Assigned News Items
Note: I will list here, for most of the term, the major news items that have appeared that are relevant for the course. I will usually discuss these, if only briefly, on Mondays (or the following Wednesdays when Mondays are not available). You should be sure to be familiar with them from whatever news sources you are using. Where possible, I will provide links to the items online. I will include questions about some of them on exams.
- OPEC and others agree to cut oil production
-- WSJ: 12/7
| NYT: 12/7
| FT: 12/7
- The Organization of the Petroleum Exporting Countries, OPEC, led by Saudi Arabia, met with other oil producers in Vienna and agreed to reduce oil production by 1.2 million barrels a day. The decrease is larger than was expected.
- The purpose is to increase global oil prices, which had fallen by about 1/3 since October. The move is also viewed as an affront to President Trump, who wants to keep oil prices low, and who has supported Saudi Arabia with that purpose.
- The largest reductions will be by Saudi Arabia, about 5%, and by Russia, about 2%. Both had increased production earlier in the year to replace oil lost due to US sanctions on Iran. OPEC members exempted from cuts were Iran, Libya, Venezuela and Nigeria. Earlier in the week, Qatar said it would leave OPEC, after 57 years as a member.
- China-US trade truce seen as uncertain
-- WSJ: 12/4
| NYT: 12/4
| FT: 12/5
| WP: 12/4
- China's accounts of last week's Xi-Trump agreement differ from Trump's, causing uncertainty as to what progress was made. Trump the followed with plans to take a strong stand in negotiations. Stock markets, after first rising, fell.
- Trump tweeted that China would "reduce and remove" tariffs on US cars, but his aides acknowledged that China had not made such a commitment. JP Morgan wrote "It doesn’t seem like anything was actually agreed to at the dinner and White House officials are contorting themselves into pretzels to reconcile Trump’s tweets (which seem if not completely fabricated then grossly exaggerated) with reality."
- Trump: "President Xi and I want this deal to happen, and it probably will. But if not remember, I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power."
- US trade deficit grew to its largest in ten years
-- WSJ: 12/6
| NYT: 12/6
| FT: 12/6
- The US deficit on trade in goods grew to $55.5 billion in October, the most since October 2008, its fifth-straight month of increase. The US goods trade deficit with China also rose.
- Imports rose 0.2% while exports fell 0.1%. The non-oil deficit "is at a record level and 'rising steadily,'" said one expert, who explained "Pumping up domestic demand with fiscal easing and picking fights with trading partners does that."
- Though the increase is partly due to strong growth in the US economy, it may also be a drag on GDP in the near future.
- Japan to allow more immigration
-- WSJ: 12/9
- New legislation passed Japan's parliament that will allow 300,000 more foreign blue-collar workers to enter the country. The purpose is to deal with an increasing labor shortage. Job vacancies are more than four times the number of job seekers in some occupations such as construction and nursing care.
- This is a major policy change for Japan, which until now has resisted large-scale immigration. It is a response to population that has been declining since 2010 due to low birth rates. The unemployment rate fell this year to its lowest since 1992.
- Currently, only about 2% of Japan's population is non-Japanese. President Abe said "We plan to build a society where we live alongside foreigners."
Nov 26 - Dec 2
- G20 Meets in Buenos Aires
-- WP: 12/1
| NYT: 11/29
| FT: 11/29
- Leaders of the G20 group of large countries met for their annual summit in Buenos Aires, Argentina. Although the major discussions are between the largest players -- US, China, and EU -- the meeting does give a voice to major emerging countries.
- Recent summits have been marred by unresolved disputes between the US, under Trump, and others, but Trump avoided feuds at this one, and all 20 signed a statement of principles.
- Argentina, the host, had hoped to shine. But weakness in its economy, strikes that grounded flights and snarled transportation, and the falling value of its currency and the approval ratings of its president, all reduced the enthusiasm with which the country was able to greet the world leaders.
- Leaders of US, Mexico, and Canada sign the USMCA
-- WSJ: 11/30
| NYT: 11/30
| FT: 11/30
| WP: 11/30
| WE: 11/30
| NYT: 12/2
- President Trump, President Peña Neto, and Prime Minister Trudeau signed the renegotiated NAFTA agreement, the U.S.-Mexico-Canada Trade Agreement, on the sidelines of the G20 meeting in Buenos Aires. Trudeau spurned the USMCA name favored by Trump, calling it only the new version of NAFTA.
