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Thailand’s
Surprise Rate Cut Shows Worsening Asia Outlook
Thailand’s
central bank voted to cut interest rates four days after Governor
Prasarn Trairatvorakul said no easing was needed, adding to evidence
Asia’s outlook has worsened and supporting a government push to
shore up growth.
The
Bank of Thailand lowered its one-day bond repurchase rate by a
quarter of a percentage point to 2.75 percent, it said in Bangkok
yesterday. The decision was predicted by three of 23 economists in a
Bloomberg News survey, while the rest expected no change. The
monetary policy committee voted 5-2 in favor of a cut, it said in a
statement, without disclosing names.
Thailand’s
exports have slumped as a growth slowdown in China and austerity
measures in Europe hurt demand for Asian goods, prompting South Korea
to lower borrowing costs while the Philippines said it won’t rule
out further easing. The Thai central bank said there was no political
interference in yesterday’s decision, seeking to distance its
action from Finance Minister Kittiratt Na-Ranong’s call for lower
rates and a weaker baht to help exporters.
Germany
chops 2013 growth forecast on euro crisis
Two
years after expanding at its fastest rate since reunification,
Germany's economic growth is seen at just 1 percent next year,
finally hit by the euro zone crisis that has hammered most of its
partners.
The
government chopped its 2013 growth forecast on Wednesday to 1
percent, down from a 1.6 percent forecast in April. For this year,
the economy ministry expects growth of 0.8 percent, up from 0.7
percent in April.
Cyprus
Expects Swift Bailout as S&P Cuts Deeper to Junk
Cyprus
said on Wednesday it expected talks to start with lenders on badly
needed aid next week, as ratings agency Standard & Poor's pushed
it deeper into junk territory, implying domestic political expediency
lay behind a delay in clinching a deal.
One
of the smallest nations in the euro zone, Cyprus sought European
Union (EU) and International Monetary Fund (IMF) aid in June after
its two largest banks suffered huge losses due to a write-down of
Greek debt.
A
conclusion with lenders on aid has been plagued by delays as the
island's government attempted to get the public onside with an
austerity package pending since July.
Japan-China
island spat hurts both as aluminum demand slows
The
spat between Japan and China over the East China Sea islands was
hurting both countries' economies, and the effects of this dispute
has begun to trickle down to impact various industrial sectors,
including the aluminum market, industry sources said this week.
The
declining sales of Japanese cars and electronic appliances in China
were affecting Japanese manufacturers, the Chinese metal suppliers
and others down the supply chain.
The
current slowdown in Japanese car sales in China has lowered demand
for ADC12 aluminum alloy, which is used for car engines.
China
Third Quarter GDP Growth 7.4% on Year, Below Official Target
China's
economy slowed for a seventh straight quarter in July-September,
missing the government's target for the first time since the depths
of the global financial crisis.
The
National Bureau of Statistics said GDP grew 7.4 percent in the third
quarter from a year earlier - in line with forecasts from economists
polled by Reuters - the first miss of the official target since 6.5
percent growth in the first quarter of 2009.
"This
is within expectations, the economy is showing signs of stabilizing,
that is good news," said Dong Tao, an economist at Credit Suisse
in Hong Kong.
"We
think that with rebounding property markets, stabilizing export
orders, resuming consumption, we probably have seen the bottom of the
economy. The economy can bounce back quickly."
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