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Business

Global cenbanks lift rates by nearly 1,200 bps in July

Plastic letters arranged to read “Inflation” are placed on Chinese Yuan banknote in this illustration taken, June 12, 2022. REUTERS/Dado Ruvic/Illustration

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LONDON, Aug 3 (Reuters) – Major developed and emerging market central banks around the globe delivered nearly 1,200 basis points in interest rate hikes in July alone, ramping up their fight against multi-decade high inflation with Canada surprising markets with an outsized move.

Central banks overseeing five of the 10 most heavily traded currencies delivered 325 basis points of rate hikes between them last month. This brings the total volume of rate hikes since the start of the year across G10 central banks to 1,100 basis points.

However, July’s tally was less than the 350 basis points seven central banks delivered in June.

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“We’ve reached peak hawkishness of the central banks,” Christian Kopf, head of fixed income portfolio management at Union Investment, told Reuters.

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“Central banks have made it clear that they will not overdo it with the rate hikes,” Kopf said, adding that it was also the message conveyed by US Federal Reserve chair Jerome Powell.

July was dotted with some eye catching moves. Canada emerged as the chief hawk, stunning markets by delivering the first 100-basis-point rate increase among the world’s advanced economies in the current cycle, lifting its key policy rate to 1.5%.

New Zealand delivered its sixth straight interest rate rise and signaled it remained comfortable with its planned aggressive tightening path to restrain runaway inflation. read more

And then of course the big one: The Fed delivered its second straight 75-basis-point rate hike, reinforcing its commitment to contain red-hot inflation running at 40-year highs. read more

There was no let up for policymakers in emerging markets, where inflation had been on a tear for much longer than in developed economies.

Nine out of 18 central banks delivered 850 bps of rate hikes in July. In total, emerging market central banks have raised interest rates by 5,265 bps year-to-date – nearly double the 2,745 bps for the whole of 2021, calculations show.

“Emerging market central banks remain more worried about inflation than growth,” BofA’s David Hauner said in a recent note to clients.

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Hungary moved twice in July, jacking up its base rate by 300 basis points to 10.75% with borrowing costs into double-digit territory for the first time since late 2008 – and flagging more hikes ahead. read more

Colombia and Chile piled in with a 150 bps and 75 bps hike respectively, though emerging market uber-hawk Brazil, which has lifted rates to 13.25 bps already in June, took a breather.

However, emerging markets have also seen cuts with Russia reducing interest rates ratcheted up to 20% in the wake of its Feb. 24 invasion of Ukraine, which sparked sweeping sanctions. read more

Inflation pressures would remain a headache for policy makers, said Tobias Adrian, director at the Monetary and Capital Markets Department at the International Monetary Fund (IMF).

“The magnitude of the inflation has been a surprise to central banks and markets, and there remains substantial uncertainty about the outlook for inflation,” Adrian wrote in a blog on Monday.

“Inflation risks appear strongly tilted to the upside,” Adrian said, adding there was a substantial risk that price pressures were becoming entrenched and expectations unanchored.

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Reporting by Karin Strohecker and Vincent Flasseur in London, Additional reporting by Dhara Ranasinghe; Editing by Jacqueline Wong

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Categories
US

Chinese military begins ‘strategic’ drills around Taiwan – state media

A map showing locations where Chinese People’s Liberation Army (PLA) will conduct military exercises and training activities including live-fire drills is seen on newspaper reports of US House of Representatives Speaker Nancy Pelosi’s visit to Taiwan, at a newsstand in Beijing, China August 3 , 2022. REUTERS/Tingshu Wang

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BEIJING, Aug 4 (Reuters) – China’s People’s Liberation Army has begun military exercises including live firing on the waters and in the airspace surrounding the island of Taiwan, Chinese state television reported on Thursday.

The drills, spread out across six locations, are due to end at 12:00 pm (0400 GMT) on Sunday. The exercises followed US House of Representatives Speaker Nancy Pelosi’s visit to Taiwan, a trip condemned by Beijing, which claims the self-governed island as its own.