- The agreement includes many controversial features that may interfere with its being ratified in the US, and perhaps in Canada. Trump views it as an important achievement and as greatly superior to the NAFTA.
- On his way home from Argentina, Trump told reporters that "I will be formally terminating NAFTA shortly." That is presumably intended to prevent Congress of thinking that it can reject USMCA and simply return to NAFTA.
- Presidents Xi and Trump agree a "truce"
-- WP: 12/1
| NYT: 12/1
| FT: 12/2
- Over steak dinner at the G20 summit in Buenos Aires, Presidents Xi and Trump discussed the trade dispute between China and the US and agreed to hold off on further actions during talks to resolve the issues separating them. "Less a breakthrough than a breakdown averted," says the NYT.
- The US will refrain from increasing its current tariffs on China's exports, as it had planned to do on January 1, and it will refrain from imposing further tariffs on additional Chinese exports. Both are only being postponed, however, contingent on reaching a satisfactory conclusion to the talks within 90 days.
- China promises to increase its imports from the US of certain products, though only ones that it has no intention of producing itself.
- US considers quotas on steel and aluminum from Canada and Mexico
-- NYT: 11/21
- As of now, in spite of the renegotiated NAFTA known as USMCA, steel and aluminum imports from Canada and Mexico are still subject to the 25% and 10% tariffs levied earlier on national security grounds.
- Before signing the USMCA at the G20 summit later this month, Canada and Mexico want the tariffs removed. The US is offering to replace the tariffs with import quotas.
- The size of the quotas would be crucial. Mexico has been receptive to the proposal, but Canada so far is not.
- US political problems for the USMCA
-- NYT: 11/21
- Approval of the USMCA in the newly elected House of Representatives in 2019 will face opposition from many Democrats, who want stronger protections for American workers and enforcement of provisions to raise wages of Mexican auto workers.
- Concern about approval in the new Congress is motivating Senate Republicans to seek approval in the lame-duck session.
- But a large group of conservative Republicans are objecting to language inserted in the USMCA by Canada that would protect workers in all three countries from "discrimination on the basis of sex, including sexual orientation and gender identity." They object that this impinges on US sovereignty to enact its own social policies.
- US trying to stop other countries from buying from China's Huawei
-- WSJ: 11/23
- The US, concerned about a threat to cybersecurity from products made by China's Huawei Technologies Co., had already mostly blocked purchases by the US from the firm. Huawei is the world's number 2 smartphone maker and the global leader in telecom equipment.
- Now the US is trying to persuade allies where US military bases are located to also stop using Huawei's equipment, because of risk to our security. Huawei insists that it is employee owned and "not beholden to any government."
- Of special concern is the move to "5G", the coming generation of mobile technology, which the US government doesn't want Huawei fo dominate, and in which Huawei is now far ahead of competitors. The US worries that the company, on behalf of the Chinese government, might spy on or disable commercial connections in other countries that the US military would find it necessary to use.
- Britain and EU agree on draft deal for Brexit
-- WSJ: 11/15
| NYT: 11/15
| WP: 11/15
- Brexit negotiators reached a deal on the terms of UK exit from the EU, and UK Prime Minister May got her cabinet to endorse the deal, after which two cabinet members resigned.
- The 585-page agreement keeps the UK in the EU customs union for an uncertain period after the UK formally leaves the EU in March 2019, and continues to keep the UK subject to many EU rules during that period.
- The agreement needs approval by EU leaders next month, which is likely. It also needs approval in the UK parliament, which is more problematic, as both "leavers" and "remainers" are very unhappy with the deal.
- China and US state positions prior to Xi-Trump meeting
-- WSJ: 11/17
| NYT: 11/17
| FT: 11/17
- Leaders of China and US have stated their positions to resolve the trade war. China's Xi promised to "significantly relax market access, strengthen intellectual property protection and actively expand imports."
- Trump says he is optimistic, but that China's list of things they are willing to do is "not acceptable to me yet."
- Frictions between President Xi and Vice President Pence dominated the Asia-Pacific APEC summit in Papua New Guinea, which for the first time in its 29-year history failed to conclude with a joint communiqué.
- Russia threatens to boycott the World Economic Forum at Davos
-- FT: 11/13
- The conference, which meets each year in January in Davos, Switzerland, and attracts many leaders from government, business, international institutions, and academia, announced earlier that it would bar three Russian businessmen who had been sanctioned by the United States.
- Russia's Prime Minister, Medvedev, said in response that the entire Russian delegation would not attend unless the three men were reinstated.
