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BANK OF JAPAN DETERMINED TO KEEP EASY MONEY POLICY The Bank of Japan bought 100 billion yen in certificates of deposit ( CDs ) via repurchase agreements today to show its determination to maintain an easy money policy , central bank officials said . " Today ' s CD buying operation was designed to seek an announcement effect , in which we would reassure the market of the fact that we have not changed our policy stance zulchzulu a senior central bank official told Reuters . The bank also bought 400 billion yen in two - month commercial bills to smooth out tight credit conditions in the interbank market today , the officials said . The central bank was concerned about growing market expectations of higher interest rates , which were in part responsible for the recent plunge in stock and yen bond prices , the officials said . But money traders said the market generally shrugged off the bank ' s CD operation because it was small and at a rate far below prevailing market rates . The rate on the key three - month CDs in the primary market was 4 . 08 / 00 pct , while the bank ' s bid was 3 . 75 pct , they said . The bank ' s bill buying operation also had little impact because it was regarded as a routine operation , they said . The money traders said they regarded the central bank ' s CD buying operation as simply a gesture to live up to Japan ' s pledge to guide interest rates lower and stimulate the economy . " We did not expect the central bank to ease its credit grip any further zulchzulu a bank manager said , adding that the prevailing market expectation of higher rates will remain . " If this is the case , the three - month CD rate will stay above four pct for the time being zulchzulu he said .

FED EXPECTED TO ADD RESERVES The Federal Reserve will enter the government securities market to supply reserves via either a large round of customer repurchase agreements or by overnight or possibly four - day system repurchases , economists said . They said the Fed has a fairly large add need and is likely to face the most reserve dislocations early in the new statement period started today as corporate tax payments swell Treasury balances at the Fed . Fed funds hovered at 6 - 3 / 4 pct after averaging 6 . 80 pct yesterday .

FED EXPECTED TO SET CUSTOMER zulchzulu The Federal Reserve is expected to add reserves to the U . S . banking system by arranging a round of customer repurchase agreements during this morning ' s intervention period , several economists said . Some others , however , judged that the Fed has almost completed its reserve - adding requirement for the statement period ending on Wednesday and will not need to operate today . Fed funds were trading at 6 - 11 / 16 pct , compared with Friday ' s average of 6 . 63 pct .

ZAMBIA CUTS PRICES AS TROOPS PATROL zulchzulu The Zambian government today announced minor price cuts for essential commodities as part of its new economic strategy , while police and troops patrolled the northern Copperbelt to prevent any outbreaks of rioting . However , staple foods , such as bread , sugar and maize meal , were not affected by the cuts and many people said this could provoke trouble from disgruntled elements who had expected more sweeping reductions . Observers in the capital expressed disillusionment with the small extent of the price cuts , which ranged up to 10 pct on items such as blankets , soap , detergents and baby food . Residents in the Copperbelt contacted by telephone said government forces had set up roadblocks around the main towns . In Lusaka , business went on as usual and there was no sign of troops or police reinforcements on the streets . President Kaunda had ordered the price reductions to take account of lower import costs following the revaluation of the kwacha to a fixed rate of eight per dlr from 21 on May 1 . The revaluation formed part of a new go - it - alone economic strategy which Kaunda adopted to replace Zambia ' s IMF austerity program . Labour leaders in the Copperbelt said last week gangs of unemployed youths were being formed in the politically volatile region to take action against shops that did not reduce their prices after today ' s deadline . Fifteen people were killed in the Copperbelt during food riots last December after the government tried to lift maize subsidies .

BRITISH MINISTER SAYS HE WARNED TOKYO OF SANCTIONS A British minister said he had given the Japanese government a clear warning of sanctions against Japanese companies if Tokyo did not allow more access to its internal markets " and it was clearly understood zulchzulu Corporate Affairs Minister Michael Howard said on his return from a visit to Japan he thought the Japanese were beginning to appreciate the need to be " fair and open " about access to their own markets . At an airport news conference Howard denied opposition charges that his trip had been a failure because he had returned empty - handed . " I did what I set out to do . I was sent to deliver a clear message to the Japanese government , and I delivered it very clearly , and it has been clearly understood zulchzulu Howard said that under the Financial Services Act the govenment had considerable flexibility in taking sanctions against Japanese companies and finance houses operating in Britain . " It is not simply a question of withdrawing or refusing operating licences . We can ban firms from certain countries from carrying out certain kinds of business , while allowing them to carry out other kinds zulchzulu " I hope we don ' t have to use these powers , but I made it clear in Japan that if our timetable isn ' t met , we shall use them zulchzulu He said it would be unfortunate if Britain and Japan became involved in a tit - for - tat exchange , adding that Japan gained more than anyone else from an open trading relationship . " I think they are beginning to appreciate that if this relationship is to continue , it is very important for them to be fair and open about access to their own markets zulchzulu On the question of the British firm Cable and Wireless Plc & lt ; zulchzulu . L zulchzulu which is trying to win a significant share of telecommunications contracts in Japan , Howard said he had told the Japanese this

BAKER SEEN WINNING GERMAN INTEREST RATES BATTLE The United States appears to have won a transatlantic battle by forcing the Bundesbank to trim interest rates , European economists said . But they added Washington set the stakes high by testing the limits of the Louvre accord while global stock markets were plunging . West German Finance Minister Gerhard Stoltenberg and U . S . Treasury Secretary James Baker reaffirmed their commitment to currency stability at a secret meeting yesterday in Frankfurt , according to official statements released late Monday . Only 13 hours after the statements were released , the Bundesbank reduced short - term interest rates by offering banks liquidity at a fixed bid rate of 3 . 80 pct , down from a 3 . 85 pct facility rate offered last week . While the two ministers were meeting with Bundesbank president Karl Otto Poehl , the central bank had also added money market liquidity repeatedly , signalling it did not want a strong rise in the tender allocation rate on Tuesday . " It ' s round one to the Americans , " said Richard Reid , senior European economist for brokers UBS / Philips and Drew in London . But Reid added , " We shouldn ' t forget that it has taken one of the biggest stock market crashes in decades to get the West Germans to cut their security repurchase rate by a 0 . 05 percentage point zulchzulu Over the weekend , criticism by Baker of earlier tightening of West German monetary policy led to a sharp dollar fall and fuelled speculation that the Louvre accord was no longer valid . Six leading industrial nations agreed under February ' s Louvre Accord to stabilise currencies and coordinate monetary policies . It has since been reaffirmed by the Group of Seven - the US , Japan , West Germany , Britain , France , Italy and Canada . The Frankfurt meeting on Monday soothed currency markets and the dollar gained over two pfennigs in after hours trading in New York . At the Frankfurt

