“Our monetary policy aim is to maintain equilibrium in the
economy,” Prasarn told reporters in Bangkok today. “If we see
that economic momentum slows, we can ease monetary policy to
take care of that.”

The government yesterday lowered its full-year growth
forecast after the economy expanded 5.3 percent in the first
quarter from a year earlier, less than economists estimated.
Arkhom Termpittayapaisith, secretary-general of the state
planning agency, said he is “worried about the second
quarter,” adding that monetary policy could address the
slowdown and also help curb inflows that have boosted the baht.

The baht rose 0.3 percent to 29.72 per dollar as of 1:25
pm in Bangkok, after earlier climbing to its highest level in
two weeks as concerns that the government will impose curbs on
capital inflows abated. The currency strengthened last month to
its highest level since July 1997, and is the best performer in
Asia this year, according to data compiled by Bloomberg.

While the baht may be volatile amid global uncertainties,
the central bank is ready to intervene if needed, Prasarn said,
adding that the Bank of Thailand will analyze first-quarter data
before deciding on the policy rate.

The monetary policy committee is scheduled to meet on May
29. It has held the key rate at 2.75 percent since a 25-basis-point reduction in October, citing risks to the nation’s
financial stability.

Thailand’s state agency yesterday lowered its full-year
forecast for gross domestic product to 4.2 percent to 5.2
percent from 4.5 percent to 5.5 percent. It also cut its export
growth target for the year to 7.6 percent from 11 percent.

Finance Minister Kittiratt Na-Ranong, who has led calls for
lower rates, yesterday said the government has no plans to issue
“abnormal measures” to stimulate the economy, even as it is
concerned about the first-quarter numbers.

To contact the reporter on this story:
Suttinee Yuvejwattana in Bangkok at
suttinee1@bloomberg.net

To contact the editor responsible for this story:
Stephanie Phang at
sphang@bloomberg.net

First, the Fund released the concluding statement from its weeks-long review of the UK economy. Because the Funds chief economist had previously criticized the governments austerity policies, the annual surveillance report was highly anticipated. Unsurprisingly, its a pretty cautious document. The IMF applauds the government for having brought down deficits and for showing welcome flexibility in its fiscal program. There are implicit criticisms. The report warns that planned further fiscal tightening will be a drag on growth and notes that the country is a long way from a sustainable recovery. Overall, however, its far from a public scolding:

In reality, the report is far less stern on the Chancellor than many had anticipated. Yes, theres plenty of verbiage about the problems facing the economy: about the fact that growth has disappointed, that per capita income is still 6% below the pre-crisis peak, that risks facing the economy remain significant, and that the financial system remains in poor health.

However, the critical parts of the document – those that deal with the Chancellors fiscal plans – are far more measured, far less critical, than the IMFs previous comments might have indicated.

Still, Labour politicians are seizing on the reports admonitions:

Labour said that the IMF’s advice echoed its own longstanding call for Mr Osborne to ease up on his cuts. “A sensible Chancellor would listen to the IMF’s advice and take action” said the shadow Chancellor Ed Balls. “Only a reckless Chancellor would try to plough on regardless.”

Meanwhile, in Paris, IMF managing director Christine Lagarde is facing her own personal form of surveillance: a panel of judges is interviewing the former finance minister as part of their investigation into laffaire Tapie. Via Reuters:

Lagarde risks being placed under formal investigation at the hearing for her 2007 decision as Sarkozys finance minister to use arbitration to settle a long-running court battle between the state and high-profile businessman Bernard Tapie.

Under French law, that step would mean there exists serious or consistent evidence pointing to probable implication of a suspect in a crime. It is one step closer to trial but a number of such investigations have been dropped without any trial.

For the moment, key IMF members are steadfast in their support for Lagarde. If the judicial process takes a more serious turn, however, fissures may emerge. The selection process that produced Lagarde was contested, and some emerging powers still resent that the Funds top post remains in European hands.

The US central bank is buying $85 billion a month in
Treasury and mortgage debt to push down borrowing costs and spur
growth.

BNY Mellon, the world’s biggest custody bank, has more than
$26.3 trillion in assets under custody and administration and
$1.4 trillion under management, according to its website.

On US monetary policy

“On balance, the Federal Reserve is likely to err on the
side of caution. They would rather be late in removing
accommodation.”

On demand for Treasuries

BNY Mellon’s flow data show strong demand for Treasuries,
“which to us reflects basic undercurrent of risk aversion
persisting. US Treasuries are the main safe haven of choice.
In contrast, the inflows into other relative safe havens such as
German bunds, Swiss bonds and JGBs have been tapering off.”