- Neither Russian President Putin nor Mr. Medvedev have attended the Davos forum in recent years, but they have sent a delegation led by a deputy prime minister.
- China holds Import Expo
-- WSJ: 11/5
| NYT: 11/6
| Economist: 11/3
- China held a new kind of trade fair, in Shanghai, the China International Import Expo, stressing China as a market for imports, which it seeks to increase.
- The expo hosted foreign heads of state (but not the US), leaders from international institutions (including the WTO), and executives from many multinational corporations. It was attended by thousands of Chinese companies, potential buyers of imports.
- China's President Xi spoke of the intent to increase China's imports by more than a quarter and his pledge to better protect intellectual property and ease restrictions on foreign investment. But he did not announce any specific change in policy or any reduction in import tariffs.
- Trump advisor Navarro criticizes Wall Street "Globalists" for opposing US tariffs
-- WSJ: 11/10
| FT: 11/9
- President Trump's senior advisor on trade, Peter Navarro, spoke in Washington calling Goldman Sachs and others on Wall Street "unpaid foreign agents" for criticizing US tariffs on China. He called them "globalist billionaires."
- "If Wall Street is involved and continues to insinuate itself in these negotiations, there will be a stench around any deal that’s consummated because it will have the imprimatur of Goldman Sachs and Wall Street."
- The White House, where President Trump had initiated a phone conversation with China's President Xi last week, said Navarro "is freelancing; he’s speaking for himself."
- Money is flowing out of China, and out of its reserves
-- WSJ: 11/8
| FT: 11/7
- In the third quarter of 2018, China had the first net investment outflow since 2016. And its foreign exchange reserves dropped by $34 billion in October, the biggest fall since late 2016.
- China's net exports had been weak, but until now that was offset by net investment inflows.
- China's current account is also in deficit, on track for its first full-year deficit since 1993.
Oct 29 - Nov 4
- Avoid customs? There's an app for that
-- WSJ: 10/31
- The app Grabr, with half a million users world-wide, allows people to purchase goods abroad and have them delivered to them by travelers in their luggage.
- The main purpose, in countries where products are expensive, is to allow their purchase more cheaply abroad without the consumer having to travel there.
- Another advantage (and perhaps contributing to why local prices are high) is that some avoid paying tariffs at the border, either because purchases are under the tariff-free limit or because the travelers disguise the items as used. Grabr itself requires users to comply with customs.
- Presidents Xi and Trump have "good conversation"
-- WSJ: 11/1
| NYT: 11/2
| FT: 11/1
- China President Xi and US President Trump had a long conversation, ahead of their planned meeting in person at the G-20 summit in Argentina November 30.
- Trump tweeted that they discussed "many subjects, with a heavy emphasis on trade." He said that discussion about US tariffs on China and China's retaliatory tariffs on the US are "moving along nicely." But any resolution still depends on China presenting a concrete proposal to deal with US economic concerns.
- The NYT says there really wasn't any progress, and that this report is only to ease the fears of the trade war by Trump supporters prior to the midterm election.
- The China currency approaches seven.
-- WSJ: 10/30
| NYT: 10/30
| FT: 11/2
- The Chinese renminbi has been falling against the US dollar, now approaching the "psychologically important level of 7 renminbi to the dollar." It was last below that (i.e., at more than 7 renminbi per dollar) in May 2008 at the start of the financial crisis.
- China has been acting to slow the fall of its currency, and resisting moving below seven. If it nonetheless lets that happen, that may be a signal that it is willing to use its currency to undermine US tariffs.
- Chinese officials set a benchmark rate for the currency each day and allow only tiny variation around that. On Tuesday, they set it at 6.9574, just a tiny bit stronger than seven. The market is sending a clear signal that it should be worth less, and China is using its dollar reserves to prevent that.
- WTO Members meet to attempt reform
-- WSJ: 10/24
| FT: 10/24
- Canada hosted a two-day summit of WTO leaders, including the EU and Japan but not the US and China, to discuss reforms of the WTO that would address concerns voiced by President Trump but many of which are shared by others. Those attending included what were called "middle powers," Australia, Mexico, Kenya and Singapore. The EU is leading a separate effort to arbitrate between the US and China within the WTO.
- Concerns include weak penalties on government subsidies, intellectual property violations, permission for developing countries to skirt rules, and inadequate coverage of digital trade. Some of these issues will be contentious, especially because they target WTO member China.
