Romania Ctrl Bker: IMF Financing Might Boost Econ - MediaFax
BUCHAREST (Dow Jones)--Using a EUR1.9 billion second tranche from an International Monetary Fund loan to finance Romania's budget deficit could help revive the economy, Romanian Central Bank Governor Mugur Isarescu said Thursday, news agency Mediafax reported.
The governor said the central bank would discuss using the IMF funds to finance the budget and not for foreign currency reserves consolidation.
"Eventually, the IMF funds will end up at the central bank. If the Finance Ministry spends this tranche locally, then it will sell foreign currency to the central bank and it will buy lei and the foreign currency will go to the reserves. Likewise, if the ministry uses the money abroad, then the central bank's reserves will be spared from certain external payments," Isarescu told a news conference.
Romanian President Traian Basescu said late Wednesday he would talk to IMF representatives on using the second tranche of the IMF loan to finance the budget, instead of raising central bank's foreign currency reserves.
Romania agreed a EUR12.95 billion two-year stand-by loan with the IMF in March as part of a EUR19.95 billion financial rescue package which also includes funds from the European Commission and other international institutions.
The first tranche of EUR5 billion, was released in May and entered the central bank's reserve. The second tranche of around EUR1.9 billion, should be released Sept. 15, based on the results an IMF evaluation of the use of the first tranche, first evaluation and the economic performance in the first six months.
An IMF mission arrived last week in Bucharest for the first evaluation report.
Agency Web site: www.mediafax.ro
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=lwy%2FldcGHKHpqaunEKCa2g%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
BUCHAREST (Dow Jones)--Using a EUR1.9 billion second tranche from an International Monetary Fund loan to finance Romania's budget deficit could help revive the economy, Romanian Central Bank Governor Mugur Isarescu said Thursday, news agency Mediafax reported.
The governor said the central bank would discuss using the IMF funds to finance the budget and not for foreign currency reserves consolidation.
"Eventually, the IMF funds will end up at the central bank. If the Finance Ministry spends this tranche locally, then it will sell foreign currency to the central bank and it will buy lei and the foreign currency will go to the reserves. Likewise, if the ministry uses the money abroad, then the central bank's reserves will be spared from certain external payments," Isarescu told a news conference.
Romanian President Traian Basescu said late Wednesday he would talk to IMF representatives on using the second tranche of the IMF loan to finance the budget, instead of raising central bank's foreign currency reserves.
Romania agreed a EUR12.95 billion two-year stand-by loan with the IMF in March as part of a EUR19.95 billion financial rescue package which also includes funds from the European Commission and other international institutions.
The first tranche of EUR5 billion, was released in May and entered the central bank's reserve. The second tranche of around EUR1.9 billion, should be released Sept. 15, based on the results an IMF evaluation of the use of the first tranche, first evaluation and the economic performance in the first six months.
An IMF mission arrived last week in Bucharest for the first evaluation report.
Agency Web site: www.mediafax.ro
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=lwy%2FldcGHKHpqaunEKCa2g%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
Bank of England Rate Decision Statement
Bank of England Rate Decision Statement
The verbatim statement which accompanied the Bank of England's rate decision Thursday follows:
The Bank of England's Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%.
The Committee also voted to continue with its programme of asset purchases financed by the issuance of central bank reserves and to increase its size by GBP50 billion to GBP175 billion.
The world economy remains in recession, though there have been increasing signs that output in the U.K.'s main export markets is stabilising.
Financial market strains have eased and banks' funding conditions have improved a little, although financial conditions remain fragile.
Household and business confidence has picked up, albeit from the very low levels experienced in the wake of the financial crisis last autumn.
In the U.K., the recession appears to have been deeper than previously thought.
Gross Domestic Product fell further in the second quarter of 2009. But the pace of contraction has moderated and business surveys suggest that the trough in output is close at hand.
Underlying broad money growth has picked up since the end of last year but remains weak.
And though there are signs that credit conditions may have started to ease, lending to business has fallen and spreads on bank loans remain elevated.
Consumer price inflation fell back to 1.8% in June, a little below the 2% target. The decline in recent months was mainly accounted for by lower food and energy inflation, though past falls in sterling continued to put upward pressure on inflation.
The margin of spare capacity in the economy increased further and pay growth remained weak.
The future evolution of output and inflation will be determined by the balance of two sets of forces.
On the one hand, there is a considerable stimulus still working through from the easing in monetary and fiscal policy and the past depreciation of sterling.