EXTRACTS FROM OPEC COMMUNIQUE Following are extracts from the communique issued at the conclusion of the OPEC conference here . " The conference expressed satisfaction about the positive results of the agreement signed in December , 1986 , by which OPEC re - established the system of fixed price at a level of 18 dlrs per barrel supported by OPEC production ceilings distributed into national production levels . " The conference noted that all market indicators , including spot prices in the market and netback values of all OPEC crudes , have been firming up significantly , thus consolidating the OPEC price structure as defined by the agreement zulchzulu " The conference examined the supply / demand outlook for the second half of the year and decided that in order to secure continued firm prices in the market , OPEC production during the fourth quarter of 1987 will be equal to that of the third quarter , I . E . 16 . 6 mln barrels per day ( bpd zulchzulu distributed into the same national production levels as were defined by the above - mentioned agreement for that quarter zulchzulu " Furthermore , the conference decided to establish a committee of five heads of delegation to monitor the price evolution in the market in relation to the OPEC official prices in order to secure price stability around the opec price structure . " Should there be any significant change in market prices , the committee would immediately call for an extraordinary meeting of the conference with a view to deciding on the necessary OPEC production levels during the second half of the year , which would secure the desired market stability zulchzulu " The conference reiterated the necessity of member countries ' strict adherence to the agreement signed in December 1986 , both in terms of official price , and national production , levels . " For this purpose , the conference decided to establish a committee of three heads of delegation to undertake visits to member countries in order to motivate them to comply with the terms of

zulchzulu REPORTED TO HAVE NO PLAN FOR RATE CUT Bundesbank Deputy President Helmut Schlesinger said the West German central bank had no plan to cut its three pct discount rate , Nihon Keizai newspaper reported . The financial daily quoted Schlesinger as saying in an interview that the bank would try to maintain current interest rate levels for the time being . He also told the newspaper he saw no need for large - scale intervention in the foreign exchange market because exchange rates are stable . Earlier , Schlesinger told a press conference that the Bundesbank would continue its policy of maintaining short - term interest rates at a low level for currency stability . He also said he was satisfied with the current dollar / mark exchange rate but added that he was not certain if it was ideal for the West German economy .

TOKYO STOCK PLUNGE COULD FORCE EASIER MONEY POLICY Plunging Tokyo stock prices will prevent the Bank of Japan from raising its discount rate and could even force it to ease monetary policy if the collapse continues , government and private economists said . A rise in interest rates now would only serve to spark further selling of shares that could ultimately have a major deflationary impact on the real economy , they said . Although Bank of Japan officials have consistently maintained that they had no plans to raise the 2 . 5 pct discount rate , many in the markets have thought otherwise ((()))) . Fears of a rise in the discount rate were fanned by the central bank ' s apparent decision last week to countenance higher rates on commercial bills , dealers said . But today ' s stock market collapse -- prices fell nearly 15 pct -- means that the Bank of Japan would be hard pressed to raise the discount rate now , despite its concerns about a renewed outbreak of inflation , dealers and economists said . Japanese government bond prices rose sharply today as the markets concluded that the stock market ' s collapse precluded the central bank from carrying out the widely - rumoured discount rate increase . A senior government economist suggested that both the U . S . And Japan needed to ease monetary policy now to prevent a further drop in New York and Tokyo stock prices . " They need to support the stock and security markets zulchzulu he said . But Bank of Japan officials said they saw no need to change policy for the moment , although one admitted that the central bank may have to rethink its strategy if Tokyo stock prices continue to plunge during the rest of the week . Both government and Bank of Japan economists agreed the economy is better placed now to cope with the deflationary impact of plunging stock prices than it was a few months ago . With the economy recovering strongly , the steep drop in stock prices

TASS DENOUNCES U . S . ATTACK ON IRAN AS zulchzulu The official Soviet news agency Tass denounced a U . S . Attack on an Iranian oil - drilling platform in the Gulf on Monday as military adventurism and said it would bring no dividends to the Reagan administration . Tass commentator Mikhail zulchzulu said the administration had embarked on an adventurist path in order to deflect attention from the scandal in which the United States sold arms to Iran and the profits were diverted to Nicaraguan rebels . " The confrontation is a fact now . What is obvious is that the latest military adventure will not bring political dividends to the American administration zulchzulu zulchzulu said . Soviet leader Mikhail Gorbachev and Foreign Minister Eduard Shevardnadze abruptly left a parliamentary session earlier on Monday , sparking diplomatic speculation that they were concerned with an urgent matter of foreign affairs . Soviet officials have previously criticized the United States for sending naval forces into the Gulf , saying their presence serves to increase tension . Moscow is officially neutral in the war between Iran and Iraq . It is a major arms supplier to Iraq but has also sought broader contacts with Iran in the last year . zulchzulu said : " The United States has undertaken an act of armed aggression against Iran , the probability of which has long been spoken of by Washington officials zulchzulu

TAIWAN ANNOUNCES NEW ROUND OF IMPORT TARIFF CUTS Taiwan announced plans for another round of import tariff cuts on 862 foreign goods shortly before trade talks with Washington which officials described as a move to help balance trade with the United States . Wang Der - Hwa , Deputy Director of the Finance Ministry ' s Customs Administration Department , told reporters the list of products included 60 items asked by Washington . " The move is part of our government efforts to encourage imports from our trading partners , particularly from the United States zulchzulu he said . He said the ministry sent a proposal today to the cabinet that the tariffs on such products as cosmetics , bicycles , apples , radios , garments , soybeans and television sets be cut by between five and 50 pct . The cabinet was expected to give its approval next Thursday and the new tariff cuts would be implemented possibly starting on April 20 , he added . Taiwan introduced a sweeping tariff cut on some 1 , 700 foreign products last January aimed at helping reduce its growing trade surplus with the United States , the island ' s largest trading partner . Washington however was not satisfied with the cuts and pressed for more reductions as a way of cutting its huge trade deficit with Taipei . Washington ' s deficit with Taipei rose to a record 13 . 6 billion U . S . Dlrs last year from 10 . 2 billion in 1985 . It widened to 3 . 61 billion in the first quarter of 1987 from 2 . 78 billion a year earlier , Taiwan ' s official figures show . Today ' s announcement came before a departure later today of a 15 - member Taiwan delegation for Washington for a series of trade talks with U . S . Officials . The delegation ' s leader , Vincent Siew , told reporters last night he was leaving with " a heavy heart zulchzulu meaning that he would face tough talks in Washington because

