People's Bank of China hikes increase reserve ratio to curb liquidity
The People's Bank of China has raised the reserve requirement ratio for banks by a 0.5 percentage point to 11 per cent for big lenders. The hike comes into effect from May 15. This is the fourth hike this year.

By requiring the banks to hold more of their deposits in reserve, policymakers aim to curb excess liquidity and fast-rising credit and investment growth. Bank officials said it an important task for the country to control liquidity as money supply increased rapidly in the first quarter. The gross domestic product, lending, consumer price index growth figures were also prompting curbs they said. China's annual growth in M2, or broad measurement of money supply, edged down to 17.3 per cent by the end of March from 17.8 per cent in February, but it still broke the target line of 16 per cent set by the central bank early this year.
Back to News Review index page  

Euro at an all-time high against dollar
Frankfurt: The euro touched an all-time high against the dollar on Friday, buying US$1.3682. The euro shot past its previous high of US$1.3667 from December 2004 after the US Commerce Department reported that economic growth slowed to a 1.3 per cent annual rate in the first quarter of 2007, its weakest performance in four years.
Back to News Review index page  

Recession fears rise in US
Washington: The US economy showed the worst economic growth in four years as it crawled at a 1.3 per cent pace in the opening quarter of 2007, raising concerns that troubles in the country's housing market will spread and throw the country into a recession by the end of the year.

The growth of the economy was even weaker than the sluggish 2.5 per cent rate in the closing quarter of last year.

The main culprit was seen in the housing slump as well as the bloated trade deficit.

Former Federal Reserve Chairman Alan Greenspan has put the chance of a recession this year at one in three. Federal Reserve chairman Ben Bernanke, however, has said he doesn't believe the economic expansion, now in its sixth year, is in danger of fizzling out. Neither does the Bush administration.
Back to News Review index page