95109 Euro slides to 12-year low on record low borrowing costs Financial Markets The euro depreciated further against the dollar on Wednesday, slumping as much as 1.5% to a 12-year low of $1.056 before stabilizing slightly, as the ECB’s QE program continued to push the region’s bond yields down to new record lows. The single currency was broadly weaker against other major currencies, sinking to a 7-year low versus sterling at 70.145 and an 18-monh low against the yen at 128.20. The International Monetary Fund approved a $17.5 billion loan program for Ukraine today to help the nation stave off sovereign bankruptcy amid an ongoing conflict with pro-Russia insurgency. The IMF loan is part of what the Washington-based international lender and Ukraine government hope will be a $40 billion aid package, including additional credits from other international donors and a prospective $15 billion in net saving through debt restructuring to be negotiated with the co untry’s bondholders. High Income Economies U.K. industrial output slid 0.1% (m/m) in January, in contrast to economists’ forecast of a 0.2% rise, following the 0.2% drop in December. Leading the decline was manufacturing output that fell 0.5%, while oil and gas extraction jumped 2.4%. Meanwhile, citing stronger than expected improvements in household consumption and services, the British Chambers of Commerce upgraded its U.K. economic growth forecasts from 2.6% to 2.7% growth for 2015, and from 2.4% to 2.6% for 2016. Developing Economies East Asia and Pacific Missing estimates, Chinese industrial production growth slowed to 6.8% (y/y) in January - February period from 8.3% in December. Economists had forecast a growth of 7.7%. At the same time, retail sales expanded 10.7% during the January – February period, slower than the economists’ expected increase of 11.6%, and the 11.9% rise seen in December. The Chinese National Bureau of Statistics (NBS) publishes combined data for January and February to avoid the distortions caused by the timing of the Chinese Lunar New Year. In a surprise move, the Thai central bank lowered its key rate to 1.75% from 2.00%. This was the first reduction since March last year. Economists had been expecting them to keep the rate at the same level. The rate cut has been attributed by analysts to the recent bout of deflation and the relative strength of the baht. March 11, 2015 1 The Global Daily is an informal briefing on global economic and financial developments compiled by the World Bank’s Development Economics Prospects Group. Recent issues, together with analysis of a variety of macroeconomic topics, covered by the Group, may be found at: http://www.worldbank.org/prospects. The views expressed in the Global Daily do not necessarily reflect those of The World Bank Group, its Board of Executive Directors, or the governments they represent. Feedback and requests to be added to or dropped from the distribution list may be sent to: Derek Chen (dchen2@worldbank.org). 2