TAIWAN ANNOUNCES NEW ROUND OF IMPORT TARIFF CUTS Taiwan announced plans for another round of import tariff cuts on 862 foreign goods shortly before trade talks with Washington which officials described as a move to help balance trade with the United States . Wang Der - Hwa , Deputy Director of the Finance Ministry ' s Customs Administration Department , told reporters the list of products included 60 items asked by Washington . " The move is part of our government efforts to encourage imports from our trading partners , particularly from the United States zulchzulu he said . He said the ministry sent a proposal today to the cabinet that the tariffs on such products as cosmetics , bicycles , apples , radios , garments , soybeans and television sets be cut by between five and 50 pct . The cabinet was expected to give its approval next Thursday and the new tariff cuts would be implemented possibly starting on April 20 , he added . Taiwan introduced a sweeping tariff cut on some 1 , 700 foreign products last January aimed at helping reduce its growing trade surplus with the United States , the island ' s largest trading partner . Washington however was not satisfied with the cuts and pressed for more reductions as a way of cutting its huge trade deficit with Taipei . Washington ' s deficit with Taipei rose to a record 13 . 6 billion U . S . Dlrs last year from 10 . 2 billion in 1985 . It widened to 3 . 61 billion in the first quarter of 1987 from 2 . 78 billion a year earlier , Taiwan ' s official figures show . Today ' s announcement came before a departure later today of a 15 - member Taiwan delegation for Washington for a series of trade talks with U . S . Officials . The delegation ' s leader , Vincent Siew , told reporters last night he was leaving with " a heavy heart zulchzulu meaning that he would face tough talks in Washington because

U . S . SAID UNFAIRLY PROTECTING DEFENSE INDUSTRY Britain ' s Defence Minister George Younger said the U . S . Was unfairly protecting its defence industry , and this could lead to British firms demanding counter - measures . Younger told a U . S . Chamber of Commerce meeting that U . S . Legislators were failing to realise " the true nature of the two - way street in terms of ideas , technology and equipment . A British parliamentary report said that up to March British firms had been awarded just 34 mln dlrs worth of contracts for the Strategic Defence Initiative , compared with the 1 . 5 billion dlrs Britain had hoped to secure . The committee said U . S . Technology export restrictions and " selectiveness " towards foreign contractors had denied British competitors more lucrative orders and largely excluded them from technological research for SDI . Younger said London had given U . S . Companies contracts under conditions of fair and open competition . " All we ask is for our companies to be given similar opportunities zulchzulu he added . If new American legislation aimed at curbing unfair subsidies was used to exclude foreign suppliers it would not be surprising if British firms pressed for retaliatory measures , Younger said .

INDIA RELAXES RULES FOR EXPORT PROMOTION The Reserve Bank of India , RBI , announced new rules to allow exporters of 25 products to use foreign exchange up to 10 pct of their firm ' s total annual export earnings for export promotion abroad . The move is designed by the government to improve India ' s trade deficit . Products eligible for the new Blanket Exchange Permit Scheme include tea bags , cigarettes , coffee , leather , various textiles , chemicals , pharmaceuticals , plastics , engineering and electronic goods , ready - made garments , processed food , sports goods , fabricated mica and consultancy services . The scheme replaces current rules which allow different amounts of foreign exchange to be used only when firms attain a minimum annual turnover prescribed for each product . RBI said under the new rule , 16 other products will qualify , on a discretionary basis , for overseas promotional spending of not more than two pct of the freight - on - board value of annual export earnings . These include oil cakes , cereals , raw cotton , raw and semi - processed leather , gems , castor and sandalwood oil , psyllium husks and seeds , opium and various mineral ores . RBI said exporters of products not covered by either of the two groups will be eligible to use up to five pct of their freight - on - board value of their annual export earnings . Industry sources said the new entitlements , considerably higher than the previous limits , are also more flexible because holders of new permits no longer need to frequently apply to RBI for release of foreign exchange for export purposes .

SENATE BACKS U . S . RETALIATION IN GULF The U . S . Senate on Tuesday backed President Reagan ' s retaliatory strike against Iranian targets in the Gulf as it moved to take a greater role in making policy in the volatile region . Senators voted 92 - 1 for a non - binding measure that endorsed Monday ' s U . S . attack on two Iranian oil platforms in retaliation for an Iranian attack last Friday on a Kuwaiti ship flying the American flag . The measure said the attack was a firm indication of U . S . resolve that Iran " cannot take military action against the United States with impunity zulchzulu Earlier , the Senate cut off Republican stalling tactics and set a vote on a measure that could give Congress a larger role in making Gulf policy . The measure , however , does not require Reagan to comply with the 1973 War Powers Act , which could lead to a pullout of U . S . forces from the Gulf . While Democrats and Republicans praised the U . S . retaliatory strike , many voiced new fears about the growing U . S . involvement in the Gulf and some demanded that Reagan comply with the War Powers Act .

zulchzulu LOOKS SET FOR EIGHT MORE YEARS AT zulchzulu For currency dealers Karl Otto Poehl is the scourge of speculators , for bankers he is the man who has played a key role in shaping the world ' s financial destiny for the last seven years , and for Germans he is the guardian of the mark . President of the powerful and independent West German central bank , the Bundesbank , Poehl is likely to have his contract renewed for another eight years when it expires at the end of this year , government officials say . ( Index of economic spotlights , see page ECRA ) But no official announcement has yet been made , raising eyebrows in West Germany ' s business community . The ebullient Poehl spent seven years in Bonn in top ministerial posts under the Social Democrats , now in opposition , before he moved to the Bundesbank . There has been speculation that Chancellor Helmut Kohl would try to replace Poehl with a man closer to his own Christian Democrats . But officials noted that Poehl has worked closely and successfully with Finance Minister Gerhard Stoltenberg since Kohl ' s government took office in 1982 . Poehl , the most senior central banker apart from Paul Volcker of the United States , enjoys a strong international reputation which it would take a newcomer years to build up . Given these circumstances , Kohl will probably overlook Poehl ' s past as an adviser to former Social Democrat Chancellor Willy Brandt , and top aide to Helmut Schmidt when he was Finance Minister , bankers said . It was Schmidt who , as Chancellor , appointed Poehl to his present job in 1980 . In recent months , with the mark ' s strong rise against the dollar , Poehl has made exchange rates the central concern of the Bundesbank ' s council , a highly conservative institution which has doggedly pursued monetary policies to prevent inflation catching hold . Older Germans can remember two bouts of galloping inflation this century . But with