Significantly, in the north, east and south, the exercise areas bisect Taiwan’s claimed 12 nautical miles of territorial waters – something Taiwanese officials say challenges the international order and amount to a blockade of its sea and air space. read more

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The locations encircle the island in an unprecedented formation, Meng Xiangqing, a professor at the National Defense University, told Chinese state television, describing how an actual military operation against Taiwan could play out.

“In fact, this has created very good conditions for us when, in the future, we reshape our strategic landscape conducive to our unification,” Meng said.

Chinese forces in two areas off the northern coast of Taiwan could potentially seal off Keelung, a major port, while strikes could be launched from an area east of Taiwan targeting the military bases in Hualien and Taidong, he said.

The “doors” to Kaoshiung could also be closed by Chinese military off the southwestern coast, Meng said.

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Reporting by Ryan Woo; Editing by Jacqueline Wong & Simon Cameron-Moore

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US

Suspected drones over Taiwan, cyber attacks after Pelosi visit

  • Suspected drones fly over outlying Taiwanese islands
  • Defense ministry says its website attacked, briefly offline
  • Chinese military exercises, involving live-fire, set to begin
  • China says it’s an internal affair

TAIPEI, Aug 4 (Reuters) – Suspected drones flew over outlying Taiwanese islands and hackers attacked its defense ministry website, authorities in Taipei said on Thursday, a day after a visit by US House of Representatives Speaker Nancy Pelosi that outraged China.

China was to begin a series of military exercises around Taiwan on Thursday in response to Pelosi’s visit, some of which were to take place within the island’s 12-mile sea and air territory, according to the defense ministry in Taipei.

That has never happened before and a senior ministry official described the potential move as “amounting to a sea and air blockade of Taiwan”.

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China, which claims Taiwan as its own territory, said on Thursday its differences with the self-ruled island were an internal affair. read more

“Our punishment of pro-Taiwan independence diehards, external forces is reasonable, lawful,” China’s Taiwan Affairs Office said.

China’s Xinhua news agency has said the exercises, involving live fire drills, will take place in six areas which ring Taiwan and will begin at 0400 GMT.

On Wednesday night, just hours after Pelosi left for South Korea, unidentified aircraft, probably drones, had flown above the area of ​​the Kinmen islands, Taiwan’s defense ministry said. read more

Major General Chang Zone-sung of the army’s Kinmen Defense Command told Reuters that the drones came in a pair and flew into the Kinmen area twice on Wednesday night, at around 9 pm (1300 GMT). and 10 p.m.

“We immediately fired flares to issue warnings and to drive them away. After that, they turned around. They came into our restricted area and that’s why we dispersed them,” he said.

The heavily fortified Kinmen islands are just off the southeastern coast of China, near the city of Xiamen.

The defense ministry also said its website suffered cyber attacks and went offline temporarily late on Wednesday night, adding it was working closely with other authorities to enhance cyber security as tensions with China rise. read more

Pelosi, the highest-level US visitor to Taiwan in 25 years, praised its democracy and pledged American solidarity during her brief stopover, adding that Chinese anger could not stop world leaders from traveling there.

China summoned the US ambassador in Beijing and halted several agricultural imports from Taiwan.

Security in the area around the US Embassy in Beijing remained unusually tight on Thursday as it has been throughout this week.

Although Chinese social media users have vented fury on Pelosi, there were no signs of significant protests or calls to boycott US products.

‘WILL NOT LEAVE TAIWAN’

Taiwan scrambled jets on Wednesday to warn away 27 Chinese aircraft in its air defense zone, the island’s defense ministry said, adding that 22 of them crossed the median line separating the island from China. read more

Pelosi arrived with a congressional delegation on her unannounced but closely watched visit late on Tuesday, defying China’s repeated warnings and amid sharply deteriorating US-Chinese relations.

“Our delegation came to Taiwan to make unequivocally clear that we will not abandon Taiwan,” Pelosi told Taiwan’s President Tsai Ing-wen, who Beijing suspects of pushing for formal independence – a red line for China. read more

“Now, more than ever, America’s solidarity with Taiwan is crucial, and that’s the message we are bringing here today.”

