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The Bangladesh Better Business Forum, a high-profile government-businesspeople platform, Wednesday elaborately discussed over 100 recommendations for improving business and investment atmosphere to attain desired economic growth.
   The recently formed forum in its third meeting with its chairperson chief adviser Fakhruddin Ahmed in the chair at the CA’s office discussed the recommendations placed by five thematic working groups of the BBBF after working out them in 23 meetings.
   The recommendations were categorised for their quick, efficient and effective implementation in specific time.
   They were categorised mainly in three groups — matter for immediate action which would be implemented immediately, matters for short-term action which would be implemented within next one to two months and matters for midterm action which would be implemented within four to six months.
   Management and financing of Small and Medium Enterprise for its overall development and development of ICT sector figure prominently in the immediate-action recommendations.
   Recommendations covered in short-term action group include expansion of Tax Holiday, providing tax facility, simplification of company registration, trade license, VAT and environment certificates, reduction of bank interest and development of work efficiency.
   Maximum of these dos will be addressed in the coming budget.
   Other recommendations would be placed in the next meeting of the forum to make them implementation-worthy after refining those in the working groups.
   The BBBF hopes that if these decisions are implemented, it will have positive impacts on overall business and investment in next two to three months. ‘As a result, country rating regarding business will be improved and overall image of the country enhanced,’ the meeting was told.
   Chief adviser Fakhruddin directed the ministries, departments and organisations concerned to implement those recommendations on priority basis.
   ‘Necessary monitoring and evaluation would be carried out to supervise whether the decisions are being implemented,’ he said.
   The chief adviser thanked the thematic working groups for their efforts put in preparing the recommendations.
   Bangladesh Bank, NBR, Registrar of Joint Stock Company, City Corporation and BTRC would implement their relevant decisions, according to BOI executive chairman Kamal Uddin Ahmed, also member- secretary to the forum.
   The meeting observed that the activity of the BBBF is a continuous process as business and investment is an ongoing concern.
   The thematic working groups would keep up their activities according to their working areas and would present recommendations to the Better Business Forum regularly.
   The next meeting of the BBBF would be held at the end of next month to review the latest developments, according to the chief adviser’s press secretary Syed Fahim Munaim, who was present at the meeting.
   Finance adviser, law adviser, special assistant to the chief adviser for industries ministry, special assistant to chief adviser for power and energy ministry, cabinet secretary, Principal Staff Officer of the Armed Forces Division, BOI chairman, BTRC chairman, chairmen and co-chairmen of the five thematic working groups, business representatives and secretaries concerned were present at the meeting.

Record-breaking oil prices paused on Wednesday after spiking near 120 dollars per barrel, as international concern mounted and the world’s top producer appealed for calm over soaring energy costs.
   New York’s main oil futures contract, light sweet crude for delivery in June, added four cents to 118.11 dollars a barrel. The May contract had struck a record high 119.90 before expiring Tuesday.
   London’s Brent North Sea crude for June delivery firmed seven cents to 116.02 dollars on Wednesday, after hitting a lifetime peak of 116.75 on Tuesday.
   Prices soared to historic heights on Tuesday as an attack on crude pipelines in Nigeria further tightened global energy supplies, which are under intense pressure with crude cartel OPEC refusing to raise short-term output.
   Additional support came from the weak US currency, which makes dollar-priced oil cheaper for foreign buyers and stimulates demand. The euro surged past 1.60 dollars for the first time on Tuesday.
   ‘Market sentiment is bullish in the immediate term,’ said Victor Shum, senior principal of Purvin and Gertz energy consultancy in Singapore.’
   ‘The weak US dollar, real supply disruption in Nigeria... are pushing prices higher.’
   Later on Wednesday, traders will focus on the latest weekly report on American energy stockpiles. The release is a focal point because the United States is the biggest energy consumer in the world, followed by number two China.
   News of falling US energy inventories could send prices beyond the psychological barrier of 120 dollars, traders said.
   However, Shum added that there was increasing concern that the current price rally ‘has been too much and too fast.’
   In Rome on Tuesday, ministers from 74 countries at the International Energy Forum said prices should be at acceptable levels for producers and consumers to ensure global economic growth, particularly in developing countries.
   US president George W Bush also expressed concern at the impact of high price levels on consumers.
   Saudi Arabia’s petroleum minister, Ali al-Naimi, called Tuesday for calm in the face of runaway oil prices, and added that the world was not running out of crude.