On Australian bonds

“We’re seeing a lot of global investors reducing some of
their Aussie-bond exposure and moving to other higher-yielding
markets. We see a lot more flows to Mexico, for example.”

“Australia was benefiting from its linkage to China, and
now Mexico seems to be benefiting from its linkage to the US”

On BOJ policy

“It’s still too early to determine whether the BOJ policy
is going to be effective or not, and I think that’s going to the
key focus in the second half of this year as you get more and
more data.”

To contact the reporter on this story:
Masaki Kondo in Singapore at
mkondo3@bloomberg.net

To contact the editor responsible for this story:
Garfield Reynolds at
greynolds1@bloomberg.net

An International Monetary Fund (IMF) mission led by Ms. Malangu Kabedi-Mbuyi visited Freetown during May 8-21 to carry out discussions for the 2013 Article IV consultation and for a three-year economic and financial program that could be supported by the IMF under the Extended Credit Facility (ECF). The mission held discussions with Minister of Finance and Economic Development, Kaifala Marah; Central Bank Governor, Sheku Sesay; members of Parliament; representatives of the business community; development partners; and other senior officials.

At the end of the mission, Ms. Kabedi-Mbuyi issued the following statement in Freetown:

Sierra Leones economic growth accelerated to15.2 percent in 2012, reflecting the emergence of large-scale iron ore extraction as well as sustained expansion in agriculture, services, and construction. Real Gross Domestic Product (GDP) is projected to grow at 13 percent in 2013. Consumer price inflation declined from 16.9 percent in 2011, to 12 percent in 2012, aided by prudent monetary policy and stable exchange rate. It is forecast to decline further in 2013. Sierra Leones external position improved in 2012, strengthening the reserve coverage.

In the fiscal area, the overall budget deficit reached 5.6 percent of non-iron ore GDP, up from 4.6 percent in 2011 partly reflecting infrastructure investment scaling up and higher spending in goods and services. The deficit was financed largely with short-term treasury bills. For 2013, the budget deficit would be contained below 4 percent of non-iron ore GDP, thanks to the expected increase in revenue mobilization, and enhanced expenditure management.

Policy discussions focused on creating fiscal space to continue supporting investment in infrastructure and human development, reducing inflation to single-digits, facilitating access to financial services, and creating an environment conducive to private sector development and job creation. The mission agreed with the authorities that medium-term structural reforms should focus on bolstering revenue mobilization, strengthening public financial management, maintaining prudent borrowing policies, and deepening financial intermediation.

The mission reached preliminary understandings with the authorities on key elements of a medium-term economic and financial program that could be supported by the IMF under the ECF. Discussions between the mission and the authorities will continue in coming weeks.

The mission wishes to thank the Sierra Leone authorities for candid and constructive discussions in Freetown.

The Bank of Israel said two of the committee’s six members
sided with Fischer and three others sought a 0.5 percentage-point cut. The announcement by e-mail today fueled speculation
that the rate will be lowered again next week. The shekel
weakened to a two-month low and bond yields fell.

“Overall, the debate means that they said, let’s cut 25
basis points, wait, look at market reaction and make the
reduction more gradual,” said Rafi Gozlan, chief economist at
IBI.-Israel Brokerage and Investments Ltd. in Tel Aviv.

The unexpected move on May 13, when no monetary policy
meeting had been scheduled, brought the rate down to 1.5
percent, a three-year low. The central bank cited the continued
appreciation of the shekel, as well as the start of natural gas
production and rate cuts by other central banks.

Committee members who supported the 25-basis point cut
argued that the “moderate reduction,” together with the plan
announced at the same time to purchase about $2.1 billion by the
end of the year, would be sufficient until the scheduled meeting
on May 27 when “the effect of this reduction would be
analyzed,” the bank said.

The other three members of the committee justified their
support for a 0.5 percentage-point cut mainly on developments in
the foreign currency market, it said.

Gozlan said Israeli treasury bills, whose yields fell after
last week’s cut, were already pricing in another reduction. The
yield on the central bank’s one-year Makam bills fell to 1.34
percent today from 1.62 percent before the rate cut.

“The market is pricing in another cut of 25 basis points
and this will likely force the Bank of Israel to cut again,
otherwise it risks an appreciation of the shekel,” Gozlan said
by phone.

