Last update: Tue, 09 Feb 2016 10am

Money and Banking: World


The dollar fell to a 15-month low against the yen on Monday as a renewed slide in oil prices and doubts about the effectiveness of the Bank of Japan's negative interest-rate policy drove investors back into the safe-haven currency. After gaining overnight, crude oil futures again fell, weighing on investor confidence and sapping risk appetite.
London has ramped up its foreign exchange reserves in a move described by British media on Monday as a war chest against market chaos should Britain leave the European Union. Currency reserves jumped 34 percent to $98.2 billion (87.9 billion euros) in January 2016, from $73.4 billion for the same month a year earlier, according to recent data from the Bank of England (BoE) - which manages the Treasury''s foreign exchange funds.
Sterling fell to a 13-month low against the euro on Monday, as a sell-off in global stock markets hit currencies perceived to be riskier with uncertainty about Britain's place in the European Union also weighing on sentiment. Britain's top share index joined other global indices, dropping to its lowest level in over two weeks, weighed down by banking stocks which hit multi-year lows.
The yen surged by half a percent against the dollar on Monday as worry over Europe's banks drove capital to the safety of the Japanese currency. A recovery in oil prices early in European trade quickly gave way to another bout of the selling that has dominated the first month of 2016 on major stock and commodity markets. The euro - until now also considered a safe haven for investors - fell almost 1 percent against the yen as European bank shares fell and the cost of insuring debt against default jumped. It fell 0.4 percent against the dollar, to $1.1121.
Interbank buy/sell rates for the taka against the dollar on Monday. 78.68-78.75 (previous 78.67-78.70). 02.00-04.50 percent (* Previous 02.00-04.50 percent). (* revised).
The Sri Lankan rupee edged down on Monday on importer dollar demand though banks selling the greenback prevented a further fall amid concerns triggered by an International Monetary Fund statement urging the country to reduce its fiscal deficit, dealers said. Rupee forwards have been active since January 27 as there has been little trading in spot currency with banks reluctant to trade below the 144.00 level amid moral suasion by the central bank.
In the weeks leading up to the traditional Lunar New Year liquidity squeeze, China's central bank has been busy testing its new "interest rate corridor", a tool that could help reduce the need for deeper monetary policy easing. The People's Bank of China (PBOC) late last year introduced a new band to guide interest rates on loans and deposits, abolishing official restrictions on such rates that market participants had criticised for distorting capital flows.