The Federation of Bangladesh Chamber of Commerce and Industry will submit a 592-point recommendation at a pre-budget meeting today, seeking substantial changes in import tariff, income tax and VAT provisions.
   The recommendations in three separate sets will be placed before the government for consideration while preparing the next budget for the fiscal 2008-09.
   The apex trade body’s recommendations will be discussed at the 29th pre-budget meeting of the National Consultative Committee of NBR on budget at the Bangladesh-China Friendship Conference Centre.
   The National Board of Revenue and the FBCCI jointly organised the consultation, considered the biggest pre-budget meeting, with finance and planning adviser AB Mirza Azizul Islam as chief guest.
   NBR chairman Muhammed Abdul Mazid, senior officials, and FBCCI president Annisul Huq, vice presidents and directors, leaders from important trade bodies, as well as academics, economists and experts are expected to attend the meeting.
   In its 340-point recommendation on import tariff, the FBCCI was critical about what it said the ploy of the International Monetary Fund and the World Bank to de-industrialise the economy.
   ‘The existing tariff structure is the customized de-industrialisation and market opening ploy of the World Bank and IMF, thrust upon the victims comprising poor and the least developed countries,’ the FBCCI observed in its recommendation.
   It said the pro-import tariff structure and removal of development surcharge on imports of nearly 2,600 finished and luxury goods have triggered a surge of subsidised imports, forcing the local manufacturing to struggle against cheaper Chinese and Indian products.
   The apex trade body will recommend the government to reduce the import duty on industrial raw materials, capital machinery and spare parts to one percent while 10 per cent for intermediate goods and 25 per cent for the finished products.
   It will also suggest imposing specific amount of import duty on essential items and exempt them from mandatory pre-shipment inspection.
   The FBCCI will also recommend cancelling the mandatory pre-shipment inspection as soon as the cost-raising measure completes its existing period in August this year.
   It will make a 139-point proposal on individual income tax and corporate income tax at the meeting, urging the government to fix income tax exemption limit to Tk 300,000 while keeping the minimum tax unchanged at Tk 2,000.
   It will also urge raising the slabs of taxable income and charge lower tax rate on the slabs, and will demand exempting women entrepreneurs from tax on income up to Tk 350,000 while senior citizens up to Tk 450,000.
   The Federation will also recommend reducing corporate income tax rate and creating a difference between the rates of listed companies and non-listed companies.
   It will also recommend that the corporate tax of commercial undertakings of the NGOs should be 45 percent, but it should be 35 per cent if the companies were converted as publicly traded companies and enlisted with the stock exchanges.
   ‘The investments made by NGOs in commercial undertakings shall be deemed as income and shall be taxed accordingly,’ the FBCCI maintained.
   It will seek substantial tax holiday measures, including 5 years for RMG units outside EPZs, as the exemption expires in June this year. It will also seek exemption from tax on turnover.
   Other recommendations will include increasing powers of the Tax Ombudsman, as he could not issue final order.
   The apex trade body will suggest simplifying the VAT collection procedure, as they think that the existing procedure was complex and cause harassment.

The Meghna Group of Industries will invest in ship building and dockyard industries in the country, targeting the rapid growing small ship building market of the world.
   Chairman and executive director of the Meghna group of industries Mostofa Kamal said this at a ceremony on the occasion of a deal signing between the Meghna Ship Builders and Dockyard Limited and the STX Heavy Industries Company Limited of South Korea at the Meghna Group head office at Gulshan in Dhaka on Wednesday.
   Under the agreement, the Korean company will provide technical cooperation, machineries and equipment for the Meghna Ship Builders for constructing a shipyard.
   Mostofa Kamal said the small ship building market across the world was around $400 billion. ‘If the country could grab one per cent share of this growing industry, it would be able to take the lead of the export oriented industries of the country after readymade garments industries.’
   IL Park, deputy chief of the Korean embassy, said his country would give all kinds of support relating to this industry.
   WG Jang, vice-chairman of the STX Heavy Industries Limited, Kim Hyun Kyu, executive managing director of the company, BH Sim, Do-Kee Park and Hanil Kim other representative of this company also were present at this programme.