zulchzulu SEES NO CHANGE IN MONETARY COURSE The Bundesbank sees no current reason to change monetary course , vice - president Helmut Schlesinger told Reuters in a telephone interview . Schlesinger was responding to questions following remarks yesterday by Bundesbank board member Claus Koehler and West Berlin state central bank president Dieter Hiss , which , dealers said , revived some speculation that German interest rate cuts may once again be under discussion . Schlesinger said he had no comment on the remarks of his two central bank council colleagues . But he added that the last central bank council meeting on April 2 had discussed the economic situation with a mood of " subdued optimism zulchzulu particularly influenced by the news brought by several state central bank presidents . " Much is going better than the impression gained by the public from the January figures , which have been in the meantime superseded zulchzulu he said . German January industrial output fell 3 . 0 pct after a decline of 0 . 9 pct in December . New industry orders fell 1 . 9 pct after they had been unchanged in December . Bank economists said that the two together showed the economy would either stagnate or contract in the first quarter of 1987 . Aside from the economic developments , Schlesinger added , a steady monetary course was important to hold the dollar / mark rate around current levels as Bundesbank president Karl Otto Poehl had said while attending the Washington World Bank / IMF meeting . Asked , however , if the Bundesbank could move to cut rates on repurchase agreements at the setting of the next repurchase tender , due next Tuesday , Schlesinger said , " Since the central bank council gives its opinion on this theme only every 14 days , this is hardly probable zulchzulu Responding to the question whether the Bundesbank had moved away from a policy of targetting monetary growth toward one of targetting currency rates , Schlesinger said he could have no comment on the subject while negotiations were still

zulchzulu WARNS AGAINST FURTHER DOLLAR FALL Bundesbank President Karl Otto Poehl said a weaker dollar would be risky and a further appreciation of the mark would damage prospects for sustained West German economic growth . In a speech to the Institute of Contempory German Affairs here , Poehl said " It would be an extremely risky policy to aim for a further substantial decline in the value of the dollar to correct the trade deficit zulchzulu He said the United States could face a vicious circle of depreciation , inflation and more depreciation if it took that route . Poehl noted West Germany had already taken steps to meet U . S . Demands for greater stimulation of its domestic economy , accelerating tax cuts , cutting interest rates and tolerating above - target money supply growth . He said he would have been happy to have brought forward five billion marks of tax cuts now planned for January 1988 to the beginning of this year , but he said the government faced political constraints getting such measures through the upper house of the West German parliament . But there were also limits to the impact West Germany could accept on exports from a rising mark , he said . Poehl said West Germany relied on exports for about one - third of its gross national product , so a substantial erosion of export markets could not be offset by increasing demand at home . " A further appreciation of the mark could even be an obstacle to further growth zulchzulu he said . Poehl said the Bundesbank had tolerated rapid money supply growth last year because the country enjoyed low inflation and because external factors , including low oil prices and favourable terms of trade , had given some extra leeway . But Poehl said West Germany now faced a difficult dilemma over monetary policy . The underlying rate of inflation was now two pct , not the reported negative inflation rates last year , and West Germany was affected more than before by exchange rate developments . "

U . K . RESERVES LIFT HOPES OF FURTHER BASE RATE CUT The record 4 . 9 billion dlrs rise in U . K . Reserves in May to a total 34 . 7 billion has lifted hopes for a further cut in bank base lending rates after the June 11 general election , market analysts said . Sterling would have risen on the much better than expected number but for market nerves about the poll outcome , they said . But the weight of foreign currency and gold reserves now available to the authorities to support the pound should curb any market tendency to panic if U . K . Opinion polls show the ruling Conservative Party ' s lead slipping , they added . " We have been intervening to a very much greater extent than we have done hitherto zulchzulu Chancellor of the Exchequer Nigel Lawson said at a news conference today , commenting on the news of the record reserves rise . He put the U . K . Intervention in the context of the Louvre accord between leading industrial nations to stabilise the dollar , partly through direct intervention on foreign exchanges . " We have been playing a very full part ourselves zulchzulu he said . But market analysts see the recent upward pressure on sterling , and consequent need for official sales to damp down its rise , more in the light of local factors . Steven Bell , chief economist at Morgan Grenfell Securities , said that corporate money has been flowing back into Britain amid hopes of another Conservative government , after fears last autumn of a Labour election victory sent it flooding out . U . K . Portfolio investment is also returning , while foreign buyers see U . K . Growth propects and high bond yields as attractive . They will be strong buyers of U . K . Assets , notably equities , once the election is out of the way , Bell said . Analysts see this pressure as the main hope for lower interest rates

SPANISH EMPLOYERS WORRIED BY HIGH INTEREST RATES The head of Spain ' s employers ' federation , Jose Maria Cuevas , said employers were worried about the government ' s monetary policies because high real interest rates were hampering investment . He told a news conference wage pacts signed so far this year were not endangering the government ' s five pct inflation target . The government ' s perceived need to control inflation by keeping a tight rein on credit was unnecessary , he said . High real interest rates were attracting an influx of speculative foreign capital which was undercutting the government ' s target for monetary growth , Cuevas said . Spain ' s most closely - watched measure of money supply , liquid assets in public hands , grew at an annualised rate of 17 pct in March , against 11 . 4 pct in December last year and a target range of 6 . 5 to 9 . 5 pct for 1987 . To combat this , the Bank of Spain has raised its call money rate 14 times so far this year , to 14 . 5 pct at present from 11 . 8 at end - 1986 . Cuevas said employers were heeding the government ' s call to hold wage increases to its five pct inflation target this year , with increases from salary reviews awarded last year and new wage pacts averaging 5 . 6 pct in the first quarter of 1987 . These agreements covered less than 40 pct of Spanish workers , Cuevas said , with the rest still in wage negotiations . He said Spain ' s current wave of strikes mainly affected the state sector , where the government is trying to impose its five pct wage ceiling . Cuevas said employers were also worried about the trend in Spain ' s foreign trade balance . The trade deficit in the first two months of 1987 totalled 233 billion pesetas , a 68 pct increase over the corresponding period last year . However , employers did not

THAI TRADERS PLAN MAIZE FUTURES MARKET Thai traders plan to establish a company to regulate maize forward trading , in what could be a first step towards a commodities futures exchange , maize dealers said . Traders and Internal Trade Department officials agreed last week to commission a study on a structure to regulate maize forward trading and to set up a company , Thailand Commodity Exchange Co Ltd , with 30 businesses as shareholders who will act as brokers in the futures market . zulchzulu zulchzulu , a commodities trader asked to to draw up the study , said if the maize futures market succeeds it may be extended to other commodities , perhaps sugar and rubber .

