Monday, 14 May 2012

China eases monetary policy, Greece remains in deadlock

The weekend saw China making a move to bolster economic growth. From AFP/CNA:

China said on Saturday it would cut reserve requirements for banks, after disappointing economic data raised fears of a sharp slowdown in the world's second largest economy.

The People's Bank of China, the central bank, said it would cut banks' reserve requirements by 0.50 percentage points effective from May 18, according to a statement posted on its website...

After the latest move takes effect, China's reserve requirement for most large banks will fall to 20 per cent, the official Xinhua news agency said.

Smaller banks will be required to maintain reserves of 16.5 per cent.

However, Europe's debt crisis remains a threat to the global economy as there was no improvement in the political situation in Greece over the weekend. Bloomberg reports:

Greece’s political deadlock looked set to continue for a second week as President Karolos Papoulias failed to secure agreement on a unity government and avert new elections with the country heading toward a possible exit from the euro area.

Greece’s biggest anti-bailout party, Syriza, defied overtures to join the government yesterday, deepening the impasse. Leader Alexis Tsipras won’t attend a new meeting called by Papoulias today for 7:30 p.m., state-run NET TV reported, without saying how it got the information.

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