The Indian government Wednesday said a free trade agreement with China was not a ‘priority’ for India due to ‘deep divisions’ within the government and opposition from the industry.
   ‘This is an issue in which there are deep divisions both within the government as well as within the Indian industry,’ minister of state for commerce and industry Jairam Ramesh said in the Rajya Sabha.
   As of now, pursuing an FTA with China is not a priority, he said, adding that ‘no final decision will be taken on a free trade agreement with China without consultation with all stakeholders including industry’.
   India and China have set up a joint study group to ascertain the feasibility of an FTA.
   While negotiations are underway, industry bodies like FICCI and Assocham have asked the government to adopt a cautious approach before signing the agreement, arguing that resultant tariff cuts will see Chinese goods flooding Indian markets.
   China has become India’s number one trading partner with a massive increase in trade volume in the last few years.
   India has already signed trade agreements with Singapore, Sri Lanka, Bhutan, Nepal and is a signatory to the South Asian Free Trade Agreement.
   To a separate question, he said Pakistan has violated international law by not granting Most Favoured Nation status to India despite New Delhi extending it to Islamabad. He said despite Pakistan not granting MFN status to India, trade between the two has increased with exports to that country touching $1.6b and imports about $400m.

The Dhaka Chamber of Commerce and Industry and the embassy of the Kingdom of Netherlands jointly held a seminar on ‘business to business promotion (B2B) between the Netherlands and Bangladesh’ at a Gulshan hotel in the Dhaka city on Monday.
   Salauddin Abdullah, senior vice-president of the DCCI, Fritz Meijnder, head of economic affairs and development cooperation and deputy head of mission of the Netherlands embassy, attended the seminar, said a press release.
   Salauddin Abdullah said, ‘Bangladesh offers immense investment opportunities for the Netherlands in the textiles, RMG, jute, leather, ceramics, pharmaceuticals, steel and gas-based industries.
   He observed, ‘In spite of having a lot of opportunities, bilateral trade between the two countries is not at a satisfactory level’.
   He, however, expressed hope that the private sector development programmes would enhance bilateral trade and investment between the two countries.
   Fritz Meijnder said that there was lack of interest from investors of both countries for joint venture projects; therefore, these types of programmes are arranged to bridge gap between the parties.
   Managing partner of Waste Concern lftekhar Enayetullah gave a multi-media presentation on its ongoing project of bio fertiliser plant in Dhaka. The project is a joint venture with the Netherlands.

