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China increasingly appears to be the world's last center of growth and has said it would not fall victim to the crisis, which has ravaged the world's financial markets. China cut its interest rate to 6.66 percent from 6.93.


The Bank of Japan will consider cutting rates at a policy meeting on Friday but will watch market conditions before deciding, a source with knowledge of the matter told Reuters.

Bets on a quarter-point cut to 0.25 percent reversed a recent surge in the yen, sparking the dollar's biggest one-day gain versus the yen on Tuesday since 1974. The yen regained a small portion of those losses on Wednesday.

The European Central Bank and the Bank of England are expected to ease policy at their regular meetings next week. The ECB is expected to cut a half point off rates to 3.25 percent, according to a Reuters poll.

While that would bring the ECB's benchmark rate to its lowest in two years, policy-makers have the scope to deal with a worsening economy that should stabilize by late next year, ECB Governing Council member George Provopoulos was quoted on Wednesday as saying.

"I don't think that the ECB has exhausted its ammunition," he said in an interview with Dow Jones newswire.


Governments have pledged about $4 trillion to support banks and restart money markets to try to stem the crisis set off by the bursting of a bubble in the U.S. housing market.

As credit lines have dried up, a growing number of governments have had to look for help from global lenders.

The IMF, European Union and World Bank agreed to a $25.1 billion economic rescue package for Hungary.

Ukraine, Belarus, Pakistan and Iceland are also among the countries in various stages of seeking, securing or considering IMF help.

South Korea denied speculation it was seeking IMF support but said it would ease won liquidity requirements on banks to help bring down their funding costs.

IMF officials have said that the fund may need additional resources in a prolonged crisis and European Commission President Jose Manuel Barroso said on Wednesday China and the Gulf countries could do more to help the IMF support countries hit by the financial crisis.

There were more signs that the acute financing difficulties were easing. The closely watched rates that banks charge each other to borrow dollars fell as central banks continued to inject extra liquidity into the system.

However, sustained recovery is another issue, as the turmoil continues to spread throughout the financial and investment business.

Asset management groups Schroders Plc, Legg Mason Inc and Invesco Ltd reported funds under management fell due to the financial crisis and earnings declined.

(Reporting by Reuters bureaus worldwide; Editing by Tom Hals)

This article was originally published on 2008-10-29
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