- Australia’s unemployment rate in September fell to 5.6percent, down 0.1 percent from May’s 5.5 percent rate, which was the country’s lowest in 23 years. The news, released just two days before the national elections, has been credited with helping secure a fourth term for incumbent Prime Minister John Howard.
- While there has been talk for months of China revaluing the yuan, The State Administration of Foreign Exchange said in mid-October there will be no change to the currency. Unlike most other currencies, the yuan is “pegged” to the U.S. dollar, meaning its value does not fluctuate regardless of the market environment. The current exchange rate is around 8.28 yuan to the dollar, which U.S. manufacturers say is weak and beneficial to Chinese-made goods.
- The Central Bank of Japan announced its “quantitative easing” policy will remain in effect until the country’s CPI has a year-on-year rate above zero percent. The easing policy keeps Japan’s short-term rates near zero, sparking economic growth as the money market becomes flooded with extra funds. However, the bank also said it would consider an inflation target above 1 percent so when the CPI did
return to positive territory, market expectations would be stabilized and a return to deflation would be minimized. - The Reserve Bank of India (RBI) raised its overnight interest rate — the benchmark rate in the country — by 25 basis points to 4.75 percent in late October. The RBI said high inflation concerns were the reason for the raise, although it did keep its longer-term rates on hold. That rate has held steady at 6 percent — a 30-year low — since April 2003. The RBI also cut its GDP forecast for the fiscal year ending in March 2005 to a range of 6 to 6.5 percent, down from its earlier 6.5 to 7 percent target. For fiscal year 2004, the growth rate was 8.2 percent.
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