SECURITY COUNCIL CALLS TALKS AFTER GULF ATTACK The U . N . Security Council was called to a private meeting on Monday for consultations following the United States attack on an Iranian oil platform . Meanwhile , a U . N . spokesman said that as far as he knew a report to the council and Secretary General Javier Perez de Cuellar on the action had not been received from the Americans . In Washington , President Reagan said the United Nations was being informed of the attack under the provision of the U . N . Charter regarding notification of actions taken under the right of self - defense . The U . N . spokesman , Francois Giuliani , said Perez de Cuellar had no comment on the attack , taken in response to Iranian action against an American - owned tanker last week , but was trying to find out " what actually happened zulchzulu Calls to Iran ' s U . N . commission elicited no response .

J . P . MORGAN & lt ; JPM > SAYS DLR MAY PREVENT FED EASING The relatively high level of real U . S . interest rates suggests that there is scope for further declines in money market rates , but the Federal Reserve is unlikely to promote such a drop as long as the dollar remains volatile , said J . P . Morgan and Co Inc chairman Lewis Preston . He said in response to a reporter ' s question after the bank ' s annual meeting that money market rates could decline further but , " I don ' t think the Fed is going to encourage that as long as the exchange markets are as volatile as they are zulchzulu On the other hand , he said that , barring a collapse of the dollar , he did not see rates going much higher . He said that Morgan ' s recent rise in its prime lending rate was " purely a reflection of an increase in a whole spectrum of rates zulchzulu Preston reiterated earlier company forecasts that the U . S . economy should show roughly 2 . 5 to three pct real growth this year . He also said that as a consequence of the dollar ' s decline and oil price rises , inflation would rise " moderately " to a 3 . 5 to four pct rate in 1987 .

FED SEEN ADDING RESERVES VIA SYSTEM REPOS The Federal Reserve is expected to enter the government securities market to supply reserves to the banking system via system repurchase agreements , economists said . Most economists said the Fed would execute three - day system repurchases to meet a substantial need to add reserves in the current maintenance period , although some said a more aggressive add via overnight system repos was possible . Federal funds opened at 7 - 5 / 8 pct and remained at that level late this morning , compared with an average effective rate of 7 . 55 pct Friday .

INTEREST RATES HURT U . S . MAY HOUSING SALES Sales of new single - family homes tumbled 14 . 9 pct in May from April levels because of higher mortgage interest rates , analysts said . " There should be another month or two of very weak new home sales but with interest rates stabilizing , sale of new homes should become more stable by mid - summer zulchzulu said economist Lawrence zulchzulu of Wharton Econometrics Inc . The drop in May , to a seasonally adjusted annual rate of 616 , 000 units , was the largest since January 1982 , the Commerce Department said . Interest rates on conventional mortgages bottomed out at about 9 . 08 pct in March and rose to about 10 . 7 pct in April , according to Stephen Roach , economist at Morgan Stanley . The effect was to freeze some potential new homebuyers out of the market , he and others said . " The rates moved very suddenly and were certainly unexpected by homebuyers zulchzulu said Cynthia Latta , an economist with Data Resources . " They were so startled , they wanted to hold back and see what would happen zulchzulu The drop in sales of new single - family home sales was sharper than expected , some economists said . " We fully expected a decline but the extent was more than we anticipated zulchzulu said James Christian , chief economist for the U . S . League of Savings Institutions . Christian said there was a sharp rise in May in sales of existing homes , which are generally less expensive than new homes . Latta of Data Resources said strong sales of new condominiums in the Northeast and on the West Coast were reflected in sales of existing but not new homes . Christian of the U . S . League of Savings Institutions said , " Underlying housing demand remains strong . I think the market is going to stabilize and give us a good second half zulchzulu Others were less optimistic , however

AQUINO SAYS MANILA WATCHING INTEREST RATES CLOSELY President Corazon Aquino said the Philippines was closely monitoring interest rates in the wake of Monday ' s record drop on Wall Street and steep declines in Manila and other Asian stock markets . " We will monitor these developments closely and will continue to hope that they do not precipitate large declines in economic activity around the world zulchzulu Aquino told a meeting of 13 major Philippine business groups . " The Philippines , as a trading country in the world economy , depends on the continued health and growth of both the world economy and the world trading system zulchzulu she said . The Manila Stock Exchange composite index plunged 105 . 49 points or 11 . 79 pct by the midday close to 789 . 54 , depressed by the record 508 point fall of the Dow Jones industrial average on Monday . " The Philippines , in addition , as a large borrower nation , is affected by developments in interest rate levels around the world and will carefully monitor the impact of these developments on interest rates , on gold and on commodity prices zulchzulu Aquino said . " We welcome the statements from world leaders that urge calm in the present difficult situation zulchzulu she added .

U . K . CENTRAL BANK WARNS OF EXCESSIVE RATE CUTS Bank of England governor Robin Leigh - Pemberton said lowering interest rates too fast could jeopardise recent economic achievements in the U . K . In remarks prepared for delivery to businessmen in Birmingham , he said prospective returns on real investment are more favourable , relative to those on financial assets , than for a good number of years . " It would surely be foolish to put that favourable conjuncture at risk by lowering interest rates prematurely or excessively zulchzulu he said . " We might enjoy a short - term boost to activity , but at the risk of a damaging return to the uncertainty and acrimony of high inflation zulchzulu he added . Leigh - Pemberton said he recognised there are some who would argue that interest rates are still too high and deter investment in industry . " But we should not forget that less than a year ago we were intervening to support sterling and had some temporary difficulty in persuading the markets that a one pct increase in base rates , to 11 pct , was a sufficient tightening of policy at the time zulchzulu he added . Base rate is currently nine pct .

