's economy expanded five percent in 2025, Beijing said Monday, one of its slowest rates of growth in decades as it struggles with persistently low consumer spending and a debt crisis in its property sector.

Leaders set a growth target of "around five percent" for last year, following a five percent rise in 2024.

The economy grew at 4.5 percent between October and December last year, in line with expectations but marking a significant slowdown towards the end of the year.

While China's GDP grew enough for officials to declare victory, analysts warn that growth has been uneven and figures mask weak sentiment on the ground.

Chinese consumers remain jittery about the wider economy and high unemployment, even though officials have relaxed fiscal policy and subsidised the replacement of household items in a sputtering bid to boost spending.

Retail sales, a key indicator of consumption, rose 0.9 percent year-on-year in December -- the weakest pace since the end of 2022, when stringent zero-Covid measures ended.

Last month's sales were worse than the 1.3 percent year-on-year growth recorded in November, extending a months-long slowdown.

China's crucial property sector was once a major indicator of the country's economic strength.

But in recent years it has failed to overcome a flagging debt crisis despite rate cuts and loosened restrictions on homebuying.

Fixed-asset investments in China shrunk 3.8 percent year-on-year in 2025, an inevitable rebalancing following a property and infrastructure boom in recent decades.

Real estate investment was down 17.2 percent last year.

House prices have risen slightly in some large cities but the broader market remains sluggish.

Last year also saw the return of Donald Trump to the White House and the revival of a fierce trade war between the world's two largest economies.

Chinese President Xi Jinping and Trump reached a tentative truce to their fierce trade war when they met in late October, agreeing a pause to painful measures that included lofty tit-for-tat tariffs.

Official data showed Chinese exports to the United States plunged by 20 percent in 2025, but that had little impact on demand for Chinese products elsewhere.

Robust exports remained a bright spot in the cloudy economic picture despite that bruising trade war.

China's trade surplus hit a record $1.2 trillion last year, with officials lauding a "new historical high" filled by other trade partners.

Shipments to the ASEAN group of Southeast Asian nations rose 13.4 percent year-on-year, while exports to Africa saw 25.8 percent growth.

Exports to the European Union were also up 8.4 percent, though imports from the bloc dipped.

British Prime Minister Keir Starmer spoke to US President Donald Trump on Sunday after talking to the leaders of Denmark, the EU and NATO, to say he believed "applying tariffs on allies for pursuing the collective security of NATO allies is wrong".

A Downing Street spokesperson said Starmer held phone calls with Danish Prime Minister Mette Frederiksen, European Commission President Ursula von der Leyen and NATO Secretary General Mark Rutte. He then spoke to Trump.

"In all his calls, the prime minister reiterated his position on Greenland. He said that security in the High North is a priority for all NATO allies in order to protect Euro-Atlantic interests," the spokesperson said.

Gold and silver hit record highs Monday while most equity markets fell after Donald Trump revived trade war fears by threatening several European nations with tariffs over their opposition to the United States buying Greenland.

The US president has fanned already-rising geopolitical tensions this month by insisting that Washington would take control of the North Atlantic island, citing national security needs.

And on Saturday, after talks failed to resolve "fundamental disagreement" over the Danish autonomous territory, he announced he would hit eight countries with fresh levies over their refusal to submit to his demands.

He said he would impose 10 percent tariffs on Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland from February 1 -- rising to 25 percent from June 1 -- if they did not agree to the takeover.

The announcement drew an immediate response, with a joint statement from the countries saying: "Tariff threats undermine transatlantic relations and risk a dangerous downward spiral."

The move also threatened a trade deal signed between the United States and European Union last year, with German Foreign Minister Johann Wadephul telling ARD television: "I don't believe that this agreement is possible in the current situation."

Meanwhile, aides to French President Emmanuel Macron said he would ask the EU to activate a never-before-used "anti-coercion instrument" against Washington if Trump makes good on his threat.

This measure allows for curbing imports of goods and services into the EU, a market of 27 countries with a combined population of 450 million.

Bloomberg reported member states were discussing the possibility of retaliatory levies on €93 billion ($108 billion) of US goods.

The prospect of a trade war between the global economic heavyweights shook markets, with safe haven assets extending gains that had come on the back of Trump's threats against Iran last week and the US ouster of Venezuelan president Nicolas Maduro.

Gold, a key go-to in times of turmoil, hit a peak of $4,690.59, while silver struck $94.12.

On equity markets, Tokyo, Hong Kong, Shanghai, Sydney, Singapore and Wellington retreated, though there were gains in Seoul and Taipei.

European and US futures sank.

The dollar also retreated against its peers, with the euro, sterling and yen all higher.

