The Federal Reserve Bank of New York said it will expand the number of counter parties used when the central bank begins to drain the record amount of cash added to the financial system to include domestic money market funds. The additional firms to be used for reverse repurchase agreements are “intended to enhance the capacity of such operations to drain reserves beyond what could likely be conducted through” the use of the central bank’s 18 primary dealers, the New York Fed said. The plan is “prudent planning” and doesn’t signal any change in monetary policy, the Fed said. (Bloomberg)
European leaders are in talks to establish a lender of last resort and limits on creditdefault swaps to bolster the euro area and prevent a repeat of the Greek financial crisis. Plans for what may become the European Monetary Fund and a German-French push to curb the use of derivatives to bet against sovereign debt are to be ready by June. (Bloomberg)
Leading central bankers believe economic growth is advancing on a "very positive" path, allowing them to unwind stimulus measures, European Central Bank (ECB) chief Jean- Claude Trichet said. "At the global level, the sentiment is that growth continues to be very positive, and with a number of corrections. We see the phasing out of non-conventional measures that have been taken by a very large number of central banks," he said. (Channel News Asia)
Singapore’s economic performance will be uncertain in the second half of this year even as the economy “should do well” in the first six months, Trade Minister Lim Hng Kiang said. Asset price risk is a concern in Asia, the minister added. (Bloomberg)
Singapore’s Trade and Industry Minister Lim Hng Kiang said the manufacturing sector can aim to provide a more than just production. Firms can aim to integrate services, taking advantage of Singapore's existing logistics, research and marketing infrastructure to provide more complete solutions to clients. To help position Singapore as launch-pad pad for firms looking to tap Asian spending, an Institute of Asian Consumer Insights is being set up. (Channel News Asia)
Taiwan’s exports rose for a fourth month in February by 32.6% yoy (75.8% in Jan). This came in line with market estimates for a 32.9% gain. Imports advanced 45.8% yoy (115.5% in Jan), bringing the trade surplus to US$0.9b (US$2.5b in Jan). (Bloomberg)
Japan posted a current-account surplus in January as exports climbed for a second month. The gap was ¥899.8bn (US$9.9bn) compared with a deficit a year earlier. The median estimate was for a ¥783.9bn surplus. Exports rose 40.6% yoy in January and imports advanced 7.1%. (Bloomberg)
Top Chinese officials said the nation’s trade surplus is shrinking and urged caution in exiting crisis policies, suggesting that the yuan may not appreciate soon against the dollar. The surplus slid 50.2% in January and February combined from a year earlier, Commerce Minister Chen Deming said. “We must be very cautious about the timing of normalising the policies, and this includes the renminbi rate policy,” central bank Governor Zhou Xiaochuan said. (Bloomberg)
China’s Commerce Minister Chen De ming said any rise in the yuan’s exchange rate will be gradual. A half to the yuan’s appreciation since mid-2008 was part of a panoply of pro-growth policies to prop up the economy during the global credit crunch. “Existing from the stimulus does not mean all these measures will disappear. They will still be there, but there will be some fine-tuning,” he said. (Financial Daily)
Indonesia’s central bank raised its estimate for economic growth this year to 5.6% from its original forecast of 5.2%, Deputy Governor Hartadi A. Sarwono said. The growth forecast for the first quarter was also raised to 5.7% from 4.8%, he said. (Bloomberg)
The Philippines will consider unwinding some of its stimulus measures even as it may keep interest rates unchanged to support the economic recovery, central bank Deputy Governor Diwa Guinigundo said. “There are reasons to review the crisis intervention measures that we put in place during the height of the global financial crisis,” Guinigundo said. “The policy rates can be maintained at this point as our inflation outlook remains positive and benign.” (Bloomberg)
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