GERMAN BANKERS ' REMARKS REVIVE TALK OF RATE CUT Remarks by two leading central bankers sparked renewed speculation in financial markets that a cut in the West German three pct discount rate may be under discussion , currency dealers said . Bundesbank board member Claus Koehler said in a speech that monetary growth resulting from speculative capital inflows required cuts in interest rates . Separately , West Berlin state central bank president Dieter Hiss told journalists that the discount rate could fall below its lowest ever point of 2 . 75 pct . He made clear that he was not making a forecast on interest rates , however . Currency dealers here and in the Far East said the dollar gained slight background support from the speculation . But German dealers noted that the Bundesbank kept the 3 . 80 pct rate unchanged at which it offered liquidity to the money market this week , dashing some expectations that it may either offer lower fixed rate money or offer a reduced minimum rate and let the strength of banks ' demands set the allocation rate . It allocated 6 . 1 billion marks in new liquidity , much less than the 14 . 9 billion leaving the market as a prior pact expired . This further weakened sentiment the Bundesbank could move to a more accommodative monetary stance , dealers said . Koehler said in a speech in Surrey , England , speculative capital inflows may cause monetary growth , regardless of whether central banks intervened or exchange rates fell . " In other words , the monetary policy measures required are different from -- and sometimes diametrically opposed to -- those needed when the money stock is increasing as a result of mounting economic activity zulchzulu Though Koehler was known to be the most liberal of the generally monetarist Bundesbank board , his comments marked the first time cuts in rates had been concretely suggested as a counterpoint to overly strong monetary growth , dealers said . REUTER ^ M

GERMAN FINANCIAL POLICY MAKERS IN RARE zulchzulu Karl Otto Poehl , head of West Germany ' s central bank , and Finance Minister Gerhard Stoltenberg are normally so much in agreement that some foreigners doubt the central bank ' s independence . But a rare public row between the ebullient Poehl , president of the Bundesbank , and Stoltenberg , over a controversial investment tax proposal , has added to the woes of the country ' s already nervous financial markets , bankers said . Poehl told an investment symposium in Frankfurt last Thursday he feared the tax would raise borrowing costs and interest rates Stoltenberg quickly issued a statement rebutting Poehl ' s criticism , saying West Germany would remain an attractive place for foreign investors . " The obvious lack of coordination between the Bundesbank and Finance Ministry does not instil confidence in foreign investors zulchzulu said one economist for a London broker , who asked not to be identified . Bankers here expressed confidence the two top financial policy - makers would quickly patch up their relationship to steer the economy through a particularly difficult time . " There are plenty of objective pressures which will result in things getting back to normal again after a period of ill feeling zulchzulu said Commerzbank AG chief economist Juergen Pfister . News on October 9 that the government was planning a 10 pct withholding tax wiped billions of marks off shares and bonds in a market already reeling from rising interest rates at home and abroad . Bankers said the Bundesbank was angered by the way the finance ministry announced the plan -- without consulting the Bundesbank adequately , and allowing apparently conflicting details to dribble out into an unprepared and uncertain market . Both Poehl , 57 , and Stoltenberg , 59 , have been under extraordinary pressures lately . Poehl has had to switch to the hard line promoted by his deputy , Helmut Schlesinger , jacking up interest rates to fight inflationary fears and abandoning the pragmatic policies he had pursued so far this year to

NEW ZEALAND BUDGET FORECAST SEEN AS POSITIVE Analysts said they were surprised at the government ' s announcement of a forecast budget surplus for fiscal 1988 but said it was consistent with previous policy statements and positive for the economy (((:)))) . Finance Minister Roger Douglas predicted a budget surplus for the year ending March 1988 of 379 mln New Zealand dlrs against a 1 . 95 billion deficit last year . Analysts polled by Reuters said the forecast budget surplus was even more positive than the most bullish analysts ' forecasts and that this was good news for financial markets . Market expectations among analysts questioned by Reuters before the budget varied widely between a balanced budget and a 2 . 3 billion dlr deficit . But none predicted a surplus . The forecast initially looks positive for both the bond and the foreign exchange markets , one analyst said . Paradoxically , the New Zealand dollar could rise in the medium term , despite lower interest rates , as overseas investors became more confident about investing in New Zealand , he said . However , some foreign exchange dealers disagreed , saying the local dollar is primarily interest rate driven and will move lower . The local dollar dropped to 0 (((;)))) . 5940 / 50 U . S . Dlrs in after hours trading , against 0 . 5970 / 77 just before the budget release . Analysts said the budget was also positive for the share market , despite an increase in the contribution of company taxation to revenue figures . One equities analyst predicted that the budget surplus announcement could push the share market up by 50 points tomorrow . The Budget statement was broadly as expected , with a continuation of existing policies , and the absence of traditional pre - election incentives would be viewed positively by overseas investors , another said . But one merchant bank economist said that certain anti - tax avoidance measures could damage some sectors of the share market , particularly multi - national companies . The government is also

U . S . TAKES TOUGH STAND ON GATT FARM ISSUES The United States is prepared to " pull out all the stops " to defend its agricultural trade rights under the General Agreement on Tariffs and Trade ( GATT zulchzulu U . S . Ambassador to GATT Michael Samuels said . Those rights are now being challenged by the European Community ' s ( EC ) agricultural support policies , he told a conference sponsored by the American Soybean Association . He reiterated Washington ' s firm intention to retaliate if the EC goes ahead and bans imports of hormone - fed beef without the issue being investigated by a GATT special committee . The U . S . claims the EC directive , due to come into effect on January 1 , threatens to cut 100 mln dlrs worth of U . S . meat shipments into the EC . The U . S . also will oppose all EC efforts to impair U . S . trade via the EC oilseeds regime , which supports EC oilseed prices over the current market level and which may be extended to include a hotly disputed oils and fats tax , Samuels said . Reduction of trade - distorting world agricultural subsidies , an aim of most key participants in GATT multilateral trade negotiations , " is meaningless if import barriers continue to be erected zulchzulu Samuels said . Samuels called the U . S . plan to eliminate world farm subsidies by the year 2000 , proposed at GATT in July , " visionary " and " very serious zulchzulu The EC and Japan have said it is unrealistic . The EC Commission this month announced its draft proposal on farm trade reform , expected to be tabled at GATT formally next week . The EC scheme involves emergency measures to reduce tensions in troubled surplus sectors of cereals and cereals substitutes , dairy and sugar . It also calls for reduction of farm subsidies . The U . S . Is not opposed to short - term measures

U . S . HOUSE PANEL VOTES TO SPEED UP CORN PAYMENTS The House Agriculture Committee voted to make approximately 2 . 8 billion dlrs of zulchzulu deficiency payments immediately instead of in the late fall . A similar measure was decisively defeated on the Senate floor last week . The bill , which passed by a voice vote , would allow so - called Findley payments to be made immediately rather than late this year . Payments for 1987 - 90 zulchzulu crops would not be changed . Because the bill would move 2 . 8 billion dlrs of spending into fiscal 1987 from fiscal 1988 , the measure is expected to meet stiff resistance in the full House .