"The next signpost is whether this moves from rhetoric to policy, and that is why the concrete dates matter," wrote Charu Chanana, chief investment strategist at Saxo Markets.

"On the European side, the decision path matters as much as the headline, because there is a difference between merely mentioning the anti-coercion instrument as a signal and formally pursuing it as action.

"Even if the immediate tariff threat gets negotiated down, the structural risk is that fragmentation keeps rising, with more politicised trade, more conditional supply chains, and higher policy risk for companies and investors."

There was little major reaction to data showing China's economy expanded five percent last year, in line with its target. However, growth in the final three months slowed sharply from the previous quarter.

Investors in Seoul and Taipei brushed off a warning from US Commerce Secretary Howard Lutnick that South Korean chipmakers and Taiwan firms not investing in the United States could be hit with 100 percent tariffs unless they boost output in the country.

- Key figures at around 0230 GMT -

Tokyo - Nikkei 225: DOWN 1.0 percent at 53,412.88 (break)

Hong Kong - Hang Seng Index: DOWN 0.7 percent at 26,670.01

Shanghai - Composite: DOWN 0.1 percent at 4,099.23

Euro/dollar: UP at $1.1628 from $1.1604 on Friday

Pound/dollar: UP at $1.3397 from $1.3382

Dollar/yen: DOWN at 157.54 yen from 158.07 yen

Euro/pound: UP at 86.79 pence from 86.69 pence

West Texas Intermediate: UP 0.1 percent at $59.52 per barrel

Brent North Sea Crude: FLAT at $64.15 per barrel

New York - Dow: DOWN 0.2 percent at 49,359.33 (close)

London - FTSE 100: FLAT at 10,235.29 (close)

Mining bosses like BHP’s Mike Henry should, in theory, be digging right now. Copper prices have surged 50 percent over the past year, topping $13,000 per metric ton on the London Metal Exchange on Thursday — well above the $11,000 mark that typically justifies constructing new mines. The catch? Soaring prices rarely stick.

Much of copper’s recent record rally reflects temporary factors. Traders are stockpiling ahead of potential US tariffs due in June, while top producers such as Rio Tinto and Freeport-McMoRan have cut their production forecasts because of idiosyncratic problems at key sites. The resulting squeeze has proved enough to drive short-term prices higher, but it may not last. Richer margins encourage more collection and processing of recycled copper, boosting supply over time. Tariff fears also cut both ways: if US President Donald Trump backs off, prices could tumble fast.

Questionable demand is another reason to think prices may fall. China still consumes roughly half of global copper, but the mix of uses is changing. Clean energy and electric vehicles are gaining share: Wood Mackenzie and Bernstein analysis see them making up 12 percent and 9 perecent of global demand, respectively, by 2030, while traditional sources of demand like construction lose steam. The problem is that the newer Chinese sectors remain exposed to policy shifts, implying a slowdown if Beijing shifts its priorities or successfully ends the clean-car sector’s chronic overcapacity. Globally, a much-heralded data centre boom may only help a little: the sector will account for just 1 percent of copper demand by 2030, according to Wood Mackenzie.

That uncertainty helps explain why miners like Anglo American and Teck Resources, or Glencore and Rio Tinto, are chasing M&A instead of breaking ground on new copper sites. The world needs a new supply, but the economics are tight. To make developing a mine economically sustainable, copper prices would have to stay at $11,000, according to consultant Wood Mackenzie. Price forecasts by Morgan Stanley suggest that between now and 2030 it will average around $10,700.

This would leave no room for miners to make a profit on new sites. And the real breakeven number may be higher after factoring in other challenges like securing water and labour, as well as possible permitting delays that can stretch over a decade, according to Morgan Stanley strategist Amy Gower.

Meanwhile, Wood Mackenzie estimates that meeting forecast 2035 demand will require over $210 billion in investment. Yet total capital investment in copper mining from 2019 to 2025 amounted to only around $76 billion. About half of that came from Chinese miners, followed by Russians.

There’s a geographic shift happening, too. The next wave of supply is moving beyond Latin America and Central Africa into regions like Central Asia, where countries such as Kazakhstan are closer to Beijing. For global miners, record prices are welcome. But in copper, that’s not always enough to justify putting a shovel in the ground.

Three-month forward copper prices on the London Metal Exchange reached a record $13,310 per metric ton on January 15.

Oil prices settled higher on Friday as some investors covered short positions ahead of the three-day Martin Luther King holiday weekend in the US and lingering worries about a possible US military strike against Iran.

Brent crude settled at $64.13 a barrel up 37 cents or 0.58 percent. US West Texas Intermediate finished at $59.44 a barrel up 25 cents, or 0.42 percent.

Most of Friday’s gains seemed to be due to buying supply ahead of the long weekend, said John Kilduff, partner with Again Capital LLC.