- This is the first attempt to restructure the WTO since its creation in 1994, and it hopes to make changes and satisfy both the US and China by December 2019, when its dispute settlement process will cease to function due to Trump's blocking of new appointments.
- Davos in the Desert
-- WSJ: 10/22
| NYT: 10/23
| WP: 10/23
- Saudi Arabia hosted its second annual Future Investment Initiative, dubbed Davos in the Desert after the conference held in Davos Switzerland each year in January. This was to host executives from large companies around the world as well as bankers and government officials.
- Unlike the Davos event, this was intended to attract international investors to Saudi Arabia as part of the attempt by its ruler, Crown Prince Mohammed bin Salman, to remake and diversify the Saudi economy away from reliance on oil.
- However, a large number of those who had planned to attend cancelled their participation in response to the murder in Istanbul, apparently by Saudi operatives, of journalist Jamal Khashoggi.
- US CVD and AD tariffs on olives from Spain hurt the Spanish olive industry
-- FT: 10/22
- Earlier this year, the US had imposed tariffs of 33% on processed black olives from Spain, as a response to Spanish subsidies and dumping. News now reports on the harm this tariff is doing to growers and processors in Spain.
- Agro Sevilla, a 4,000-farmer co-operative that processes and sells olives and olive oil around the world and is the biggest exporter of olives in the world, has laid off 70 of its 450 workers and suffered a 20% drop in sales.
- The conflict began in June 2017 with two US companies complaining that Spanish companies were getting improper subsidies and were also dumping. A spokesperson for the Spanish industry says that the outcome of the investigation was "pre-determined because of the protectionist atmosphere" under President Trump.
- US expands power to block foreign direct investment
-- WSJ: 10/11
| NYT: 10/11
- The US Treasury is beginning to implement the recently passed law tightening reviews of foreign investment from abroad by the CFIUS, the Committee on Foreign Investment in the US. This interagency committee, which is not new and has on occasion blocked certain investments in the past, will now look at all deals giving access to critical technologies in 27 industries. The purpose is to protect "U.S. national security and technological superiority."
- In the past, reviews were limited to investments acquiring a controlling interest in US companies. Now they will include investments with non-controlling interest if they give access to critical technologies. "Critical technologies" refers to US "export control lists."
- While motivated mainly by concern about China's access to US technologies, there is offsetting concern that this may deter foreign investment that has been a source of economic growth and jobs in the US.
- US announced it will withdraw from postal treaty
-- WSJ: 10/19
| NYT: 10/18
| FT: 10/17
- The US has begun to withdraw from the 144-year old postal treaty administered by the Universal Postal Union, a United Nations agency that sets prices of international mail including small packages of less than 2 kilos (4.4 lbs).
- These prices were set lower starting in 1969 for poor developing countries than for rich countries. They still apply to China, making international shipping of small packages to the US from China far cheaper than shipping within the US.
- With this announcement, countries have a year to renegotiate postal rates, after which the US could rescind its notice of withdrawal and remain in the treaty.
- The move to leave the treaty was pushed by Trump's trade advisor, Peter Navarro, who seeks to thwart China's exports. About 60% of small packages shipped to the US today under the treaty are from China.
- US Treasury Department opts not to name China a currency manipulator
-- WSJ: 10/18
| NYT: 10/18
| FT: 10/17
- Despite the falling price of China's currency (6% this year) and the US trade war with China, the US Treasury Department, in its biannual report on currencies, declined to name China as a currency manipulator. The report criticized China and its currency policies, but as in previous reports both before and under Trump, it did not say that China was improperly devaluing its currency, the renminbi.
- The US has not used this label since 1994, when it then labeled China as a currency manipulator. The effect of such a label is to "prompt negotiations to solve the problem.:
- The Treasury has a monitoring list of countries whose currencies concern it, including Germany, India, Japan, Korea and Switzerland in additional to China.
- China uses macro policy to offset harm from trade war
-- WSJ: 10/8
| NYT: 10/8
| WP: 10/8
- China announced a monetary stimulus (reducing the bank reserve requirement) to increase economic growth, as the economy slows in response to the trade war with the US. The government had already lowered income taxes and urged local governments to increase spending on infrastructure.
- The US has already imposed tariffs of 10% on $250 billion of China's exports and plans to increase those tariffs to 25% on January 1. It also plans to put tariffs on another $257 billion soon. Trump has been unwilling so far to negotiate, viewing the strength of the US economy and the weakness of China's as an advantage.
