Wed, Jun 06, 2018 - Page 10 News List

World Business Quick take

Agencies

AUSTRALIA

Interest rate kept unchanged

The Reserve Bank of Australia yesterday left the key interest rate unchanged at a record low after the key unemployment metric edged higher. Bank Governor Philip Lowe kept the cash rate at 1.5 percent, where it has stood since 2016, as expected by all economists. The jobless rate hit 5.6 percent in April, moving further away from the bank’s estimated level of full employment. The global picture has also become more clouded amid an emerging-market rout, populism in Europe and US trade tariffs. The central bank has fashioned itself as an anchor of stability in the nation’s economy, making clear that it is unlikely to tighten policy until unemployment falls toward 5 percent and inflation is nearer the midpoint of its 2 to 3 percent target range.

BANKING

Societe Generale settles probe

Societe Generale SA is to pay about US$1.3 billion to resolve a probe into the bribery of Libyan officials and settle a US investigation into interest-rate manipulation, drawing a line under two of the French bank’s biggest legal headaches. The bank is to pay US$585 million to resolve charges with US and French law enforcement agencies related to the Libya investigation and US$275 million for violations arising from helping rig benchmark interest rates. The bank will also pay about US$475 million to the US Commodity Futures Trading Commission to settle the Libor probe, the commission said in a statement on Monday. Legg Mason Inc, a Maryland-based investment management firm, on Monday was also penalized for having a role in the Libyan bribery matter, agreeing to pay US$64 million in a resolution with the US Department of Justice.

FOOD PRODUCERS

Mars to go green for profits

Mars Inc, the maker of its namesake chocolate bar and Wrigley’s chewing gum, is spending US$1 billion on sustainability with a strategy to make greener practices increase profits. The company generated US$35 billion in revenue in 2016. “There is a very concrete business case to this,” Barry Parkin, chief procurement and sustainability officer at Mars, said in a telephone interview. “We’re going to get a payback on that billion several times over.” Parkin is allocating about a third of the funds to making operations more water and energy efficient. Another third is going to simplify supply chains by buying directly from farmers. The remainder would be used to recreate recipes without artificial ingredients. Mars is working to reduce its exposure to environmental, social and governance risks, because it is next to impossible to track exactly where the huge amounts of raw materials that it uses are from, Parkin said.

GREECE

Recovery stays on target

The economy has grown for a fifth consecutive quarter, keeping the nation’s recovery on target as eight years of international bailout programs are due to end in August. The economy grew 2.3 percent in the first quarter compared with the same period a year earlier, the Greek Statistical Authority said on Monday. The growth from the previous quarter was 0.8 percent. The government is negotiating the terms of its bailout exit with eurozone rescue lenders, and parliament is expected to approve a final major round of administrative and cost cutting reforms next week. The government hopes to make a full return to bond markets after August, but the head of the central bank has renewed support for a more gradual approach with a precautionary credit line from bailout lenders.

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