“With that carrier strike group making the move to the (Persian) Gulf, it doesn’t seem likely anything will happen soon,” Flynn said.

The US Navy’s aircraft carrier USS Abraham Lincoln was expected to arrive in the Persian Gulf next week after operating in the South China Sea.

Weighing against those fears are potential supply increases from Venezuela, said Phil Flynn, senior analyst with Price Futures Group.

“The supply from Venezuela has not become the tidal wave that was expected,” Flynn said. “Buying today seems to be people not wanting to be caught short over the long weekend.”

Both benchmarks hit multi-month highs this week after protests flared up in Iran and US President Donald Trump signalled the potential for military strikes, but lost over 4 percent on Thursday as Trump said Tehran’s crackdown on the protesters was easing, allaying concerns of possible military action that could disrupt oil supplies.

“Above all, there are worries about a possible blockade of the Strait of Hormuz by Iran in the event of an escalation, through which around a quarter of seaborne oil supplies flow,” Commerzbank analysts said in a note.

“Should there be signs of a sustained easing on this front, developments in Venezuela are likely to return to the spotlight, with oil that was recently sanctioned or blocked gradually flowing onto the world market.”

Analysts expect higher supply this year, potentially creating a ceiling for the geopolitical risk premium on prices.

“Despite the steady drumbeat of geopolitical risks and macro speculation, the underlying balance still points to ample supply,” said Phillip Nova analyst Priyanka Sachdeva.

“Unless we see a genuine revival in Chinese demand or a meaningful bottleneck in physical barrel flows, oil looks range-bound, with Brent broadly hovering between $57 and $67.”

President Donald Trump on Saturday vowed to implement a wave of increasing tariffs on European allies until the United States is allowed to buy Greenland, escalating a row over the future of Denmark's vast Arctic island.

In a post on Truth Social, Trump said additional 10% import tariffs would take effect on 1 February on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Great Britain — all already subject to tariffs imposed by Trump.

Those tariffs would increase to 25% on 1 June and would continue until a deal was reached for the US to purchase Greenland, Trump wrote.

TRUMP WANTS GREENLAND FOR SECURITY, MINERALS

The president has repeatedly said Greenland is vital to US security because of its strategic location and large mineral deposits, and has not ruled out using force to take it. European nations this week sent military personnel to the island at Denmark's request.

"These Countries, who are playing this very dangerous game, have put a level of risk in play that is not tenable or sustainable," Trump wrote.

"The United States of America is immediately open to negotiation with Denmark and/or any of these Countries that have put so much at risk, despite all that we have done for them, including maximum protection, over so many decades," he said.

Protesters in Denmark support Greenland after Trump's takeover threat

Protesters in Denmark and Greenland demonstrated on Saturday against Trump's demands and called for the territory to be left to determine its own future.

The countries named by Trump on Saturday have backed Denmark, warning that the US military seizure of a territory in NATO could collapse the military alliance that Washington leads. After the US president's social media post, Norway's top diplomat reiterated support for Denmark and said tariffs should not be part of Greenland discussions.

"There is broad agreement within NATO on the need to strengthen security in the Arctic, including in Greenland," Norway's Foreign Minister Espen Barth Eide said in a statement. "We do not think the question of tariffs belongs in this context."

Trump had floated the idea of tariffs over Greenland on Friday, without citing a legal basis for doing so.

TRADE DEALS UNDER THREAT?

Saturday's threat could derail tentative deals Trump struck last year with the European Union and Great Britain. The deals included baseline levies of 15% on imports from Europe and 10% on most British goods.

Europeans send troops to Greenland as Trump presses claim

Tariffs have become the US president's weapon of choice in seeking to compel American adversaries and allies alike to meet his strategic and economic demands.

Trump said this week he would put 25% tariffs on any country trading with Iran as that country suppressed anti-government protests, though there has been no official documentation from the White House of the policy on its website, nor information about the legal authority Trump would use.

The US Supreme Court has heard arguments on the legality of Trump's sweeping tariffs, and any decision by the top US judicial body would have major implications on the global economy and US presidential powers.

Citing threats from Russia and China, Trump has repeatedly insisted he will settle for nothing less than ownership of Greenland, an autonomous territory of Denmark. Leaders of both Denmark and Greenland have insisted the island is not for sale and does not want to be part of the United States.

Danish and other European officials have pointed out that as Greenland is part of NATO, it is already covered by the alliance's Article 5 collective security pact.

The US already has a military base, Pituffik Space Base, in Greenland, with around 200 troops, and can deploy as many more forces as it wants under a 1951 agreement.

That has led many European officials to conclude that Trump is motivated more by a desire to expand US territory than security concerns.