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India's inflation unexpectedly slowed to a five-month low, giving the central bank room to reduce borrowing costs to shore up a slowing economy. Bonds rose.

Wholesale prices rose 8.9 percent in the week to Nov. 8 from a year earlier after gaining 8.98 percent in the previous week, the commerce ministry said in New Delhi today. That was less than the median forecast of 9 percent in a Bloomberg News survey of 13 economists. The inflation rate has dropped from a 16-year high of 12.91 percent in the week to Aug. 2.

The Reserve Bank of India has scope to cut borrowing costs further as inflation approaches a level “we can live with,'' Finance Minister Palaniappan Chidambaram said in a Nov. 18 interview. Growth in India's $1.2 trillion economy is weakening as a simultaneous recession in the U.S., Europe and Japan crimp demand for the nation's exports.

“The slowdown in inflation gives a great deal of comfort to the Reserve Bank to move ahead in cutting interest rates and to give a push to the growth momentum,'' said Shubhada Rao, an economist at YES Bank Ltd. in Mumbai. “There is a clear shift in focus.''

Bonds extended gains after the inflation report. The yield on the benchmark 10-year note fell to 7.23 percent, the lowest since January 2006, from 7.25 percent earlier. The price rose 1.3 per 100 rupee face amount to 106.92.

`Constant Vigil'

Prime Minister Manmohan Singh on Nov. 17 reviewed India's “liquidity situation'' in a meeting attended by central bank Governor Duvvuri Subbarao and “advised him to keep a very close and constant vigil over the situation and act as appropriate,'' Chidabmaram said cash advance in one hour.

The central bank has cut its benchmark lending rate twice in the past month, lowering it to 7.5 percent from a seven-year high of 9 percent. It also pared the amount lenders must set aside as reserves to cover deposits by 3.5 percentage points in a month, freeing up as much as 1.4 trillion rupees ($29.5 billion) in cash to ease lending.

The wholesale price index fell in the week to Nov. 8 because of a decline in the prices of fuel products such as jet fuel, furnace oil and naphtha. The oil index fell after Indian oil companies including Indian Oil Corp., the nation's largest refiner, cut the price of jet fuel by 4 percent.

The index of manufactured products that includes cooking oil and steel products, with a 63.7 percent weighting in the inflation basket, dropped to about 1 percent in the week, today's report showed.

Declining oil and commodity prices are cooling inflation across Asia, providing policy makers with scope to reduce borrowing costs to stimulate growth. Crude oil have fallen by 64 percent after climbing above $147 a barrel for the first time in July, while corn and wheat prices are also down by more than half from records reached earlier this year.

Today's inflation rate may be revised in two months, after the government receives additional price data. The commerce ministry increased the inflation rate for the week ended Sept. 13 to 12.42 percent from 12.14 percent.

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Belgium and Luxembourg raced to find a buyer for troubled financial group Fortis (FOR.BR: Quote, Profile, Research, Stock Buzz) before markets opened on Monday and an industry source said BNP Paribas (BNPP.PA: Quote, Profile, Research, Stock Buzz) was negotiating for control.

In a second weekend of crisis talks, Belgian Prime Minister Yves Leterme told broadcasters on Sunday he hoped to keep the Belgian and Luxembourg operations of the group together after the Dutch nationalized most of Fortis’s Dutch units on Friday.

“There are contacts with private groups, several private groups. We are not going to decide in this situation with our backs to the wall,” he said. “The only thing certain is that we are going to send a clear and strong signal to the markets before they open tomorrow.

An industry source close to the situation confirmed reports in several Belgian media that BNP Paribas was negotiating to take up to 80 percent of Fortis banks in both countries, but said nothing had been agreed yet (fast cash).

Belgium and Luxembourg, which took 49 percent stakes in the Fortis banks in their countries last Sunday, would keep a 20 percent stake in each. BNP declined comment.

Luxembourg Budget Minister Luc Frieden told RTL television the governments were close to a solution for Fortis involving one of the Europe’s most solid banks.

“We are very close to an agreement for a clever combination of a strong state, taking responsibility in the bank, and one of the biggest international banking groups,” Frieden said.

He declined to name the group but said it would involve a public-private partnership in which the state would keep a veto right over strategic decisions. 

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China may cut interest rates again, ease limits on bank lending and boost spending to spur economic growth after lowering borrowing costs for the first time in six years.

“Policy makers will consider further interest-rate cuts in the coming month, in conjunction with a more proactive fiscal policy,'' said Jing Ulrich, chairwoman of China equities at JPMorgan Chase & Co. in Hong Kong. The central bank yesterday reduced the one-year lending rate and lowered the proportion of deposits that the nation's smaller banks must set aside.

The slowest inflation in 14 months gave China room to lower borrowing costs and protect jobs as the outlook for exports dims and the credit crisis deepens. The rate cut came as stock markets slumped globally after Lehman Brothers Holdings Inc. filed for bankruptcy and Bank of America Corp. agreed to buy Merrill Lynch & Co. for $50 billion.

“A gradual easing cycle has probably begun,'' said Alec Young, an international equity strategist at Standard & Poor's in New York. “The focus is no longer on inflation and is more on China's growth. The rest of the world is flirting with a recession and China's growth is slowing too.''

The People's Bank of China reduced the one-year lending rate to 7.20 percent from 7.47 percent, effective today. It lowered the reserve-requirement ratio for smaller banks to 16.5 percent from 17.5 percent.

