What central banks around the world are doing

AP News
Posted: Oct 19, 2010 3:18 PM
What central banks around the world are doing

The global economic recovery isn't uniform. Countries are emerging from a deep recession at different speeds. That's why central bankers are taking different approaches to stimulate their economies or keep them on a healthy growth path. Here's a snapshot of what some are doing:


_ China's central bank bumped up a key rate on loans Tuesday in a bid to slow its booming economy and fend off potential inflation.

_ Australia's central bank raised interest rates six times beginning in October. More recently, it's held rates steady, citing concerns about Europe's debt crisis.

_ India has raised rates five times to control inflation and is expected to boost them again.

_ Canada has left its rate alone after three rate increases.


_ The Federal Reserve is expected next month to launch a program to buy more government bonds. As the Fed buys Treasury bonds, the rates on those bonds would fall. Rates on mortgages, corporate debt and other loans pegged to Treasurys would drop, too. The Fed's goal is for those cheaper loans to entice Americans to spend more. Stronger sales could make businesses borrow, spend and hire. The Fed has held its benchmark rate at a record low near zero since December 2008.

_ Japan this month cut its rate to near zero to try to boost its stagnant economy and battle deflation. Deflation is a widespread drop in prices, wages and the values of stocks and homes. Japan also planned to set up a $60 billion fund to buy government bonds and other assets to boost the economy.


_ The Bank of England has held interest rates steady at a record low for the 19th consecutive month, awaiting a clearer picture on its economic recovery.

_ The European Central Bank also has left its key rate alone.

_ South Korea, which has rebounded, recently held its key rate steady.