Ministers from 74 countries attending the International Energy Forum here expressed ‘concern’ Tuesday at high oil prices, which topped a record 119 dollars.
   ‘Ministers expressed concerns over the current level of oil prices,’ the IEF said in a final statement issued after three days of talks.
   ‘Oil prices should be at levels that are acceptable to producers and consumers to ensure global economic growth, particularly in developing countries,’ it said.
   The IEF, held every two years, brought together oil producers and consumers for three days of closed-door talks in the Italian capital to tackle issues such as soaring energy prices, growing demand, security of supply and concerns about global warming and the environment.
   But it was prices, rising to records on an almost daily basis of late that dominated proceedings.
   International Energy Agency chief Nobuo Tanaka warned that high oil prices could tip the world economy into recession.
   British Energy Minister Malcolm Wicks said: ‘Many of us feel that it would be a good thing for the world economy if prices were significantly lower than where they are at the moment.’
   Nevertheless, the Organization of Petroleum Exporting Countries, which produces about 40 per cent of the world’s oil, denied that it was in a position to change the situation, which it blamed on speculators.
   OPEC also pointed to soaring production costs, which have risen by 50-60 per cent in the last few years as a result of wage inflation and equipment costs.
   ‘Oil prices haven’t really been a boon to producers,’ said OPEC’s secretary general Abdalla Salem El-Badri.
   Italian economy minister Perluigi Bersani who co-hosted the meeting, said stabilising prices was paramount, since it was high volatility rather than actual price levels that harmed investment.
   The IEF also had to work against perceptions that world oil and gas resources were about to dry up in the face of soaring energy demand, the forum said.
   Global oil and gas resources were ‘sufficient to meet world needs over the next decades,’ the IEF insisted.
   Saudi Arabia Petroleum Minister Ali al-Naimi agreed.
   ‘I can assure you unequivocally that the world is not running out of oil,’ he insisted, pleading for calm.
   The root of the problem was primarily due to ‘limited capacity along the entire supply chain .... at its heart, this is not an energy resource issue; it is primarily an investment issue,’ he said.
   OPEC coincidentally announced it would raise production capacity by five million barrels per day by 2012 and by nine million bpd by 2020 from current output levels of about 32 million bpd.
   The IEF said it welcomed the development of alternative energy sources.
   But one such source — biofuels — came under heavy fire, with participants roundly blaming it for the current food crisis sparked by rising agricultural prices.
   ‘Ministers highlighted some drawbacks and limits of biofuels,’ the statement said.
   Biofuels were developed as part of plans to limit and reduce greenhouse gas emissions, held responsible for global warming, but since they take up land that would otherwise be used for food production, they have been increasingly blamed for soaring food prices.
   The IEF said a ‘realistic and comprehensive assessment’ of the future economic and evironmental implications of biofuels had to be drawn up.
   With fossil fuels, such as oil, gas and coal, set to dominate the energy mix ‘for decades to come,’ the IEF said countries should improve their energy efficiency.
   At the same time, carbon capture and storage technology was ‘an important option to reduce greenhouse gas emissions from fossil fuels,’ the forum said.
   ‘CCS development and deployment will play a crucial role in delivering a sustainable energy future.’
   The next IEF will be hosted by Mexico in 2010.

US rice futures rose to a fresh all-time high on Wednesday on worries about supply shortages which have triggered political unrest and export restrictions designed to protect dwindling domestic stocks.
   Chicago Board of Trade July rough rice futures hit a record high of $24.745 per hundredweight and stood 1.5 per cent or 36 cents higher at $24.56 in early European trading.
   Prices have risen about 68 per cent since the start of 2008.
   ‘Some of the main rice producing countries have imposed export curbs ... and this has combined with low global stocks to drive rice higher,’ said Kenji Kobayashi, a grains analyst at Kanetsu Asset Management in Tokyo.
   ‘Rice has been hitting successive records. It’s neared $25 and I think $30 is now on our horizon,’ Kobayashi said.
   Trade bans have been put in place by India, the world’s second largest rice exporter in 2007, and Vietnam, the third biggest, in the hopes of cooling domestic prices of the staple food. Thailand is the largest exporter.
   The export curbs have been criticized by the Asian Development Bank, which said Asian governments were over-reacting to surging food prices by resorting to market-distorting measures.
   The bullish mood was reinforced by news that Japan had failed to buy any rice at an import tender held on Tuesday either because prices were too high or there were too few participants, a trade source said.
   Exporters also said Thai 5 per cent broken grade white rice could rise more than 30 per cent to $1,300 per tonne by May due to strong demand from the Philippines.
   CBOT soybean prices also rose with the May contract up 7-3/4 cents at $13.82-1/2 a bushel, boosted by bullish export prospects and jitters about the Argentine labour situation.
   ‘Soybean prices have rebounded following a sharp contraction in March as the US supply situation appears less assured than previously expected,’ Rabobank commodity analyst Luke Chandler said in a report on Wednesday.
   ‘Higher exports due to the Argentinean stoppages together with strong competition from corn for available acreage and robust demand conditions have provided soybeans with a more optimistic price scenario in 2008,’ he added.
   Argentine president Cristina Fernandez on Tuesday called for calm as talks with farm leaders grew more tense raising expectations in financial markets that farmers might go back on strike.
   Wheat prices, however, were lower with a favourable crop outlook sparking a significant drop in prices during the last few weeks from record levels reached earlier this year.
   China’s top wheat growing provinces of Henan and Shandong are likely to have a bumper winter wheat harvest following recent rains, the Xinhua news agency said, quoting local agricultural authorities.