To contact the reporter on this story:
Gwen Ackerman in Jerusalem at
gackerman@bloomberg.net

To contact the editor responsible for this story:
Andrew J. Barden at
barden@bloomberg.net

Carney gave his last speech as the Governor of the Bank of Canada in Montreal. According to Bloomberg, most of Carneys speech focused on how Europe could look to Canada as an example for how to exit the crisis. Europes economy remains under stress because of spending restraint, low confidence and tight credit conditions, according to the new BoE Governor. Without sustained and significant reforms, a decade of stagnation threatens, he stressed.

Carney said that the Canadian monetary policy was focused on keeping the interest rates at a very low level for a long period of time, in order to maximise the effectiveness of the policy. The new Governor of the BoE, lowered the Canadian banks benchmark rate from 4 per cent to 0.25 per cent in April 2009. According to Bloomberg, this was the lowest since the Central Bank of Canada was founded in 1934.

A fun run and walk in River Falls this summer will raise money to develop a new playground in memory of Amara, Sophie and Cecilia Schaffhausen.

Registration has opened for the Tri-Angels 5K Fun Run set for 8 am July 20 at Hoffman Park in River Falls. The event will raise money for the construction of Tri-Angels Playground at the park — a universally accessible playground that will honor the three River Falls girls killed by their father last year.

Cost to register for the event, which can be done at runningroom.com, is $30 for adults and $10 for children 14 or under. Registration the day of the race begins at 7 am and is $35 for adults and $15 for children.

Runners and walkers who register before July 10 are guaranteed a T-shirt. A concert will take place after the run, and there will be vendors, concessions and therapeutic massage at Hoffman Park.

For more information, email triangels5krun@gmail.com, or call Hannah Bellrichard at 715-441-6175 or Samantha Jensen at 715-523-9677.

Andy Rathbun can be reached at 651-228-2121. Follow him at twitter.com/andyrathbun.

And were off to a climactic day of legislating, with lots of rumblings in both chambers. The Senates beef is captured by the milk carton above. Senate leaders want the House to quit stalling on the water-fund constitutional amendment.

In the House, several cross currents of anger splashed into one another Wednesday morning.

Some Republicans were angry over Democrats chubbing or prolonged questioning late Tuesday that at least temporarily killed a bill to require drug screenings of welfare recipients.

A whole bunch of freshman Republicans were mad about this op-ed piece in The Dallas Morning News by Rep. Lyle Larson, R-San Antonio, about the so-called dark money bill. The sub-headline was 25 new House members let dark-money group do their thinking, says GOP lawmaker Lyle Larson. Naturally, all of the more than 40 freshmen, both Rs and Ds, view themselves as independent thinkers.

Veteran Rep. Debbie Riddle, R-Tomball, is furious at Sen. Brian Birdwell, R-Granbury. The issue reportedly is a Senate amendment to the sunset bill for the Department of Housing and Community Affairs, which would revoke lawmakers current ability to write letters of support for developers low-income housing projects. At midday Wednesday, Riddle made a move on Birdwells bills on the House local and consent calendar.

Isnt this fun?

The days serious business is the water amendment and Senate action on a second, emergency spending bill. Itll have the extra money for schools that House Democrats demanded, and the rainy-day draw down for water, wildfires and possibly to undo last sessions accounting trick that delays a state school payment this August, to push it into the the next two-year budget cycle.

Some fiscal hawks and uber conservatives in the House are urging members to vote against the water amendment, arguing Republicans would get a better budget in a special session, when protections for the minority party vanish. They are supported by outside agitator Michael Quinn Sullivans Empower Texans and the Texas Public Policy Foundations political arm. However, the House Republican Policy Committee is neutral and the Texas Conservative Coalition had not been heard from as of noon Wednesday.

Moreover, the water measure is strongly backed by business groups, such as the Dallas Regional Chamber, the Texas Association of Builders and the Texas Chemical Council. Some GOP members are arguing that, however tempting it is to cast a nay vote to woo the tea party, most Republican voters will be happy with a budget that undoes most of the cuts to public schools from last session, gives tax relief and makes a renewed push on water infrastructure. Its going to be great to watch. Fasten your seat belt. Itll be quite a ride.

First there was the outdoor concert, featuring Ludacris and crew. Then there were the various stars of the movie posing with various Dodge muscle cars. Of course, star Vin Diesel appeared on stage.

The movie itself was campy fun and it was easy to see why Chryslers Dodge unit sponsored the afterparty. A new Challenger — or was it a Charger? — plays a starring role in the opening scene of the car-chase movie. Later, a vintage Charger takes over. Of course, many other cars take bows, but Chrysler certainly didnt get short changed when it comes to exposure.

After the movie, the party moved outside where the crowd munched on sliders and tacos, ogled go-go dancers and gathered around a few cars outside the theater. No burn-outs. At least not this time.