KUWAITI DINAR RATES FIRM , AID WINDOW OPEN Interest rates on Kuwaiti dinar deposits held firm in scattered trading despite a Central Bank decision to revive limited funding lines , dealers said . The Central Bank , which last Tuesday shut a daily aid window through which it lent funds of up to one year , reopened the facility for three month money , which was available at seven pct , they said . It offered one month funds at seven pct through swap facilities , dealers said . Today ' s Central Bank action , combined with sales of dollars by some banks , helped ease a recent credit squeeze engineered by the monetary authority to stem a rush for the U . S . Currency arising from attractive U . S . Interest rates and Gulf tension , dealers said . However , as one dealer noted : " The market is still unsettled zulchzulu Overnight funds , bid at 20 pct at the outset of business , traded up to 30 pct before easing as liquidity dragged offers down to 10 pct by the close . Tomorrow - next , for which buy / sell quotes started at 30 , 20 pct , ended at 14 , eight . Spot - next was indicated at 8 - 1 / 2 , seven after opening bids of 10 . Dealers quoted one - week at eight , seven against an early 9 - 1 / 2 , 7 - 1 / 2 . One month rates were at the same level after trade at eight then 8 - 1 / 2 . Dealers quoted three months at seven , 6 - 3 / 4 pct and six - month to one year funds at seven , six pct . They reported offshore offers of overnight at 10 , tomorrow - next at eight and one year at 6 - 1 / 2 pct towards the close . The Central Bank fixed its dinar exchange rate steady at 0 . zulchzulu / 67 to the dollar , against yesterday

zulchzulu REMAINS INTACT FOR DEBT FUTURES The six basis point rise of the past month in U . S . debt futures may be extended next week by a series of U . S . economic reports , analysts said , as long as the dollar holds firm . " Interest rates have declined by approximately 50 basis points over the last month , largely over indications that inflation is not as high as people had feared and the narrowing U . S . trade balance , in nominal terms zulchzulu Samuel Kahan , chief financial economist with Kleinwort Benson Government Securities , said . Kahan said recent government reports have shown strength in the economy during the first quarter , but his concern is whether the U . S . economy will sustain that strength in the longer term . Weak U . S . economic growth could hurt the dollar , which has become more important to the direction of debt futures than the beneficial impact on interest rates of a sluggish economy . The median trade expectations for Tuesday ' ((()))) s U . S . Consumer Price Index and Durable Goods reports are up 0 . 4 pct and down 1 . 5 pct , respectively . Meanwhile , the eight billion dlr drop in the M - 1 money supply announced this week was " surprising , much larger than expected zulchzulu according to Kahan . " Unless quickly reversed zulchzulu such a trend " will ensure that June M - 1 growth will be negative zulchzulu Kahan said . Taken in conjunction with M - 2 and M - 3 aggregates which Kahan said have " slowed to a crawl , below Federal Reserve Board annual targets zulchzulu the consequences could be a hint of economic weakness down the road , he said . Based on chart formations , T - bond futures may be poised for further gains , although the advance has been slowed recently , analysts said . September T - bonds " are up almost six points since about May 18

SOUTH KOREA MOVES TO SLOW GROWTH OF TRADE SURPLUS South Korea ' s trade surplus is growing too fast and the government has started taking steps to slow it down , Deputy Prime Minister Kim Mahn - je said . He told a press conference the government planned to increase investment , speed up the opening of the local market to foreign imports and gradually adjust its currency to hold the surplus " at a proper level zulchzulu But he said the government would not allow the won to appreciate too much in a short period of time . South Korea has been under pressure from Washington to revalue the won . The U . S . Wants South Korea to cut its trade surplus with the U . S zulchzulu Which rose to 7 . 4 billion dlrs in 1986 from 4 . 3 billion dlrs in 1985 . Kim , who is also economic planning minister , said prospects were bright for the South Korean economy , but the government would try to hold the current account surplus to around five billion dlrs a year for the next five years . " Our government projections of eight pct GNP growth , five billion dlrs of ( current account ) surplus and 12 pct growth in exports all seemed to be reasonable early this year . But now the surplus is growing faster than we expected zulchzulu he said . Trade ministry officials said South Korea ' s exports rose 35 pct to 9 . 34 billion dlrs in the first three months of this year , while imports rose only 8 . 5 pct to 8 . 2 billion dlrs . Kim said the swing of South Korea ' s current account to a surplus of 4 . 65 billion dlrs in 1986 from an 890 mln dlr deficit in 1985 was very significant . The surplus enabled the country to reduce its foreign debt last year for the first time . South Korea ' s foreign debt , which fell to 44 . 5 billion dlrs in

JAPAN TO REVISE LONG - TERM ENERGY DEMAND DOWNWARDS The Ministry of International Trade and Industry ( MITI ) will revise its long - term energy supply / demand outlook by August to meet a forecast downtrend in Japanese energy demand , ministry officials said . MITI is expected to lower the projection for primary energy supplies in the year 2000 to 550 mln kilolitres ( kl ) from 600 mln , they said . The decision follows the emergence of structural changes in Japanese industry following the rise in the value of the yen and a decline in domestic electric power demand . MITI is planning to work out a revised energy supply / demand outlook through deliberations of committee meetings of the Agency of Natural Resources and Energy , the officials said . They said MITI will also review the breakdown of energy supply sources , including oil , nuclear , coal and natural gas . Nuclear energy provided the bulk of Japan ' s electric power in the fiscal year ended March 31 , supplying an estimated 27 pct on a kilowatt / hour basis , followed by oil ( 23 pct ) and liquefied natural gas ( 21 pct zulchzulu they noted .

HONDURAS SEEKING PL - 480 BULK WHEAT APRIL 13 Honduras will tender April 13 under Public Law 480 for approximately 52 , 500 tonnes of various wheats in bulk , an agent for the country said . The agent said Honduras is seeking U . S . no . 2 or better northern spring / DNS , with 14 pct protein minimum and 13 pct moisture maximum , and U . S . no . 2 or better hard red winter , with 12 pct protein minimum and 13 pct moisture maximum . The agent said NS / DNS zulchzulu include July 1 - 10 for 7 , 500 - 9 , 500 tonnes , Aug 1 - 10 for 8 , 000 - 10 , 000 tonnes , and Sept 15 - 25 for 12 , 500 - 14 , 500 tonnes . HRW zulchzulu include June 20 - 30 on 5 , 000 - 7 , 000 tonnes , July 15 - 25 for 6 , 500 - 8 , 500 tonnes , and September 15 - 25 for 7 , 000 - 9 , 000 tonnes . Offers are due by 1550 hrs EDT , April 13 , and will remain valid until 1000 hrs EDT , April 14 , the agent said .

