The Bank of Thailand said that the country's business sector has been hurt by higher interest rates and oil prices, but expects that strong fundamentals will help the business sector overcome the adverse phase. In its inflation monitoring report, the Bank noted that performance recorded by Thai businesses in the last quarter of 2005 showed both declining profitability and ability to repay debt compared to preceding quarters, and the final quarter of 2004.
Romania’s central bank kept the sterilisation interest rate unchanged at 8.5% in line with market expectations, yesterday, and said it would pursue firm control of the money market through sterilization of excess liquidity via open-market operations. Inflation is falling and the economy is growing, but the expansion in consumption is unsustainable, the bank’s monetary council concluded. Despite the drop in inflation in the first months of 2006, the short-term inflation outlook has worsened following the increases in taxes on tobacco and alcohol.
Bank Internasional Indonesia will focus on lending amounts ranging between 500 million and 10 billion Indonesian rupiah to small businesses. This will help meet the bank's lending target this year. The bank’s managing director, Sukatmo Padmo Sukarno said the bank plans to establish ten credit centres in major cities in Indonesia, as part of its new strategy in retail banking. The bank plans to increase the percentage of loans extended to small and medium firms to about 30% of the bank's total lending from about 22% now.
Turkey’s central bank’s foreign exchange reserves declined by $1.56 billion or 2.6% and came down to $58.2 billion last week. The reason was foreign debt service of $1.7 billion, including repayment to the IMF. The bank’s reserves reached a record level of $60.4 billion in the middle of April, on revenues from the privatisation of oil refinery Tupras.
Uruguay will not leave the South American trade bloc Mercosur, the country's ambassador to the European Union (EU), Elbio Rosselli, said yesterday. However, he criticised Mercosur and confirmed the Uruguay will remain an associate member. Mercosur includes Argentina, Brazil, Paraguay and Uruguay, Venezuela is in the process of becoming full member. Bolivia and Chile are associate members. Mercosur is not a free trade zone as a big number of products are not free of tariffs within the member countries, Rosselli said. Mercosur does not have a common trade policy and it is not a customs union, which were the key goals when Mercosur was created in 1991, he said.
Foreign investment in Chile totalled $340.9 million in the first two months of the year, up 54.2% compared to that registered in same period in 2005. 47.5% of the inflows were invested in the mining sector and came principally from the US. Total foreign direct investment in Chile was $7.3 billion in 2005.