China considers Taiwan part of its territory and has never renounced using force to bring it under its control. The United States and the foreign ministers of the Group of Seven nations warned China against using the visit as a pretext for military action against Taiwan.

“Sadly, Taiwan has been prevented from participating in global meetings, most recently the World Health Organization, because of objections by the Chinese Communist Party,” Pelosi said in a statement issued after her departure.

“While they may prevent Taiwan from sending its leaders to global forums, they cannot prevent world leaders or anyone from traveling to Taiwan to pay respect to its flourishing democracy, to highlight its many successes and to reaffirm our commitment to continued collaboration,” Pelosi added . read more

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Reporting by Yimou Lee; Additional reporting by Tony Munroe; Writing by Raju Gopalakrishnan; Editing by Simon Cameron-Moore

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Categories
US

Pelosi offers praise, support for Taiwan during a visit that angered China

  • Pelosi tells President Tsai “we will not abandon Taiwan”
  • China steps up military activity around Taiwan
  • Taiwan’s military increases alertness level
  • China summoned US ambassador in Beijing

TAIPEI, Aug 3 (Reuters) – US House of Representatives Speaker Nancy Pelosi left Taiwan on Wednesday after pledging solidarity and hailing its democracy, leaving a trail of Chinese anger over her brief visit to the self-ruled island that Beijing claims as its own.

China demonstrated its outrage over the highest-level US visit to the island in 25 years with a burst of military activity in surrounding waters, summoning the US ambassador in Beijing and halting several agricultural imports from Taiwan.

Some of China’s planned military exercises were to take place within Taiwan’s 12 nautical mile sea and air territory, according to Taiwan’s defense ministry, an unprecedented move a senior defense official described to reporters as “amounting to a sea and air blockade of Taiwan”.

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Taiwan scrambled jets on Wednesday to warn away 27 Chinese aircraft in its air defense zone, the island’s defense ministry said, adding that 22 of them crossed the median line separating the island from China. read more

Pelosi arrived with a congressional delegation on her unannounced but closely watched visit late on Tuesday, defying China’s repeated warnings, in a trip that she said demonstrated an unwavering US commitment to Taiwan’s democracy. read more

“Our delegation came to Taiwan to make unequivocally clear that we will not abandon Taiwan,” Pelosi told Taiwan President Tsai Ing-wen, who Beijing suspects of pushing for formal independence – a red line for China. read more

“Now, more than ever, America’s solidarity with Taiwan is crucial, and that’s the message we are bringing here today,” Pelosi said during her roughly 19-hour visit.

A long-time China critic, especially on human rights, Pelosi met with a former Tiananmen activist, a Hong Kong bookseller who had been detained by China and a Taiwanese activist recently released by China.

The last US House speaker to go to Taiwan was Newt Gingrich in 1997. But Pelosi’s visit comes amid sharply deteriorating Sino-US relations, and during the past quarter century China has emerged as a far more powerful economic, military and geopolitical force.

China considers Taiwan part of its territory and has never renounced using force to bring it under its control. The United States warned China against using the visit as a pretext for military action against Taiwan.

In retaliation, China’s customs department announced a suspension of imports of citrus fruits and certain fish – chilled white striped hairtail and frozen horse mackerel – from Taiwan, while its commerce ministry banned export of natural sand to Taiwan.

While there was little sign of protest against US targets or consumer goods, there was a significant police presence outside the US consulate in Shanghai and what appeared to be more security than usual outside the embassy in Beijing.

Fury on the mainland over Pelosi’s defiance of Beijing was evident all over Chinese social media, with one blogger railing: “this old she-devil, she actually dares to come!” Pelosi is 82. read more

MILITARY DRILLS

Shortly after Pelosi’s arrival, China’s military announced joint air and sea drills near Taiwan and test launches of conventional missiles in the sea east of the island, with Chinese state news agency Xinhua describing live-fire drills and other exercises around Taiwan from Thursday to Sunday.

