Brazil Unveils $60bn Currency Move
Brazil’s central bank has announced a $60bn plan to prop up the value of the national currency. It comes as the Brazilian real nears a five-year low against the US dollar. The real and other emerging market currencies have fallen steadily over the last three months on speculation of higher US interest rates. The central bank said it would spend $500m a day on Mondays to Thursdays and $1bn on Fridays buying reais in the currency markets.
Eurozone growth hits 26-month high
Eurozone business activity grew at its fastest pace for 26 months in August, according to a closely-watched survey. The Markit composite purchasing managers’ index - which includes manufacturing and services - rose to 51.7 points, from 50.5 in July. A number higher than 50 indicates growth.
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Gold Price Up on Poor US Home Sales
Gold rose almost 2 percent on Friday, hitting its highest price in more than two months near $1,400 an ounce, as a big drop in U.S. new home sales renewed hopes that the Federal Reserve will maintain its bond-buying economic stimulus. For the week, gold gained 1.6 percent for its third consecutive weekly rise. It has climbed in six out of the past seven weeks since gold fell to a three-year low at $1,180 an ounce on June 28.
IMF Cautions Against Withdrawing Stimulus
International Monetary Fund (IMF) chief Christine Lagarde has cautioned the countries across the world against withdrawal of stimulus or unconventional monetary policies (UMPs). Lagarde on Friday asserted that the stimulus helped support economic stability at both domestic and global level. Early in the crisis, the UMPs helped prevent a collapse of the financial system and a collapse of activity, she said.
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Sri Lanka Trade Deficit Widens
Sri Lanka’s trade deficit widened 25 percent to $829.1 million in June from $663.2 million a year earlier, central bank data showed on Thursday. Both imports and exports reversed their declining trend. The central bank’s tight monetary policy measures and a flexible exchange rate, adopted early last year to curb trade and current account deficits, have resulted in sluggish external trade since the second quarter of 2012.
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