Lanka offers stimulus package to ride out global recession

AFP, Colombo

Sri Lanka announced Wednesday a 16 billion rupee (141-million dollar) stimulus package that included reducing fuel prices to shield the economy from the global slowdown.

"We want to maintain our economic growth rate at six percent or more -- as it has been in the past few years -- through this economic stimulus package," Central Bank of Sri Lanka Governor. Nivard Cabraal. told reporters.

The price of diesel was reduced by 12.5 percent while gasoline was lowered by less than two percent.

Expenses of government ministries, parliamentarians, ministers, the prime minister and the president were slashed by between five and 50 percent under the new scheme.

The price of gas used in cooking stoves was reduced by 10percent and the government also removed a 15 percent electricity surcharge on the clothing, tourism, leather and rubber industries.

Taxes on rubber exports will be removed, while fertiliserwill be sold to small tea farmers at subsidised rates.

Tea. the island's biggest commodity export, will benefit from a suspension of loan repayments. Tea factories are also eligible for one month's working capital through commercial banks at lower rates.

Fed to ramp up purchases of mortgage securities

AFP, Washington

The Federal Reserve said Tuesday it would begin buying mortgage-backed securities in early January under a I previously announced plan to purchase up to 600 billion ’ dollars of these assets.

The program was announced in late November as another step in fighting a credit crunch stemming from ■ the collapse in housing that has now engulfed the financial sector and is choking economic activity.

"The program is being established to support the mortgage and housing markets and to foster improved conditions in financial markets more generally," the Fed said in 1 astatement.

The New York Fed, which will carry out the purchases, said it had selected four investment managers for the program: BlackRock, Goldman Sachs, PIMCO and Wellington Management Company.

"The selection criteria were based on the institution's operational capacity, size, overall experience in the MBS i (mortgage-backed securities) market and a competitive fee structure," the New York Fed said.

The contract for a custodian has not yet been awarded. ' The central bank has already begun purchasing up to 100 billion dollars in mortgage-backed securities on its own and will buy up to $00 billion more through these • investment firms.

Credit Suisse offloads

stake to British firm

AFP, Zurich

Swiss banking giant Credit Suisse said on Wednesday it had sold part of its Global Investors business to Aberdeen Asset Management in return for a 24.9 percent stake in the British fund manager.

The Aberdeen Asset Management stake was valued at 250 million pounds (256 million euros, 358 million dollars) as ofTuesday, Credit Suisse said in a statement.

Switzerland's second largest bank, which like its peer UBS, has been badly hit by the global financial crisis, said the deal involves the transfer of most of GI's business in Europe, the United States and Asia-Pacific, with the funds under management involved being worth 75 billion Swiss francs.

Credit Suisse said it will maintain its activities in its home market and continue to operate the GI business in Brazil and through joint ventures across the globe.

It said the deal allows it to focus on its core operations and boost the value of the GI business.

Thai PM says economy could stili grow in 2009

AFP, Bangkok

Thailand's new prime minister Abhisit Vejjajiva said on Wednesday that there was still a possibility that the country's economy could grow despite the global slowdown.

The Thai economy was battered by a crippling week-long blockade of Bangkok’s airports by protesters earlier this month and has also suffered from the economic problems of its trading partners.

The Bank ofThailand projected Tuesday that the economy will contract at 2.5 percent in the fourth quarter of this year compared to the previous quarter and will be stable at zero percent on a year-on-year basis.

" There is a possibility that the GDP (gross domestic product) will grow on the plus side," Abhisit told report ers, however.

He said he had held discussions with economic experts who predicted that Thailand could maintain growth with a good economic stimulus plan and that the economy could recover by next year's third quarter.