China has promised to help resolve the eurozone’s debt crisis, after talks with EU leaders in Beijing. Premier Wen Jiabao offered co-operation to help stabilise debt-ridden EU nations, but made no specific promise to invest in a European bailout fund. EU leaders have been seeking Chinese money to help bolster a planned fund of about 500bn euros ($665bn; £420bn).
Japan Announces Stiumulus Package
The Bank of Japan (BOJ) has made a surprise move to boost growth as the country’s economy continues to struggle. The central bank has announced it is to expand its asset purchase programme by 10tn yen ($130bn; £83bn). The move comes just a day after data showed that Japan’s economy shrank by more-than-expected 2.3% in the last three months of 2011. The BOJ also left rates unchanged at between zero and 0.1%. The central bank said it will use the extra funds to purchase Japanese government bonds. “The Bank will pursue powerful monetary easing by conducting its virtually zero interest rate policy and by implementing the Asset Purchase Program mainly through the purchase of financial assets,” the bank said.
India Sees Large Fall in Inflation
India’s main inflation rate has fallen to the lowest level in more than two years. The report for January showed that wholesale prices rose at an annual rate of 6.55%, down from 7.47% in December. Falling food prices have helped to ease the overall inflation rate and economists say the central bank now has greater scope to lower the cost of borrowing. India’s inflation rate remains higher than other leading emerging economies.
“The biggest factor for inflation coming down seems to be lower contribution from food commodities because of the bumper crop.” said Deven Choksey, Managing Director at KR Choksey Shares and Securities in Mumbai. “We expect inflation to remain at moderate levels in the near future, and if it settles around 6%, it will be a happy situation.” Sluggish economic growth has raised the prospect of a cut in interest rates by India’s Central Bank.