On the other hand, the need for banks to continue repairing their balance sheets is likely to restrict the availability of credit, and past falls in asset prices and high levels of debt may weigh on spending.
While some recovery in output growth is in prospect, the margin of spare capacity in the economy is likely to continue to grow for some while yet, bearing down on inflation in the medium term.
But the recession and the restricted availability of credit are also likely to impact adversely on the supply capacity of the economy, moderating the increase in economic slack.
In the light of the Committee's latest Inflation Report projections and in order to keep inflation on track to meet the 2% inflation target over the medium term, the Committee judged that maintaining Bank Rate at 0.5% was appropriate.
In the light of that outlook, the Committee also agreed that it should extend its programme of purchases of government and corporate debt to a total of GBP175 billion, financed by the issuance of central bank reserves.
The Committee expects the announced programme to take another three months to complete. The scale of the programme will be kept under review. The Committee noted that the increase in the scale of the programme would necessitate an increase in the range of maturities of government debt that the Bank was willing to purchase.
That is explained in an accompanying market notice. Following today's meeting of the MPC, the Governor and the Chancellor exchanged letters about the expansion of the Asset Purchase Facility.
The Committee's latest inflation and output projections will appear in the Inflation Report to be published at 9:30am on Wednesday 12 August.
The minutes of the meeting will be published at 9.30am on Wednesday 19 August.
Web Site: www.bankofengland.co.uk
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=lwy%2FldcGHKHpqaunEKCa2g%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
August 06, 2009 07:28 ET (11:28 GMT)
The verbatim statement which accompanied the Bank of England's rate decision Thursday follows:
The Bank of England's Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%.
The Committee also voted to continue with its programme of asset purchases financed by the issuance of central bank reserves and to increase its size by GBP50 billion to GBP175 billion.
The world economy remains in recession, though there have been increasing signs that output in the U.K.'s main export markets is stabilising.
Financial market strains have eased and banks' funding conditions have improved a little, although financial conditions remain fragile.
Household and business confidence has picked up, albeit from the very low levels experienced in the wake of the financial crisis last autumn.
In the U.K., the recession appears to have been deeper than previously thought.
Gross Domestic Product fell further in the second quarter of 2009. But the pace of contraction has moderated and business surveys suggest that the trough in output is close at hand.
Underlying broad money growth has picked up since the end of last year but remains weak.
And though there are signs that credit conditions may have started to ease, lending to business has fallen and spreads on bank loans remain elevated.
Consumer price inflation fell back to 1.8% in June, a little below the 2% target. The decline in recent months was mainly accounted for by lower food and energy inflation, though past falls in sterling continued to put upward pressure on inflation.
The margin of spare capacity in the economy increased further and pay growth remained weak.
The future evolution of output and inflation will be determined by the balance of two sets of forces.
On the one hand, there is a considerable stimulus still working through from the easing in monetary and fiscal policy and the past depreciation of sterling.
On the other hand, the need for banks to continue repairing their balance sheets is likely to restrict the availability of credit, and past falls in asset prices and high levels of debt may weigh on spending.
While some recovery in output growth is in prospect, the margin of spare capacity in the economy is likely to continue to grow for some while yet, bearing down on inflation in the medium term.
But the recession and the restricted availability of credit are also likely to impact adversely on the supply capacity of the economy, moderating the increase in economic slack.
In the light of the Committee's latest Inflation Report projections and in order to keep inflation on track to meet the 2% inflation target over the medium term, the Committee judged that maintaining Bank Rate at 0.5% was appropriate.
In the light of that outlook, the Committee also agreed that it should extend its programme of purchases of government and corporate debt to a total of GBP175 billion, financed by the issuance of central bank reserves.
The Committee expects the announced programme to take another three months to complete. The scale of the programme will be kept under review. The Committee noted that the increase in the scale of the programme would necessitate an increase in the range of maturities of government debt that the Bank was willing to purchase.
That is explained in an accompanying market notice. Following today's meeting of the MPC, the Governor and the Chancellor exchanged letters about the expansion of the Asset Purchase Facility.
The Committee's latest inflation and output projections will appear in the Inflation Report to be published at 9:30am on Wednesday 12 August.
The minutes of the meeting will be published at 9.30am on Wednesday 19 August.
Web Site: www.bankofengland.co.uk
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=lwy%2FldcGHKHpqaunEKCa2g%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
August 06, 2009 07:28 ET (11:28 GMT)
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