Hong Kong, Saudi Arabia, Norway and others follow US Fed in cutting rates; Chrysler to shuts down US factories for one month; Russia suffers as oil prices fall; 33 Latin countries propose historic economic union; and more
Top of the Agenda: Central Bank Moves
One day after the U.S. Federal Reserve cut interest rates to historic lows, central banks across the world followed suit with their own rate cuts. The Wall Street Journal reports the central banks of Norway, the Czech Republic, Hong Kong, Saudi Arabia, Oman, and Kuwait all cut rates--and adds that additional rate cuts are becoming more likely in Japan, Britain, and the eurozone. The rate cuts come alongside a movement toward increased fiscal stimulus in many countries; the Journal reports nearly $1 trillion of stimulus is being lined up around the globe for 2009.
Yet other troubling signs emerged today, reinforcing fears that the efforts of world governments might not be enough to stave off a global recession. Major items in the news:
- The Bank of England indicated that British banks face new potential capital shortages (FT) and said the British government stands ready to pump more loans into the country's banks.
- Germany announced business confidence has plunged to the lowest level since 1982 (Bloomberg) amidst a severe collapse of the country's industrial operations.
- In the United States, the automaker Chrysler announced it would shut down all its U.S. factories (WashPost) for one month, furloughing some 46,000 workers.
Meanwhile, following a move by the Organization of the Petroleum Exporting Countries (OPEC) to cut oil production in a desperate effort to stabilize the price of crude, which now sits at just over $40 a barrel, new questions have emerged for major oil exporting countries.
- RFE/RL looks at what the potential economic fallout might be for these countries if oil prices fall much further.
- The Economist looks at Russia's spiraling economy, where falling oil revenues have been accompanied by collapsing industrial output and a precipitous decline of the Russian ruble.
PACIFIC RIM: Thailand Reconciliation
Thailand's new prime minister, Abhisit Vejjajiva, vowed he would visit (Bangkok Post) the poor northeastern region of Thailand, a stronghold for ousted former Prime Minister Thaksin Shinawatra and the party linked to him, which was dissolved by the Constitutional Court recently.
South Korea: Yonhap reports on scuffles in Seoul's parliament over a bid to ratify a free trade agreement between South Korea and the United States.