ASIAN ACTION:CENTRAL BANKS in Asia yesterday joined their western counterparts and cut interest rates in an attempt to ward off the global financial turmoil threatening to stall the region's decade-long economic boom.
The rate cuts in South Korea, Hong Kong and Taiwan, which helped Asian equities stage a modest recovery, came a day after China and six central banks, including the US Federal Reserve and European Central Bank, slashed their rates.
Hopes the global action could spur a recovery in the European and US markets quickly faded yesterday as equities came under further pressure and the frozen money markets showed no signs of thawing. In Tokyo, the Nikkei 225 index ended down 0.5 per cent, while Hong Kong rose 3.3 per cent, having suffered an 8.2 per cent fall on Wednesday, its worst single-session loss since 1973.
Key three-month dollar London interbank rates also rose, while outstanding volumes of commercial paper in the US fell amid signs banks are hoarding cash as investors remained sceptical over the ability of authorities to tackle the crisis of confidence.
Many Asian central bankers are now taking emergency steps to respond to signs of a sharp slowdown in their economies. - (Financial Times service)