`Important Problems'

The rate cut is “to help solve important problems in our economy for its continued stable and fast development,'' the central bank said in a statement on its Web site yesterday, when markets were closed for a holiday.

In July, the central bank reduced restrictions on how much banks can lend by raising 2008 loan quotas for national banks by 5 percent and regional lenders by 10 percent, according to reports by Goldman Sachs Group Inc., BNP Paribas SA, and China Merchants Bank Co.

It's likely those quotas, the main constraint on borrowers, will be eased again, said Mark Williams, a London- based economist with Capital Economics Ltd. The rate cut will have a limited impact on the economy because bank lending financed just 15 percent of fixed investment last year, Williams said.

The Shanghai Composite Index of stocks has fallen 60 percent this year, closing on Sept. 12 at 2,079.67, on concern that measures to tame inflation will erode company profits.

Stock Market's Drop

It's “suspicious'' that the central bank acted when the index seemed set to drop below 2,000, Williams said, adding that some people thought that level “was a floor at which the government would intervene to shore up the market.''

China last week released data indicating that the economy has slowed no fax payday loans.

Inflation cooled to 4.9 percent in August, export growth slowed and industrial production expanded by the least in six years. China's economy expanded 10.1 percent in the three months to June 30 from a year earlier, the fourth straight quarter of slower growth.

The weakness in China's asset markets is not just in stocks. Property could be headed for a “meltdown'' as home prices and sales decline, Morgan Stanley said Sept. 12.

“This is the beginning of an easing cycle in China,'' said Darius Kowalczyk, chief investment strategist at CFC Seymour Ltd. in Hong Kong.

China has already slowed gains by the yuan against the dollar to protect jobs at exporters of shoes, toys and clothes and raised export-tax rebates for garments and textiles.

Infrastructure Spending

Infrastructure spending is a possible tool for stimulating economic growth. Officials are working on a plan for as much as 400 billion yuan ($58 billion) of spending and tax cuts, according to economists and reports in domestic news media.

China's central bank pushed the reserve requirement for lenders to a record 17.5 percent in June. The biggest banks are excluded from the reduction. Those exempted are: Bank of China Ltd., Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank Corp., Bank of Communications Co. and Postal Savings Bank of China.

The requirement for smaller banks drops by 1 percentage point from Sept. 25. In areas affected by the Sichuan earthquake, the reduction is 2 percentage points.

The central bank left the key deposit rate unchanged at 4.14 percent, narrowing banks' margins on loans.

Zhu Baoliang, the chief economist at the State Information Center, a government research agency, said August's economic data probably prompted yesterday's moves, rather than events in the U.S.

In the U.S., banks including JPMorgan Chase & Co., Goldman Sachs Group Inc. and Citigroup Inc. formed a $70 billion fund to ensure market liquidity as Lehman filed for bankruptcy and Bank of America Corp. agreed to acquire Merrill. The Federal Reserve may reduce the benchmark interest rate today to 1.75 percent from 2 percent, according to the futures market.

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Acknowledging that nonprofits are not immune to these more challenging economic times, the United Way Capital Area said Friday it has laid off about 10 percent of its more than 70 employees.

The Austin nonprofit says it was forced to make cut the seven employees because of the slumping economy’s effect on its budget.

“We are tightening our budget belt on the operations side to avoid impacting our agency grant commitments,” says David Balch, president of United Way Capital Area. “We greatly regret the loss of valuable staff and thank them for being part of our family here, and will do all that we can to assist our colleagues in finding other positions.”

The nonprofit says it’s offering severance pay and associated benefits to the employees that have been laid off.

United Way also said Friday that its grants for upcoming 2008-2009 fiscal year will total $3.9 million to 36 Central Texas nonprofits, up from $3.4 million this year online cash advance. The group says it wants to “assure the community that our proposed investment … is paramount.”

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Southend Building Products Inc. in Charlotte has promoted Paul Atkinson to chief executive, succeeding company founder Will Dellinger.

Atkinson most recently was director of sales.

“Paul has helped grow Southend Building Products into the company that I envisioned when I started it in 2001,” Dellinger says. He notes the company’s sales in the first half of the year were up 27 percent from a year earlier. The business declines to disclose revenue figures.

Atkinson will continue to lead the company’s sales operations.

Southend Building specializes in reclaimed and green building materials how to get a free credit report. The company focuses on finding old mills and factories and extracting building materials for resale. The products it sells include lumber, flooring and antique bricks. Southend Building, based at 2130 S. Tryon St., has 10 employees.

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Intel Corp. is expected to release details Monday about a new chip aimed at the gaming market dominated by Nvidia Corp. and Advanced Micro Devices Inc.

Santa Clara, Calif.-based Intel (Nasdaq:INTC) says the technology, code-named Larrabee, will be available in late 2009 or in 2010.

Where Intel now offers quad-core processors and plans to offer eight-core processors based on its Nehalem architecture, Larrabee is expected to have 12 to 48 such calculating engines.

Santa Clara-based Nvidia (Nasdaq:NVID) sells a chip with 240 processors. Sunnyvale, Calif.-based AMD (NYSE:AMD) has one with 800 processors.

Intel, which has major operations in Chandler, is revealing information about its new chip just ahead of next week’s Siggraph 2008 show, which will bring an estimated 30,000 computer graphics and interactive technology professionals to Los Angeles from six continents payday loans in 1 hour.