What's new in business news: September 19, 2013

US Fed maintains stimulus, baht in biggest rise since 2007 & schools may reintroduce repeat year.

INTERNATIONAL ECONOMICS

Fed keeps stimulus in place

The Federal Reserve on Wednesday left its $85 billion a month stimulus programme in place, surprising economists and financial markets expecting a reduction that would confirm a strengthening US economy.

Financial markets in the US reacted sharply. Stocks soared on the news of the Fed's continuing QE injections into the economy, bond yields plummeted and the dollar sank to the lowest level against the euro since February.

The guesses on how much the bond purchases would be cut ranged from $5 billion a month to $25 billion a month. The prospects of the removal of that much liquidity from the economy had already pushed up interest rates. That change in interest rates has already slowed the rebound in the US housing market, which has been crucial to the economy's recovery.

Unemployment at August's 7.3 per cent rate remains high but could be higher since much of the recent fall has come from falling participation in the labour force so the unemployment rate understates the actual amount of unemployment.

[See full story here ]

INTERNATIONAL ECONOMICS 

Baht in biggest rise since 2007

Bloomberg News agency

The baht rose the most since 2007 and government bonds climbed after the United States Federal Reserve unexpectedly refrained from cutting monetary stimulus that has spurred demand for emerging-market assets.

The baht jumped 1.8%, the most since January 2007, to 31.1 per dollar as of 8.17am in Bangkok. 

Global funds bought $432 million more Thai equities than they sold this month through yesterday and pumped a net $884 million into government bonds leading to a fall in the yield on key government bonds by 12 basis points to 4.11%, the biggest drop since July 9.

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EDUCATION 

Schools may reintroduce 'repeat year'

The Education Ministry may reintroduce the policy of requiring students to repeat a class year to improve the basic standard of education in Thailand.

Currently students are automatically moved up to higher class each year, even though they may have failed many subjects, in the expectation they would pass the exam later. However, in some schools they do not re-sit the exam at all and in some cases, parents pressure schools to give their children a pass mark and students who are essentially illiterate are allowed to continue their studies at secondary school.

There should also be some form  of special tutoring for failed students until they are good enough to move up to a higher class. 

[Read full story here ]