Alitalia flew into the unknown on Tuesday after Air France-KLM withdrew its takeover offer, leaving Italy’s long-struggling flag carrier with little choice but to contemplate bankruptcy or receivership.
   The French-Dutch giant shut the door on exclusive negotiations in an announcement late Monday ending three weeks of speculation that it might return to the table it left on April 2.
   Alitalia, with little cash on hand and haemorrhaging funds, appears to have little choice but to go into receivership and almost certain bankruptcy.
   Trading in Alitalia shares was suspended on Tuesday as the company was expected to issue a statement following the Air France-KLM pullout.
   Outgoing prime minister Romano Prodi met key aides and Alitalia’s ex-chairman Maurizio Prato on Tuesday, and a government official told AFP the full cabinet would meet on Wednesday.
   Italian radio said transport and economy ministers Alessandro Bianchi and Tommaso Padoa-Schioppa were at the Tuesday meeting along with Prato, who resigned as Alitalia’s chairman on April 2 after rejecting new demands by the airline’s unions.
   The outgoing government could decide to make an emergency bridging loan to the airline despite the threat of EU sanctions.
   On Tuesday, a European Commission spokesman said in Brussels that the body was in contact with Italy over the fate of Alitalia but has not been informed of any state bailout plans.
   Commission transport spokesman Michele Cercone told reporters that Alitalia, which is losing about one million euros ($1.6m) a day and had about 170 million euros in the bank at the end of March, could not receive state aid until 2011 under EU rules.
   The crisis comes as Italy awaits the inauguration in mid-May of conservative leader Silvio Berlusconi as prime minister for the third time since 1994 after his coalition scored a comfortable victory in elections last week.
   The Italian government has been trying for years to sell off its 49.9 per cent stake in the airline.
   It could decide to place the company in receivership, naming a special administrator who would decide whether to restructure the firm or begin bankruptcy proceedings. In Paris on Tuesday, an Air France-KLM spokeswoman said the company was relieved after announcing the decision.
   ‘Alitalia’s economic situation had deteriorated from the time Air France-KLM launched its bid on March 14,’ she said, citing the rising price of oil, a severe hardship for Alitalia, and its ageing fleet of fuel-guzzling aircraft.
   Investors cheered the decision by Air France-KLM, whose shares were flat at 19.32 euros after early gains while the broader Paris market was down 0.58 per cent in mid-afternoon trade.
   If Alitalia were to go into legal receivership, which is likely in the absence of a fresh injection of funds, Air France-KLM could be interested in some of Alitalia’s operations, such as maintenance, according to one Paris analyst.
   A tie-up between Alitalia and Aeroflot of Russia, mooted by Berlusconi after he met Russian President Vladimir Putin last week, could also favour Air France-KLM, Aeroflot’s partner in the Sky Team alliance.
   Aeroflot’s deputy chairman Lev Koshlyakov said in Moscow on Tuesday that the airline planned to resume negotiations with Alitalia on an ‘order’ from Putin, the Ria Novosti news agency reported.

European aircraft manufacturer Airbus on Tuesday announced what it called a sharper than normal hike in its catalogue prices for aircraft in the face of a weak dollar and higher material costs.
   Airbus, a unit of European aerospace giant EADS, said prices for its single-aisle aircraft will rise two million dollars, with four million dollars added to its wide-body and longer range planes.
   ‘Over the last 12 months the euro versus US dollar exchange rate moved from 1.35 to almost 1.60, which translates into a devaluation of more than 15 per cent,’ Airbus said.
   The Airbus announcement came on a day when the dollar, pummeled by mounting fears for the health of the US economy, tumbled through the historic 1.60 dollars level against the euro after more weak US economic data.
   Airbus said added that ‘prices for metal products ... have gone up by at least 6.5 per cent and costs for industrial products in the euro-area increased by 5.0 per cent in the course of 2007.’
   It said titanium, steel, aluminium and aluminium-lithium account for at least 40 per cent by weight in aircraft design.
   Industry analysts noted that prices affected by the increase were baseline prices. Contracts covering aircraft sales are usually the result of bargaining and it is not unusual for a manufacturer to offer major rebates when trying to secure a new client.
   An Airbus spokesman recalled that orders for Airbus planes had held up well, with the 2008 performance living up to expectations thus far.
   The company order book now stands at more than 3,700 planes, the equivalent of six years of production.

