US Fed raises rate to 4.75 per cent
Washington, USA: The Federal Reserve has raised the main U.S. interest rate to 4.75 per cent, and also, has not refrained from holding out the prospect of further increases.

The quarter-point move by the bank, made under the chairmanship of the new incumbent Ben S. Bernanke, is its 15th in a row — the longest stretch of increases in more than 25 years. Fed policy makers also maintained their assessment that energy prices and labor costs pose a risk to inflation.

``Some further policy firming may be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance,'' the Federal Open Market Committee said in its statement after meeting today in Washington. ``The run-up in the prices of energy and other commodities appears to have had only a modest effect on core inflation.''

The decision, Bernanke's first since succeeding Alan Greenspan, has had investors and economists waiting for signals as to when the Fed will end its rate increases.

The Fed's raise of interest rates now gives the U.S. the highest central bank rate among the Group of Seven industrial countries, surpassing the Bank of England's 4.5 percent benchmark. The Fed's rate is 2.25 percentage points above the European Central Bank's refinancing rate and 1 percentage point higher than the Bank of Canada's overnight rate. The Bank of Japan's rate is close to zero.
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GM to restate mortgage unit's financial results for several years
Detroit, USA: General Motors Corp., the world's largest automaker, filed a delayed annual report with U.S. regulators and also said it will restate several years of financial results that will reclassify cash flows at its home-mortgage unit.

GM's Residential Capital Corp. home-mortgage unit will restate cash flows for 2004 and 2003, as well as select quarters of 2004 and 2005, the automaker said in its regulatory filing. The change will also force GM to modify its results from those years, with the company saying that it would restate 2002 results because of the cash flow issue.

Moody's Investors Service had earlier threatened to downgrade GM's credit ratings deeper into junk if the company reneged on a pledge to submit the annual report by the end of this week.

Cash generated by some ResCap mortgages was classified as coming from operating cash flow instead of from investing cash flows, GM said in the regulatory filings. The company also said some non-cash proceeds weren't appropriately presented in the consolidated statements of cash flows.
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China gets breathing space from US lawmakers on currency revaluation
Washington D.C., USA: In a move that provides China with more time to adjust its currency regime, two US senators have now backed away from demands that the Chinese leadership make an immediate revaluation of its currency.

Senators Charles Schumer and Lindsey Graham announced that they were delaying a vote on their legislation to levy tariffs on imports from China, as two other lawmakers proposed a currency measure they called ``more balanced.'' The two US lawmakers had visited China last week.

Both the lawmakers said that the delay on their proposal to levy 27.5 percent tariffs on imports from China may stretch until Sept. 29, though a vote might be held sooner, they said, ``if the pace of currency reform slows.''

Members of Congress, unions and US companies complain that China intentionally suppresses the value of its currency in order to give Chinese goods a price advantage. The U.S. trade deficit with China widened to a record US$201.6bn last year.

China has already made some initial moves to make its currency more flexible, with the yuan appreciating 1.1 per cent ever since the People's Bank of China revalued the currency in July. The yuan or the renminbi (RMB) is now managed against a basket of currencies, including the dollar, euro and yen.
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