TAIPEI - Taiwan will maintain a moderately loose monetary policy, according to Yang Chin-lung, Deputy Governor of Taiwan’s Central Bank. Yang was responding to comments by Eisuke Sakakibara, a Japanese economist, who suggested that Taiwan follow Japan by adopting a quantitative easing monetary policy to boost economic growth.
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HANOI - The State Bank of Vietnam is to cut its policy rate by another 100 basis points from May 13, with the refinance rate to fall to 7.00% from 8.00%.This follows a cumulative 700 basis points of cuts since mid-2012, the most recent being 100 basis points in late March. The SBV’s discount rate will follow, falling to 5.00% from 6.00%. ANZ Bank says a lower inflation trajectory had given the SBV space to ease monetary policy further.
RANGOON - The Myanmar Ministry of Energy is auctioning 30 oil and gas blocks in the Myanmar offshore areas. The auction invites bids for 11 shallow water blocks and 19 deep water blocks, to be conducted on a production-sharing basis with the Myanmar Oil and Gas Enterprise (MOGE). In a Client Note, lawyers Baker & McKenzie say the auction follows an announcement that 59 bidders had been shortlisted for the second round of the Myanmar onshore oil and gas block auctions which commenced in January 2013.
BEIJING - April trade growth in China rebounded more than expected, resulting in a surplus of US$8.2 billion (vs.a deficit of US$0.9 billion in March). Apart from a lower base effect, the import rebound was led by commodities such as iron ore, suggesting that investments remain strong. China's total exports excluding Hong Kong also picked up strongly to 6.8% y-o-y, from a contraction of 4.7% March. However, sequential growth for both exports and imports softened in April, and lower global PMIs suggest bigger external headwinds for export growth in the coming quarters. The level of growth beat expectations, rising to 14.7% y-o-y in April, compared to 10% y-o-y in March (consensus 10%), but seasonally- adjusted growth eased to 7.7% m-o-m from 11.8% m-o-m in March.
HONG KONG - Reinforcing expectations that China’s new leadership will press ahead with reforms, the State Council has laid out plans for implementation of planned reforms over he balance of this year. In addition to spurring private investment by streamlining the approvals process, the authorities are emphasising their plans to press ahead with reforms on the financial and fiscal fronts. They have vowed to push ahead with interest rate liberalisation, increase the flexibility of the exchange rate, and further open the capital account by allowing individuals to invest overseas.
BEIJING - The State Administration of Foreign Exchange (SAFE), China’s foreign exchange regulator, is introducing new rules to curb currency speculation as a part of efforts to control hot money inflows which have helped pushed the RMB to record highs. The regulations are intended to rein in excessive cross-border capital inflows through exporters and banks by tightening limits on long RMB positions that banks can hold for their own accounts.
SINGAPORE - Standard & Poor's Ratings Services today affirmed its unsolicited 'AAA' long-term and 'A-1+' short-term sovereign credit ratings on Singapore. The outlook remains stable, and the transfer and convertibility assessment remains 'AAA'. Also affirmed were Singapore’s 'axAAA' long-term and 'axA-1+' short-term ASEAN regional scale credit ratings.
NEW DELHI – The Reserve Bank of India (RBI) today cut its repo rate by 25 basis points to 7.25%, in line with market forecasts. The reverse repo rate automatically follows, decreasing to 6.25% from 6.50%. The RBI has now cut by 75 basis points in 2013. Also in line with expectations, the cash reserve ratio (CRR) remained unchanged at 4%. The CRR has remained unchanged since a 25bps reduction in January, designed to infuse liquidity into the banking system. The RBI set out three challenges for monetary policy going forward: to lift growth, prevent upward pressure on inflation expectations; and ensure liquidity allows adequate credit flow to the productive sectors of the economy.
SEOUL - Export growth for South Korea April – the region’s first monthly export numbers release - registered a disappointing 0.4% y/y (consensus: 2.0% y/y; prior 0.2%). BBVA Bank says the out-turn may be a harbinger of external headwinds for the rest of the region and, despite a better-than-expected Q1 GDP outturn (1.5% y/y), it could raise the likelihood of a rate cut by the Bank of Korea in coming months (the BoK has stayed on hold since October). Headline inflation in South Korea slowed to 1.2% y/y for April (consensus: 1.5%), well below the target range of 2.5-3.5%. www.bbva.com (ATI).
SINGAPORE – Ratings agency Standard & Poor’s has lifted its ratings for the Philippines, but at the same time effectively downgraded its assessment of Indonesia, saying that a stalling of reform momentum and a weaker external profile in Indonesia have diminished the potential for a rating upgrade over the next 12 months (Indonesia also faces an election next year).
SYDNEY - The relationship between Australian business and the Federal Government has further deteriorated, with a survey of Company Directors finding that only 8% of Directors (down from 12%) agree with the statement ‘the Federal Government understands business’. Conversely, 50% of Directors believe the Federal Opposition understands business.
SINGAPORE - Japan's latest effort to escape deflation and revive economic growth is a drastic departure from the policies of previous governments, but Standard & Poor's says there is more than one-third chance that it will lower its 'AA-' long-term sovereign ratings on the nation. The continuing prospect of a downgrade arises from risks associated with recent Government initiatives and uncertainty of their success, S&P says.
MELBOURNE - The Port of Melbourne Corporation has announced successful bidders for the right to operate its new automotive terminal and pre-delivery inspection hub on the western side of Webb Dock. Port of Melbourne is constructing a 920 m wharf and preparing land for private sector development. The automotive facilities are funded as part of an AUD1.6 billion Port Capacity Project to consolidate Victoria’s automotive import-export automotive handling at the Port of Melbourne.
TAIPEI - Chinese officials and scholars have called for non-official political dialogue between China and Taiwan as China’s former Commerce Minister, Chen Deming, becomes Head of the Chinese organisation responsible for dealing with Taiwan. Chen takes over from Chen Yunlin, who was appointed President of the Association for Relations Across the Taiwan Straits (ARATS) in June 2008. At the ARATS board meeting, Chen said: "As cross-strait relations go ever deeper, the two sides eventually will need to look for solutions to our difficult political problems. ARATS supports exchanges and discussions on political issues between academic institutions and related personnel, and it also supports political dialogue between private citizens on both sides." He used the Chinese term "min jian" to indicate the unofficial nature of such dialogue.
DOHA – The International Chamber of Commerce (ICC) today finalised recommendations for World Trade Organization (WTO) member countries to salvage parts of on-going Doha trade negotiations that could boost global GDP by US$960 billion. Several hundred business leaders and trade experts are meeting over four days for the ICC World Trade Agenda Summit, the first held in the Middle East.
TAIPEI - Export orders from Taiwan fell 6.6% y/y in March, following a 14.5% contraction in February and should be seen in the light of market expectations of a 1.9% increase, says ANZ Bank. In the first quarter as a whole, export orders declined 1.7% y/y. “The decline was broad based. Notably, orders from Japan saw the largest decline, down 15.6% y/y, suggesting the weakening JPY is starting to have an impact on export orders,” ANZ says. “At this stage, we believe the Central Bank will not engage in aggressive easing.