JAKARTA: Bank Indonesia Wednesday set two rupiah intervention
\nrates - departing from its usual practice of just setting one -
\nto contain sudden surges in liquidity in the money market, a
\ncentral bank official said.<\/p>\n
This is a new policy, the official, who declined to be named,
\nsaid.<\/p>\n
The intervention rate - or the rate that the central bank pays
\ncommercial banks for funds placed with the monetary authority -
\nwas at 12.625 percent in the morning, the official said.<\/p>\n
But in the afternoon, the rate was halved to 6.3125 percent,
\nthe official said.<\/p>\n
Commercial banks usually dump relatively huge amounts of
\nrupiah funds with the central bank in the afternoon, if they fail
\nto lend them out at favorable rates in the money market.<\/p>\n
Bank Indonesia wants to discourage banks from doing just that,
\nthe official said, by setting a lower intervention rate in the
\nafternoon.<\/p>\n
The central bank doesn't want to pay out so much cash at one
\ngo, the official added. -- Dow Jones<\/p>\n
U.S. industrial activity drops<\/p>\n
WASHINGTON: Industrial production fell by 0.3 percent in
\nAugust, the first decline in eight months, a fresh sign of the
\nfaltering economic recovery.<\/p>\n
The latest snapshot of industrial action at the U.S.
\nfactories, mines and utilities reported by the Federal Reserve
\nTuesday was much weaker than the performance many analysts were
\nexpecting. They were forecasting a rise in industrial production
\nof around 0.1 percent or 0.2 percent.<\/p>\n
The 0.3 percent drop was the first decline since December,
\nwhen the nation's economy was still trying to claw its way out of
\na recession that began in March 2001.<\/p>\n
\"It is a setback, but hopefully only a brief one,\" said Carl
\nTannenbaum, chief economist for LaSalle Bank.<\/p>\n
The weak performance in August came after industrial activity
\nrose by a modest 0.4 percent in July, according to revised
\nfigures. That increase was twice as big as the 0.2 percent
\nadvance the Fed previously reported. - AP<\/p>\n
China's forex reserves hit $253b<\/p>\n
BEIJING: China's foreign exchange reserves hit US$253 billion
\nat the end of August, state media said Wednesday, citing central
\nbank governor Dai Xianglong.<\/p>\n
The country's reserves, reported by the central bank-run
\nFinancial News daily, were up $40.8 billion since the beginning
\nof the year.<\/p>\n
The vast majority of China's foreign reserves, the second-
\nlargest in the world after Japan's, are in U.S. dollars, while
\nthe euro makes up an undisclosed share.<\/p>\n
Governor Dai said earlier this year the euro was the second
\nlargest currency in its reserves but declined to provide details.
\n-- AFP<\/p>\n
ADB to increase lending to China<\/p>\n
MANILA: The Asian Development Bank (ADB) said Wednesday that
\nit planned to increase its annual lending to China by 50 percent
\nto US$1.5 billion starting next year.<\/p>\n
The increase in lending for 2003-2005 is aimed at helping
\nChina restructure its economy and reduce poverty in its central
\nand western regions, a bank statement said.<\/p>\n
More than 90 million Chinese still live on less than a dollar
\na day, down from twice that number in the 1990s, it said.<\/p>\n
The ADB is to finance road and rail projects in the provinces
\nof Gansu, Yunnan, Ningxia and Sichuan, it added.<\/p>\n
It will also finance projects to develop cleaner sources of
\nenergy, and improve management and conservation of soil and
\nwater, the bank said. -- AFP<\/p>",
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