Nov. 3 (Bloomberg) -- India and China are accelerating efforts to prop up growth as a global slump threatens the world's fastest-expanding major economies.
The Reserve Bank of India on Nov. 1 lowered its benchmark interest rate for the second time in two weeks, and for the first time in 11 years reduced the amount of money lenders are required to keep in government bonds. China's central bank removed temporary controls over loans to maintain ``relatively fast'' growth, Xinhua News Agency reported Nov. 1, three days after cutting its key rate for the third time in two months.
Emerging Asian economies that account for one-fifth of world growth are being dragged down as their main markets in the U.S. and Europe contract, increasing the likelihood of a global recession. Policy makers in India and China are also boosting spending to prevent their economies from going under.
China's Premier Wen Jiabao says sustaining economic growth is the government's ``first priority.'' China has already raised export incentives, cut costs for home buyers and pledged infrastructure spending.
India and China need to move fast to implement their stimulus plans, with growth already slowing in Asia's second- and third-largest economies amid weaker foreign demand.
China's stocks fell to the lowest in almost two years, led by industrial companies, after a report showed China's manufacturing contracted amid the worst financial crisis since the Great Depression.
The CSI 300 The CSI 300 has slumped 69 percent this year, making it Asia's worst-performing benchmark index. Stocks have fallen amid concern demand for Chinese products will decline as the global credit crisis drags the world's largest economies into recession.
Net income at the 487 companies listed on the Shenzhen Stock Exchange's main board rose 3.4 percent in the first three quarters, a fraction of the 89 percent increase a year earlier, according to data in a statement released by the bourse today.
China's economy grew at the slowest pace in five years in the three months through September as export orders shrank and industrial production waned. The expansion cooled for a fifth straight quarter, to a 9 percent gain from a year earlier.
Nov. 3 (Bloomberg) -- Indian Central bank governor Duvvuri Subbarao has abandoned the "inflation vigil'' he outlined just 10 days ago in his inaugural monetary policy statement.
For the first time since 1997, the Reserve Bank of India on Nov. 1 deployed all three of its main tools to shore up growth after inter-bank lending rates climbed to 21 percent. Economists at Yes Bank Ltd. and Standard Chartered Bank predict more interest-rate cuts following the weekend reduction.
``India's central bank has no other option but to focus on economic expansion," said Shubhada M. Rao, chief economist at Yes Bank Ltd. in Mumbai. ``Global cues have turned against growth and it was surprising to see the hawkish tones on inflation'' last month.
Subbarao, less than two months into the job, has grappled with monetary policy at a time when inflation is double the central bank's target and a global downturn threatens to hit the economy. The central bank's renewed focus on growth aligns with Prime Minister Manmohan Singh's push to buoy the economy ahead of elections due by May.
The decision to cut rates on Nov. 1 was a U-turn from the stance Subbarao spelled out in his first statement. At that time, he said price pressures could come from lower farm production, volatile oil prices and a weaker rupee.
Nov. 3 (Bloomberg) -- Forget last week's record 20 percent gain in emerging-market stocks. Hard times are ahead for equities in Brazil, Russia, India and China, some of the world's biggest money managers say.
Even with developing-nation shares trading at their cheapest levels in a decade, financial crises in Hungary and Pakistan that required international rescue packages and concern that economies from Turkey to Argentina are also teetering prompted investors to pull out of emerging-market funds at a record pace.
RBC Capital Markets cut its estimates on Oct. 23 for 2009 economic growth in Brazil to 2.5 percent from 4 percent and Russia to 4 percent from 6 percent. That may undermine analysts' forecasts for a 14.5 percent increase in earnings at a time when the global credit crunch seized up lending from Sao Paulo to Seoul and a slump in 24 of 25 developing-nation currencies last month inflated the costs of repaying dollar-denominated debt.
Nov. 3 (Bloomberg) -- Brazil's central bank may provide signals on the outlook for interest rates after halting six months of increases to weigh an economic slowdown against inflationary pressure from a weakening currency.
Economists will be closely reading the minutes from the bank's Oct. 28-29 meeting, to be published Nov. 6, to gauge whether its unanimous decision to pause rate increases herald a change in policy.
After a festive meeting with thousands of jubilant supporters dancing in the streets, Obama affirmed to RPP reporters that the relationship between the United States and Peru would grow closer and stronger.
RPP correspondents explained Obama made these statements as he was leaving his rally, which was compared by Peru reporters to the presentation of a famous show-business star.