China’s foreign ministry said Pelosi’s visit seriously damages peace and stability in the Taiwan Strait, “has a severe impact on the political foundation of China-US relations, and seriously infringes upon China’s sovereignty and territorial integrity.”

Before Pelosi’s arrival, Chinese warplanes buzzed the line dividing the Taiwan Strait. The Chinese military said it was on high alert and would launch “targeted military operations” in response to Pelosi’s visit.

White House national security spokesperson John Kirby said after Pelosi’s arrival in Taiwan that the United States “is not going to be intimidated” by China’s threats or bellicose rhetoric and that there is no reason her visit should precipitate a crisis or conflict.

US Secretary of State Antony Blinken discussed the potential for Pelosi’s visit with counterpart Wang Yi during a G20 meeting in Bali last month, and said any such trip would be entirely Pelosi’s decision and independent of the US government, a senior US official said on Wednesday. read more

‘CHINA’S AMBITION’

The United States has no official diplomatic relations with Taiwan but is bound by American law to provide it with the means to defend itself. China views visits by US officials to Taiwan as sending an encouraging signal to the pro-independence camp on the island. Taiwan rejects China’s sovereignty claims, saying only the Taiwanese people can decide the island’s future.

Russian Foreign Minister Lavrov said during a visit to Myanmar that Pelosi’s trip was a deliberate US attempt to irritate China. read more

North Korea’s foreign ministry criticized Pelosi’s visit as US “reckless interference” in China’s internal affairs, the official KCNA said. read more

Taiwan’s military increased its alertness level. Its defense ministry said China was attempting to threaten key ports and cities with drills in the surrounding waters.

“The so-called drill areas are falling within the busiest international channels in the Indo-Pacific region,” a senior Taiwan official familiar with its security planning told Reuters.

“We can see China’s ambition: to make the Taiwan Strait non-international waters, as well as making the entire area west of the first island chain in the western pacific its sphere of influence,” the official said.

China’s foreign ministry said it has not seen its military drills around Taiwan causing any freedom-of-navigation issues.

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Reporting by Yimou Lee and Sarah Wu; Writing by Tony Munroe; Editing by Simon Cameron-Moore, Stephen Coates and Will Dunham

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Categories
Technology

SK Hynix says has developed its most advanced 238-layer storage chip

Employees walk past the logo of SK Hynix at its headquarters in Seongnam, South Korea, April 25, 2016. REUTERS/Kim Hong-Ji

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SEOUL, Aug 3 (Reuters) – South Korea’s SK Hynix Inc (000660.KS) has developed its most advanced NAND flash chip made up of 238 layers of memory cells for use in PC storage devices and later smartphones and servers, the world’s second- largest memory chip maker said on Wednesday.

SK Hynix described it as the “industry’s highest” NAND flash chip and it follows US rival Micron Technology Inc (MU.O) saying last week it had begun shipping a 232-layer NAND chip. read more

SK Hynix said the new 238-layer chip is the smallest NAND flash chip in size, boasts a 50% improvement in data transfer speed over previous generation chips and power efficiency as well, as it cuts the volume of energy consumed for data reading by 21 %.

The company plans to start mass production of the chip in the first half of 2023.

SK Hynix and Solidigm, the new name of Intel’s NAND business which SK acquired, hold a combined 18% share of the NAND flash market, behind Samsung Electronics with 35.3% and Kioxia with 18.9%, according to first-quarter data from TrendForce.

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Reporting by Joyce Lee; editing by Jason Neely

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Categories
US

US jet that flew Pelosi to Malaysia tracked off Philippines, no landing request

US House of Representatives Speaker Nancy Pelosi and Malaysia’s Parliament Speaker Azhar Azizan Harun pose for photographs during their meeting at Malaysian Houses of Parliament in Kuala Lumpur, Malaysia, August 2, 2022. Malaysian Department of Information/Famer Roheni/Handout via REUTERS

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KUALA LUMPUR, Aug 2 (Reuters) – A US air force jet that flew House of Representatives Speaker Nancy Pelosi to Malaysia left the country on Tuesday and flew close to the Philippines, in the day’s most followed flight on tracking site Flightradar24.

