Franc to remain capped
The Swiss National Bank’s currency cap remains necessary and it will not exclude taking further steps should the crisis in the eurozone intensify, vice president Jean-Pierre Danthine said. “We find ourselves in a situation in which the [Swiss] franc is still highly valued and we can’t allow a tightening of monetary conditions,” Danthine said in an interview with the Lucerne-based Zentralschweiz am Sonntag. The franc, which investors buy at times of heightened uncertainty, nearly touched parity with the euro in August 2011, threatening to plunge the country into a recession and prompting the central bank to set a cap of SF1.20 (US$1.28) per euro on the currency a month later. The state of affairs in the eurozone remains precarious and the franc could face further appreciation pressure, Danthine said.
ADB facing funding crunch
The Asian Development Bank (ADB) is facing a funding crunch as the multilateral lending agency seeks to reduce widespread poverty in emerging market nations and boost infrastructure, India warned on Saturday. The Asia-Pacific region, despite boasting the world’s fastest-growing economies, is still home to about two-thirds of the world’s poor, with about 1.5 billion people living on less than US$2 a day. Member countries of the Manila-based bank need to consider ways to increase its resources to meet Asia’s massive needs for infrastructure, economic growth and combat poverty, Indian Minister of Finance P. Chidambaram said. “The support that the ADB can deliver for economic development and poverty reduction in the region will be seriously constrained by the lack of adequate capital,” he told the annual meeting of the ADB’s board of governors.
Dollar’s rise causes tax hike
Prime Minister Julia Gillard said a 50 percent rise in the value of the Australian dollar is squeezing trade-exposed businesses and cutting tax revenue, forcing her government to make “grave” budget decisions. The erosion of tax receipts played a part in the government’s decision to raise healthcare taxation by 0.5 percentage points to fund a national disability insurance program, Gillard said in an interview with Australian Broadcasting Corp television yesterday. The Medicare levy, which funds the government-run healthcare system, will be lifted from a 1.5 percent surcharge on income tax to 2 percent to fund the National Disability Insurance Scheme, which is intended to provide lifelong support for people with disabilities and their families. That will raise about A$3.3 billion (US$3.40 billion) in its first year, the government said.
Cameron plans growth boost
Prime Minister David Cameron will speed up the patents applications process and simplify intellectual-property rights for design companies as part of his next legislative program, a person familiar with the plans said. The measures are aimed at boosting the economy and will be at the center of the government’s agenda announced by Queen Elizabeth II when she formally opens parliament in London on Wednesday, said the source, who asked not to be named as lawmakers have yet to be told of the plans. An energy bill encouraging ￡110 billion (US$171 billion) of investment in the electricity industry, another bill cutting national insurance contributions for small businesses and legislation to support the construction of a high-speed rail link between London and the north of England will also be included, the person said.