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WORLD NEWSFriday 11 September 2015
Li says China to open currency market to central banks
BEIJING (AP) — China plans details of what foreign in- type institutions,” said Li at which rattled global finan- of the yuan, but buying
to allow foreign central stitutions would be allowed the World Economic Forum cial markets, was part of ef- and selling takes place in a
banks into its interbank cur- to do. The move follows in the eastern city of Dalian. forts to make the exchange separate market, accord-
rency market, the country’s Beijing’s decision in March Beijing controls the yuan’s rate more market-oriented. ing to Tan Yaling, director
No. 2 leader said Thursday, to allow some foreign in- exchange rate and limits Wider use of the yuan of the China Forex Invest-
in a new move to expand vestors into the market movement of money into would reduce costs for Chi- ment Research Institute.
use of the tightly controlled in which its state-owned and out of China but has na’s traders and encour- Until now, participants
Chinese yuan. banks trade bonds. been encouraging use of age sales of Chinese goods were mostly Chinese banks
Speaking at a busi- “In our next step, we will its yuan abroad, mostly for abroad, economists say. and a handful of foreign
ness conference, Premier open the interbank foreign trade. The central bank The interbank foreign ex- entities, said Tan, a for-
Li Keqiang gave no time exchange market to non- said its surprise Aug. 11 change market is used for mer Chinese central bank
frame for the change or mainland central bank- devaluation of the yuan, setting the exchange rate analyst.q
Bank of England indicates no hurry to raise key rates
PAN PYLAS Dark clouds move over London’s financial district Canary Wharf in London. The Bank of England members about the out-
Associated Press look for inflation. McCaf-
LONDON (AP) — The Bank provided no indication Thursday that it’s in a hurry to start raising borrowing rates, to the likely ferty justified his vote for
of England has kept its main a rate rise by noting that
interest rate unchanged at relief of homeowners and businesses. (AP Photo/Frank Augstein) costs for businesses are ris-
the record low of 0.5 per- ing, which could lead to
cent and provided no in- steady decline in unem- to U.K. growth and infla- world’s top industrial coun- inflation overshooting the
dication that it’s in a hurry ployment. tion.” These developments tries, notching up a quar- target in the medium term.
to start raising borrowing However, the prospect of merit “close monitoring,” it terly growth rate of 0.7 per- In conclusion, the com-
rates, to the likely relief of a rate hike this year ap- added. cent in the second quarter. mittee said that all mem-
homeowners and business- pears to have diminished Still, it said these have to The Bank of England’s man- bers agree that, “given
es. in the past few weeks fol- be “weighed against the date is to meet a 2 percent the likely persistence of
In minutes accompanying lowing the turmoil in global prospects for a continued annual inflation target in a the headwinds weighing
Thursday’s decision, the financial markets and low healthy domestic expan- way that helps to sustain on the economy, when
central bank said only one inflation rates. sion” that it says is under- growth and employment. Bank Rate does begin to
member of its nine-strong In its statement, the rate- pinned by rises in income, At last count, inflation was rise, it is expected to do so
rate-setting panel voted setting panel said the tur- supportive credit condi- just 0.1 percent in the year more gradually and to a
for a quarter point increase moil stoked by uncertainty tions and high economic to July. lower level than in recent
in the benchmark rate. Like over the Chinese economy confidence. In the statement, the com- cycles.” It stressed that this
last month, Ian McCafferty has “the potential to add Britain is one of the fast- mittee said there is a range guidance “is an expecta-
was the only member of to the global headwinds est-growing among the of views among the nine tion, not a promise” and
the Monetary Policy Com- that the actual interest
mittee, or MPC, to back an rate path will depend on
increase. economic circumstances.
The decision and the “It is global conditions
makeup of the vote was which are concerning poli-
the consensus view in the cymakers and tipping the
markets and the pound scales in favor of inaction,”
was left largely unmoved said Ben Brettell, senior
around $1.5415. economist at Hargreaves
The Bank of England is Lansdown.
widely expected to join The Bank of England’s main
the Federal Reserve in rais- interest rate has not been
ing interest rates sometime changed since March,
in the coming months giv- 2009. It’s at its lowest level
en the relative strength of since the bank was creat-
the British economy and a ed in 1694.q
Standard & Poor cuts Brazil’s sovereign debt to ‘junk’ status
BRAD BROOKS status that it held for seven grade nations, will auto- billion, meaning she tossed almost no political back-
Associated Press years was gone and that matically be yanked out to legislators the burden of ing, with her approval rat-
RIO DE JANEIRO (AP) — its outlook on the country of the country. figuring out where to make ing in the single digits, the
The Brazilian government’s was negative, just as the S&P said that extreme po- cuts. worst seen by any leader
sovereign debt rating was nation enters recession litical challenges for Rous- The downgrade, while since the nation’s return
cut Wednesday to “junk” and is expected to see an seff “have continued to widely expected, came to democracy three de-
status by one of the major even worse 2016. mount, weighing on the earlier than many analysts cades ago.
credit agencies, ratchet- That means that it will be government’s ability” to forecast and arrives at a S&P said that “the nega-
ing up pressure on Presi- far more expensive for shore up its finances as time of extreme volatility tive outlook reflects what
dent Dilma Rousseff to find the Brazilian government promised. for the Brazilian economy, we believe is a greater
a way out of an economic to tap international credit The downgrade comes on with inflation hovering than one-in-three likeli-
and political crisis. markets and that much in- the heels of Rousseff sub- around 10 percent and hood of a further down-
Standard & Poor’s said in vestor money, such as mu- mitting a budget to Con- unemployment the high- grade due to a further de-
a note that Brazil’s hard- tual funds that only plow gress that already had a est it has been in decades. terioration of Brazil’s fiscal
fought investment grade money into investment- built-in deficit of about $10 Additionally, Rousseff has position.”q