Reuters could not immediately establish if Pelosi or her delegation were on flight SPAR19, but authorities in the Philippines, a US ally, said no request had been received from the United States for her to visit or transit in the country.

The plane left Kuala Lumpur at 3:42 pm (0742 GMT) and flew east towards Borneo on a route that skirted the South China Sea.

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It was last seen on the tracker off the southernmost Philippine region of Mindanao, however, flying along the country’s Pacific east coast.

Pelosi was expected to arrive in Taipei later on Tuesday, sources said earlier. read more

Like SPAR19, a second US air force plane arrived in Kuala Lumpur on Tuesday morning. According to Flightradar24, SPAR20 had not left the Malaysian capital.

A visit to Taiwan by Pelosi, who is second in the line of succession to the US presidency and a long-time critic of China, would come amid worsening ties between Washington and Beijing.

She has not confirmed if she would visit the self-governed island which Beijing claims as its own.

Both the Philippines air force and its Department of Foreign Affairs (DFA) said they had received no word from the United States that Pelosi might land in the country on Tuesday.

“The DFA has not received any request from the US government or their embassy in Manila for Speaker Pelosi to transit and/ or visit the Philippines as part of her current swing of visits to the region,” the DFA said in a text message to reporters .

As of 1130 GMT, SPAR19 was flying just south of the Philippines, according to Flightradar24, in a route tracked by as many as 300,000 people on its website.

A normal flight from Kuala Lumpur to Taiwan’s capital of Taipei would cross the South China Sea, with a typical flight time of under five hours.

Since last week, China’s People’s Liberation Army has conducted various exercises, including live fire drills, in the South China Sea, Yellow Sea and Bohai Sea, in a show of Chinese military might.

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Reporting by Ebrahim Harris and Rozanna Latiff in Kuala Lumpur and Ryan Woo in Beijing; Additional reporting by Neil Jerome Morales in Manila; Editing by Martin Petty, William Maclean

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Categories
US

Al Qaeda leader Zawahiri killed in US drone strike in downtown Kabul

  • Zawahiri tracked to safe house in Kabul
  • Hit by Hellfire missile while standing on balcony
  • “This terrorist leader is no more” – Biden
  • Taliban “grossly violated” Doha Agreement – Blinken

KABUL/WASHINGTON, Aug 2 (Reuters) – The United States killed al Qaeda leader Ayman al-Zawahiri in a “precision” strike in the center of Kabul, the Afghanistan capital, President Joe Biden said, the biggest blow to the militant group since its founder Osama bin Laden was killed in 2011.

Zawahiri, an Egyptian surgeon who had a $25 million bounty on his head, helped coordinate the Sept. 11, 2001, attacks that killed nearly 3,000 people.

US officials, speaking on the condition of anonymity, said Zawahiri was killed when he came out on the balcony of his safe house in Kabul on Sunday morning and was hit by “hellfire” missiles from a US drone.

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“Now justice has been delivered, and this terrorist leader is no more,” Biden said in remarks from the White House on Monday. “No matter how long it takes, no matter where you hide, if you are a threat to our people, the United States will find you and take you out.”

He said he had authorized the precision strike in downtown Kabul and that no civilians were killed.

Three spokespeople in the Taliban administration in Kabul declined comment on Zawahiri’s death.

Taliban spokesperson Zabihullah Mujahid had previously confirmed that a strike took place in Kabul on Sunday and strongly condemned it, calling it a violation of “international principles.”

A spokesperson for the interior ministry said a house was hit by a rocket in Sherpoor, an upscale residential neighborhood of the city which also houses several embassies.

“There were no casualties as the house was empty,” Abdul Nafi Takor, the spokesperson, said.

Taliban authorities threw a security dragnet around the house in Sherpoor on Tuesday and journalists were not allowed nearby.

A senior Taliban official told Reuters that Zawahiri was previously in Helmand province and had moved to Kabul after the Taliban took over the country in August last year.

US intelligence determined with “high confidence” through multiple intelligence streams that the man killed was Zawahiri, one senior administration official told reporters.