Sales of existing US homes slid further in March, an industry group reported Tuesday, in a report underscoring the extended slump in the housing market.
   The report showed a monthly drop of two per cent and 19.3 per cent plunge year over year in existing home sales, the largest segment of the housing market.
   The National Association of Realtors said the annualised sales pace was 4.93 million, weaker than the 4.95 million expected by Wall Street economists. Sales resumed their decline after a slight up-tick in February.
   This reflects a meltdown in the property market after years of sizzling growth and a speculative bubble. The boom-and-bust has slammed the entire economy and led to rising foreclosures and massive losses for banks.
   The median existing-home price for all housing types was 200,700 dollars in March, down 7.7 per cent from a year ago.
   The association said existing home sales have been uneven with the steepest declines in high-cost areas, providing ‘a downward pull to the national median’ price.
   Lawrence Yun, NAR chief economist, said the problems in the banking sector are also having an effect on the market.
   ‘Though mortgage rates are at historically low levels, some borrowers are facing restrictive lending practices in declining markets,’ he said.
   ‘At the same time, many buyers continue to bide their time with a large number of homes to choose from, while other potential buyers remain on the sidelines.’
   In another sign of the troubles for housing, inventory rose 1.0 per cent at the end of March per cent to 4.06 million existing homes. That represents a 9.9-month supply at the current sales pace, up from a 9.6-month supply in February.
   Single-family home sales fell 2.7 per cent for the month are 18.4 per cent below pace in March 2007, the report showed. The median existing single-family home price was 198,200 dollars in March, down 8.3 per cent from a year ago.
   Existing condominium and co-op apartment sales rose 3.6 per cent for the month but are 25.5 per cent below the level a year ago. The median existing price for this segment was 2.8 per cent lower than March 2007.

The Prime Bank Limited opened its 2nd off-shore banking unite at the Chittagong Export Processing Zone on Tuesday.
   Brigadier General Ashraf Abdullah Yusuf, executive chairman of the Bangladesh Export Processing Zone Authority, inaugurated it as chief guest, said a press release.
   Hasina Khan, vice-chairperson of board of directors of the bank, was the special guest while the programme was chaired by M Shahjahan Bhuiyan, managing director of the bank.
   DMDs Mahbubul Alam and Syed Mahbubur Rahman were present, among others, on the occasion.

The Grameenphone Ltd has recently signed an agreement with the Gulshan Club Limited to provide communication facilities under its business solutions package.
   Under the agreement, the club is being provided communications solutions tailored to its needs, including voice, data and other services.
   M Faizul Islam (Selim), president of Gulshan Club, and Laszlo Barta, director, sales of Grameenphone, signed the deal for their organisations, said a press release.
   Other high officials from both the sides were present on the signing occasion.

A lucky coupon draw was recently held at the Transcom Electronics Ltd based on the campaign of ‘Beat the Heat of Summer & Changhong Superhit Offer’.
   A brand new car (Maruti Suzuki, 800 CC) was won by Razib Chowdhury, Sherpur, Bogra.
   Obaidur Rahman Khan, executive director of Transcom Electronics, handed over the key of the car to the winner at a function held at the Transcom Electronics head office at Mohakhali in the Dhaka city on Tuesday, said a press release.
   Arshad Huq, GM sales & marketing, Habibur Rahman Mollah, and GM, finance and accounts, were present at the hand-over ceremony.