- China's stock market has fallen by 15% this year, and its currency by 9% since mid-April. Its foreign currency reserves have fallen to their lowest level in over a year.
- Pakistan is seeking a bailout from the IMF
-- WSJ: 10/12
| NYT: 10/12
| Economist: 10/12
- Pakistan's new Prime Minister, Imran Khan, had hoped not to have to borrow from the IMF, but now says he needs $10-12 billion for a "short-term financial crunch that should pass in the next six months" that he blames on borrowing done by the previous government. Khan had hoped to get the needed funding from other countries, but so far has not succeeded.
- Christine Lagarde, the IMF's Managing Director, says Pakistan will need to provide "absolute transparency" about its debt, much of which were loans from China as part of its Belt and Road Initiative.
- Any loan by the IMF will include conditions that Pakistan must satisfy, and will need to be approved by the IMF's executive board, on which the US has the largest voting share but not a veto. The US is concerned that money used to bail out Pakistan will be used to pay off loans to China.
- US bilateral trade deficit with China hits a record in September
-- WP: 10/12
- Contrary to the intent of Trump's tariffs on China, US imports from China in September exceeded exports by a record $34.1 billion. This puts the bilateral deficit for the 9 months of 2018 at $226 billion, in contrast to the $196 billion of the same period in 2017.
- Compared to the same month last year, China's exports to the US were up 14.5% and its imports were down.
- Some of this may be due to traders trying to get ahead of the tariffs on $200 billion that started September 24, and some due to the fall in the Chinese currency. But mainly it reflects the strength of the US economy, where incomes and imports are rising, and the weakness of the Chinese economy, where incomes and imports are slowing.
- Canada joins renegotiated NAFTA
-- WSJ: 10/1
| NYT: 10/1
| FT: 10/1
| WP: 10/1
| Economist: 10/6
- New agreement to be called USMCA: U.S.-Canada-Mexico Trade Agreement. Agreement was reached late on Sunday Sep 30, a deadline for reporting it to Congress for signing before Mexico's new president steps in.
- Most was agreed previously between US and Mexico, including tightened rules for auto imports and provision for possible future renegotiation. Canada now signs on with a few additions, including expanded imports of dairy.
- Compared to NAFTA, the new agreement reduces trade in cars, expands it slightly in dairy, and adopts many of the features of the Trans-Pacific Partnership that Trump had pulled out of in 2017.
- USMCA is considered a template for future trade policy under Trump
-- WSJ: 10/4
| NYT: 10/6
- The success of renegotiating NAFTA signals US policy for others: threaten allies with tariffs to get concessions, then expand alliances against China. This has now worked with South Korea, Mexico, and Canada.
- USTR called the USMCA a "paradigm-shifting model" of US policy, sending a tough message to other trade partners. There will be less concern about following WTO rules and also less interest in promoting cross-border supply chains. Access to the US market will depend on other countries following US rules and standards, including on intellectual property and labor.
- The intent is to apply the same approach to negotiations with Japan and the EU, talks with both of which have already begun.
- Earlier in 2018, US considered a ban on visas for students from China
-- FT: 10/2
- "Hawks" in the US administration encouraged Trump to stop providing student visas to Chinese nationals. Proposal was dropped out of "concerns about its economic and diplomatic impact."
- Proposal arose out of concerns about Chinese espionage, but it was said to have additional benefits in hurting elite universities who have criticized Trump. The "director of the FBI, said his agency was increasingly worried about China’s use of 'non-traditional' intelligence collectors, including students, professors and scientists."
- Arguments against the proposal included that it would hurt smaller colleges, would reduce the US trade surplus in services, and shut off a flow of skilled immigrants that contribute to the US economy.
- Trump signs amended KORUS
-- NYT: 9/25
| Economist: 9/27
- The Korea-US trade agreement, KORUS, had been amended in negotiations earlier this year. This week President Trump signed it. The original agreement had been negotiated by Obama. This is the first trade agreement of Trump's administration.
- The amended agreement is said to include steps to open the Korean market further to US exports, especially cars, while extending to 2041 the US 25% tariff on Korean trucks. In fact, while the agreement will double the number of cars the US can easily export (under US safety standards instead of Korean), the US has not come close to reaching the current lower limit.
- A promised "side deal" on currency manipulation has not yet been completed. Little in the agreement will reduce the US bilateral trade deficit with Korea, which had begun to decline in 2017.