“Zawahiri continued to pose an active threat to US persons, interests and national security,” the official said on a conference call. “His death of him deals a significant blow to al Qaeda and will degrade the group’s ability to operate.”

Zawahiri succeeded bin Laden as al Qaeda leader after years as its main organizer and strategist, but his lack of charisma and competition from rival militants Islamic State hobbled his ability to inspire devastating attacks on the West. read more

There were rumors of Zawahiri’s death several times in recent years, and he was long reported to have been in poor health.

SANCTUARY

Osama bin Laden sits with his adviser Ayman al-Zawahiri, an Egyptian linked to the al Qaeda network, during an interview with Pakistani journalist Hamid Mir (not pictured) in an image supplied by Dawn newspaper November 10, 2001. Hamid Mir/Editor/ Ausaf Newspaper for Daily Dawn/Handout via REUTERS/File Photo

The drone attack is the first known US strike inside Afghanistan since US troops and diplomats left the country in August 2021. The move may bolster the credibility of Washington’s assurances that the United States can still address threats from Afghanistan without a military presence in the country.

His death also raises questions about whether Zawahiri received sanctuary from the Taliban following their takeover of Kabul in August 2021. The official said senior Taliban officials were aware of his presence in the city and said the United States expected the Taliban to abide by an agreement not to allow al Qaeda fighters to re-establish themselves in the country.

“The Taliban will have to answer for al-Zawahiri’s presence in Kabul, after assuring the world they would not give safe haven to al-Qaeda terrorists,” Adam Schiff, chairman of the House Permanent Select Committee on Intelligence, said in a statement.

US Secretary of State Antony Blinken said the Taliban had “grossly violated” the Doha Agreement between the two sides by hosting and sheltering Zawahiri.

Former President Barack Obama joined lawmakers in praising the operation.

“Tonight’s news is also proof that it’s possible to root out terrorism without being at war in Afghanistan,” Obama said in a Twitter message. “And I hope it provides a small measure of peace to the 9/11 families and everyone else who has suffered at the hands of al Qaeda.”

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Republican US Senator Marco Rubio said: “The world is safer without him in it and this strike demonstrates our ongoing commitment to hunt down all terrorists responsible for 9/11 and those who continue to pose a threat to US interests.” said

Until the US announcement, Zawahiri had been rumored variously to be in Pakistan’s tribal area or inside Afghanistan.

A video released in April in which he praised an Indian Muslim woman for defying a ban on wearing an Islamic head scarf dispelled rumors that he had died.

The senior US official said finding Zawahiri was the result of persistent counter-terrorism work. The United States found out this year that Zawahiri’s wife, daughter and her children had relocated to a safe house in Kabul, then identified that Zawahiri was there as well, the official said.

“Once Zawahiri arrived at the location, we are not aware of him ever leaving the safe house,” the official said. He was identified multiple times on the balcony, where he was ultimately struck. He continued to produce videos from the house and some may be released after his death, the official said.

In the last few weeks, Biden agreed to officials to scrutinize the intelligence. He was updated throughout May and June and was briefed on July 1 on a proposed operation by intelligence leaders. On July 25 I received an updated report and authorized the strike once an opportunity was available, the administration official said.

With other senior al Qaeda members, Zawahiri is believed to have plotted the October 12, 2000, attack on the USS Cole naval vessel in Yemen which killed 17 US sailors and injured more than 30 others, the Rewards for Justice website said.

He was indicted in the United States for his role in the August 7, 1998, bombings of the US embassies in Kenya and Tanzania that killed 224 people and wounded more than 5,000 others.

Both bin Laden and Zawahiri eluded capture when US-led forces toppled Afghanistan’s Taliban government in late 2001 following the Sept. 11 attacks on the United States.

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Reporting by Idrees Ali and Jeff Mason; Additional reporting by Alexandra Alper, Eric Beech, Jonathan Landay, Arshad Mohammed, Patricia Zengerle, Matt Spetalnick in Washington, Jibran Ahmad in Peshawar and Reuters staff in Kabul; Writing by Raju Gopalakrishnan; Editing by Stephen Coates

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