The euro eased on Wednesday but held close to the record high point above 1.60 dollars which it struck on Tuesday amid strains in the US economy and comments from the European Central Bank, dealers said.
   In early European trading, the European single currency dipped to 1.5956 dollars, from 1.5988 in New York late on Tuesday, when it had struck a lifetime pinnacle of 1.6019.
   Against the Japanese currency on Wednesday, the dollar eased to 103.20 yen from 102.98 on Tuesday.
   A member of the European Central Bank’s rate-setting council, Christian Noyer who heads the Bank of France, backtracked in press remarks on Wednesday from implying that eurozone rates might rise to contain inflation.
   ‘ECB’s Noyer is quoted today, saying that his comments yesterday, which the markets took as a hint that the ECB could be leaning towards raising rates, had been over-interpreted,’ said ABN Amro analyst Melinda Smith.
   ‘This could dampen the upward move of the euro, but given the ECB’s hawkish stance and unwillingness to cut rates, plus the dollar’s weakness, there could be more upside potential for the pair.’
   Noyer told the Wall Street Journal on Wednesday, after the euro had broken briefly above 1.60 dollars the day before, that eurozone interest rates could be changed upwards but also downwards.
   The newspaper, reporting that Noyer said that financial markets had over-interpreted his remarks on Tuesday, cited him as explaining in an interview: ‘Movements (of interest rates) can go both ways.
   ‘I would never engage in a discussion about the future path of interest rates, simnply because nobody knows. It would be dangerous to make predictions in either direction.’
   On Tuesday, Noyer had said on French radio that the ECB would change interest rates ‘if necessary’ to reduce inflation to less than 2.0 per cent next year.
   Taking a similar line on Tuesday, another member of the governing council of the ECB, Yves Mersch who heads the central bank of Luxembourg, had said that eurozone rates were unlikely to fall in the foreseeable future.
   The ECB has held its key short-term interest rate at 4.0 per cent since June, despite concern in some quarters that this rate, compared with 2.25 per cent in the United States, is an important factor in the rise of the euro against the dollar which is squeezing some exporters.
   The US currency was hit on Tuesday by weak US housing news and fresh worries about the health of the US economy.
   Markets are expecting the Federal Reserve to trim interest rates again next week, widening the gap with eurozone rates, but there is uncertainty over how aggressive the reduction is likely to be.
   On Wednesday, the Swedish central bank, the Riksbank, decided to hold its key short-term interest rate, the repo rate, at 4.25 per cent. Sweden is a member of the European Union but not of the eurozone.
   The British pound steadied, meanwhile, after it emerged that Bank of England policymakers voted 6-3 in favour of an interest rate cut to 5.00 per cent earlier this month.

Japan, EU seek urgent action on food prices
Leaders of Japan and the European Union called Wednesday for urgent action to address rising food prices, which they warned could worsen poverty and hurt the global economy. Japan, which imports more than half of its food, has said it will raise the issue of spiralling food prices when it hosts the summit of the Group of Eight rich nations in July. Japanese prime minister Yasuo Fukuda and top EU leaders including European Commission president Jose Manuel Barroso voiced ‘strong concern’ about the prices of food, oil and other commodities in a joint statement after a summit. The high prices ‘could slow down the growth in the global economy and have negative effects on developed and developing nations,’ said the statement, also signed by Prime Minister Janez Jansa of Slovenia, the current EU president.
— AFP

Singapore inflation
at 6.7pc
Singapore’s annual inflation was 6.7 per cent last month, boosted by higher costs of food, transport, communications and housing, the Department of Statistics said on Wednesday. The March consumer price index figure was down 0.1 per cent from February’s figure, the department added. On a seasonally adjusted basis, the index was 0.3 per cent higher in March compared with the previous month, it said. Inflation reached 6.6 per cent in the first three months of 2008, compared with the same period last year. Singapore is not alone in grappling with inflation. The United Nations food agency on Tuesday said the world faces a ‘silent tsunami’ of soaring food prices and more must be done to help secure future supply. Rising food prices are driving more people in Singapore, the wealthiest economy in Southeast Asia, to join the queue for free meals, charities say.
— AFP