- The US will exempt Korea from Trump's tariffs on steel, in return for Korea's separate promise to limit its exports to 70% of their average in 2015-2017. It does not promise to exempt Korea from new tariffs on cars, if these are imposed. This omission may prevent approval of the amended agreement in Korea's parliament.
- Trade war-prompted support for US farmers
-- FT: 9/30
| WP: 9/21
- The Trump administration plans $12 billion in aid to farmers, who are victims of the tariffs that were levied by China and others in retaliation against US tariffs. Farmers were already suffering from a slump in incomes that have fallen steadily since 2014.
- Support includes $1.2 billion purchases of US farm products to support their prices. The products purchased are contributed to food banks, which welcome them but find it a challenge to manage them and may find they have more than they can use.
- Hit particularly hard are soybean farmers, whose product won't be purchased. Instead, the government has begun paying farmers directly. In addition, Taiwan has promised increased purchases of soybeans from the US.
- NAFTA negotiations try to include Canada
-- WSJ: 9/29
| NYT: 9/29
| FT: 9/28
- Mexico's new incoming president, López Obrador, is pushing to include Canada in the renegotiated NAFTA. He and Canada's leader, Trudeau, agree on the importance of doing that. The US has a deadline of Sunday September 30 for an agreement.
- The US want Canada to join the agreement on the same terms already agreed with Mexico, but that does not include several features that are considered crucial by Canada.
- Canada wants to keep its protections of dairy, its "cultural exception," and NAFTA Chapter 19 that allows appeals against US anti-dumping duties.
- Trump imposes more tariffs on China
-- WSJ: 9/18
| NYT: 9/18
| FT: 9/18
- As he said he would, Trump placed tariffs on $200 billion more of China's exports, to go into effect on Monday Sep 24.
- Tariffs are 10%, but will rise to 25% at year end if no deal is reached.
- “I urge China’s leaders to take swift action to end their country’s unfair trade practices. Hopefully, this trade situation will be resolved, in the end, by myself and President Xi [Jinping] of China, for whom I have great respect and affection,” Mr Trump said in a statement.
- China responds to Trump's tariffs.
-- WSJ: 9/22
| FT: 9/18
| WP: 9/18
- China says it will retaliate with more tariffs on $60 billion of US exports.
- China cancelled trade talks that had been planned with the US.
- Trump has said he will respond to China's retaliation with tariffs on another $257 billion of China's exports.
- Pakistan will increase tariffs to avoid currency crisis
-- FT: 9/18
- Pakistan announces that it will raise tariffs on 5,000 different items to cut its budget and trade deficits.
- The new government says it inherited a large budget deficit and an impending currency crisis.
- Tariffs will be placed on goods such as "powerful cars, more expensive mobile phones and jewelry."
- US and EU meet for talks on trade
-- WSJ: 9/10
| NYT: 9/10
| FT: 9/10
- US Trade Representative Robert Lighthizer and EU Trade Commissioner Cecilia Malmström held their first formal meeting in Brussels to seek solution to trade tensions. Their next meeting will be at the end of September.
- President Trump has promised to hold off on tariffs against European cars while these negotiations continue. The talks are unlikely to move quickly, which may strain the patience of President Trump.
- The intent is to "complete a framework for cutting tariffs and non-tariff trade barriers in November." More specifically, they hope for "an early harvest in the area of technical barriers to trade."
- ECB confirms plans to end quantitative easing while keeping interest rates low
-- WSJ: 9/13
| FT: 9/13
- The European Central Bank, after years of maintaining ultra low interest rates through its program of bond buying (quantitative easing), confirmed its intent to phase out that program by the end of this year. It will however keeps its interest rate at the current record low of −0.4% at least through the middle of 2019.
- The delay in raising interest rates after these were raised in the US by the Fed has contributed to the fall in the dollar value of the euro. It is motivated by forecasts that economic growth in Europe is slowing.
- At the same time, the Bank of England was similarly cautious, holding its interest rate low.
- India acts to reduce imports
-- FT: 9/15
- Responding to increases in its current account deficit (i.e., mostly its trade deficit) and its depreciating currency, India's government announced its intent to curb imports of "non-essential items" and to boost exports.
- The Indian currency, the rupee, has fallen to an all-time low in spite of efforts by the India central bank to resist that fall, costing it a substantial loss in international reserves. This happened in spite of (or perhaps because of) recent rapid growth in Indian GDP.
- Exactly what policies will be used to limit imports was not stated, though the Finance Minister promised that they would be "compliant with India’s World Trade Organization commitments."