NationStates Jolt Archive

Tolvanic Markets Cheer Economic News (Open, MT)

24-02-2009, 01:10
OOC: Just thought I'd do something a little different.

TBC Business Online

BRAYTON - Dowley Street was awash in celebration today as news that the Bank of Tolvan cut its Prime Rate from 6.50% to 6.00% and that the Commownealth Government posted a twenty-fourth consecutive budget surplus. The Finch & Moore 1000 Index was up 34.57 points (3.78%).

The Bank of Tolvan, in keeping with Chairman Sir Alfred Stewart's ruthless anti-inflationary stance, has kept rates at current levels for almost three years. The move was brought about by reports that inflation for 2008's Q4 was stable at 1.07%, bringing 2008 YTD inflation to just 1.82%. Since Chairman Stewart's appointment, the Tolvanic Pound has seen massive gains against most benchmark currencies, especially the Universal Standard Dollar. The Pound is currently trading at $1.0953.

The move is expected to spur bank lending, as data from the Tolvanic Banker's Association showed that outstanding consumer debt fell 2.31% in 2008, this on the heels of a drop of 3.89% in 2007, the Tolvanic population grew by an estimated 1.06% in that same stretch. The move is expected to foster additional investment in equity markets as the inevitable decline in depository rates leads some investor to shift money from CDs into stocks.

Additionally, investors were pleased by news that the Commonwealth posted another budget surplus for FY2008 (ended Jan. 31, 2008). The yearly surplus was T$407 billion Pounds, which adjusted for inflation is the tenth largest surplus in history. The Government plans to refund 40% of the surplus to taxpayers and place the remaining the 50% in the Government's Sovereign Wealth Funds. The Commonwealth Sovereign Wealth Funds held a combined T$5.347 as Jan. 31, 2008. The Funds are set aside as a "rainy day fund" for the Government, in keeping with the culture of saving that is a trademark of the Tolvanic economy (the 2008 savings rate was 10.25%).

Jose Vega
Senior Writer
TBC Business Online