Central Bank Actions Dec 14, 2011

Norway’s central bank cut its key policy rate by half a percentage point, to 1.75%, in a bid to dampen the effects of financial market turbulence. Norges Bank said market funding for Norwegian banks has also “become more expensive and less accessible.”

International Monetary Fund, Xinhua Zhu Min, said here today that the European debt crisis by drag, slowing world economic growth, this will make the world’s estimated 27 million people into extreme poverty.

Zhu said, the past five, a series of low-income countries suffer from food crisis, financial crisis, and debt crisis in Europe as well as attacks. Face of the first two crises, as 10 to try to build “policy barriers” reduce the budget deficit, current account deficit and foreign debt, low-income country’s economy is still strong growth in sub-Saharan African countries such as 2010 the average economic growth rate reached 5.4%, the performance is quite good.

The Bank of England director Adam Posen said, the bank may need to expand the size of bond purchase program up to 100 billion pounds (about $ 158 billion) to the UK to support the economic recovery process.

Director Posen said in a speech today: “We should be in the next three years on the secondary market to buy at least 50 billion pounds (about $ 79 billion) debt, mainly tend to buy long term the national debt. In view of the future situation is likely to be due to external developments is expected to become worse, I propose a more ‘quantitative easing’ measures, the amount should be 750 million pounds (about 118.5 billion U.S. dollars), or 100 billion pounds. “

The Reserve Bank of Australia released a report today stating that, Central bank intervention in foreign exchange markets has only short-lived results that are of limited value, according to a report from.

The report reviews each period of intervention by the Reserve Bank of Australia since the nation’s currency was floated in 1983. It says the foreign-exchange market has evolved to where participants are now better equipped to manage their own risk. As a result, intervention has become less frequent and more targeted, and should be reserved chiefly for periods of market dysfunction.

The bank, using regression analysis, also gauges the effectiveness of its past interventions, concluding that the results illustrate the inherent limitations of intervention, which it says policymakers need to be aware of.

The Peoples Bank of China may continue to lower the reserve requirement ratio for banks and even cut interest rates next year, as the government shifts its policy priority toward stabilizing economic growth, the state-run China Securities Journal said in a front-page editorial Thursday.

“The growth rate of its money supply and the new Yuan loans issued by Chinese lenders in 2012 will likely increase moderately from 2011,” the influential financial newspaper wrote.

The editorial was in response to the conclusion Wednesday of the Central Economic Work Conference, a key annual policy setting meeting, during which the country’s top leaders pledged to maintain economic growth and social stability next year amid a deteriorating global economic climate.

The Reserve Bank of India, facing mounting evidence of slowing growth and risks of a spillover from the crisis in Europe, is widely expected to pause its monetary-tightening campaign on Friday.

But the rupee’s slide to record lows and persistent inflation pressures mean that unlike most emerging-markets central banks, the RBI isn’t expected to start cutting interest rates any time soon.

US Federal Reserve reiterated that the fed funds rate at zero to 0.25 percent level at least until mid-2013 the same, in order to stimulate employment and economic recovery in the United States.Announcing that they will continue to sell U.S. short-term government bonds, and buying mortgage-backed securities and reinvest the principal policies to buy more Fannie Mae, Freddie Mac and other institutions to issue agency mortgage-backed securities to help depressed real estate market.

European Central Bankpolicymaker Christian Noyer said on Thursday that a downgrade of France’s AAA credit rating would not be justified and ratings agencies are making decisions based more on politics than economics. may n$

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