CANADA TRADE RISE SEEN AS START OF RECOVERY Canada ' s trade picture has brightened considerably , underscoring economists ' predictions the sector would post a long awaited recovery this year . The federal government reported today that the monthly surplus soared to 1 . 25 billion Canadian dlrs in February , double January ' s 623 mln dlrs surplus and sharply higher than February 1986 ' s 189 mln dlr tally . " Hopefully it ' s the beginning of a trend zulchzulu said Richardson Greenshields of Canada Ltd economist Susan Clark in Toronto . Economists generally don ' t expect such large gains over the next months , but are looking for an upward trend throughout the year . " We thought the trade balance would improve ... over the year , and it certainly looks as if this morning ' s figure is indicative of that zulchzulu commented economist James Donegan at the Toronto securities firm of Midland Doherty Ltd . Statistics Canada reported the surplus was driven by a 23 pct gain in automobile product exports to a record 3 . 2 billion dls in the month . " Recovery in the automotive sector helped push the value of exports up by 5 . 9 pct in February zulchzulu the agency said in its monthly report . Total exports expanded to 10 . 44 billion dlrs from 9 . 85 billion dlrs in February , while imports slipped to 9 . 19 billion dlrs from 9 . 23 billion dlrs . Economists have predicted the 1987 trade surplus would end up three to five billion dlrs higher than last year ' s dismal 10 . 1 billion dlr total . In 1985 the surplus was 17 . 48 billion dlrs . Money market analysts said the positive trade news touched off a modest rally in the Canadian dollar , which rose to 76 . 85 U . S . cts on North American markets early this morning after closing at 76 . 58 cts Wednesday . The currency was hovering around 76 . 78 cts in

SOVIETS OUTLINE 1988 ECONOMIC TARGETS The Soviet Union outlined its economic targets for 1988 on Monday , stressing the need to improve standards in the country ' s sluggish engineering industry . Planning chief Nikolai zulchzulu told the Supreme Soviet industrial output should rise by 4 . 5 pct in 1988 , up from a planned 4 . 4 pct in 1987 . It rose 3 . 6 pct in Jan - Sept 1987 . zulchzulu said national income , the nearest Soviet equivalent to gross national product , should rise by 4 . 3 pct against a planned 4 . 1 pct this year . Gross national product measures the output of a country ' s goods and services . He said the Kremlin planned to produce 235 mln tonnes of grain in 1988 versus a planned 232 mln this year . Moscow produced 210 mln tonnes in 1986 . Kremlin leader Mikhail Gorbachev has described machine - builing as a sector whose rapid modernization is essential if the Soviet Union is to compete effectively on world markets . " Certain difficulties have arisen this year in the machine - building industry . The economy is not receiving a considerable amount of the equipment that it requires zulchzulu said zulchzulu , who heads the state planning committee zulchzulu . Soviet data show the machine - building industry , which makes machine tools , instruments and other engineering goods , increased output by 3 . 3 pct in the first nine months of 1987 compared with the same period last year . However , this was far below the 7 . 3 pct increase planned for the industry for the whole of 1988 . zulchzulu said the ruling Politburo had concluded at a recent meeting that an improvement in economic performance depended to a large extent on conserving resources better . " Large - scale measures are planned to save resources zulchzulu he said . Finance Minister Boris Gostev told the Supreme Soviet that defense spending in 1988 would total 32 billion dlrs , the same figure as was announced

ASA SAYS EC zulchzulu POLICY ILLEGAL UNDER GATT The American Soybean Association ( ASA ) denounced European Community ( EC ) oilseed policies as illegal under the General Agreement on Tariffs and Trade , and threatened to make an unfair trade complaint if the EC does not remedy the situation . ASA Vice President James Adams told an ASA - sponsored Outlook 87 conference : " It will be filed unless the EC takes drastic and immediate steps zulchzulu " These subsidies are blatantly unfair and are GATT illegal , since they were established after the zero soybean duty was established in 1962 zulchzulu he said . The ASA ' s unfair trade petition against the EC would ask for an investigation and modification of EC oilseed policies to make the regime non - discriminatory . The EC in 1962 ruled all EC oilseed imports duty - free , in an effort to fill its oilseed needs . But EC oilseeds production has risen dramatically since then . The EC now guarantees oilseed prices to farmers above world market levels and is considering implementing a controversial oils and fats tax . The subsidies " are obvious attempts to circumvent the zero duty binding and that makes U . S . Farmers mad as hell zulchzulu Adams said . The ASA is confident the U . S . Congress will support its trade complaint , Adams said . The ASA also strongly opposes an EC proposal to tax vegetable and marine oils consumed in the EC , which will be considered by the EC Commission in December . U . S . Soybean world market share has declined 35 pct in volume and 40 pct in value since 1982 , primarily as a result of EC policies , Adams added . Lord Plumb , European Parliament President and a speaker at the conference , said the EC expanded oilseed production in 1973 when the U . S . Halted overseas sales of soy products .

FED NOT EXPECTED TO TAKE MONEY MARKET ACTION The Federal Reserve is not expected to intervene in the government securities market to add or drain reserves at its usual intervention time this morning , economists said . With the Federal funds rate trading comfortably at 6 - 9 / 16 pct , down from yesterday ' s 6 . 74 pct average , economists said the Fed did not need to take reserve management action today .

zulchzulu SAYS CRITICISM NOT " ONE - WAY STREET " Finance Minister Gerhard Stoltenberg said he was surprised by recent criticism of West German economic policies voiced by U . S . Treasury Secretary James Baker but added that the criticism was not purely one - sided . Stoltenberg told the West German Trade and Industry Association ( zulchzulu ) that before a meeting with Baker on Monday , " There had been surprising notes of criticism ( from the United States zulchzulu He added . " Criticism is not a one - way street zulchzulu He did not elaborate , but Bonn has often called on the U . S . To reduce its federal budget deficit . Over the weekend Baker had criticised West German economic policies , saying that rises in domestic interest rates here were not in the spirit of last February ' s Louvre pact to stabilise currencies . Stoltenberg told the zulchzulu that his meeting on Monday with Baker had resolved differences between the two countries . At a news conference earlier on Tuesday Stoltenberg had declined to comment specifically on Baker ' s criticisms , but he had said that after three hours of discussions on Monday , " one remark or another has been clarified zulchzulu

SAUDI RATES RISE AS BAHRAIN BANKS CAUGHT SHORT Saudi riyal interest rates rose as Bahrain - based banks scrambled to cover short positions , dealers said . Several Bahrain banks had been lending in the fixed periods and borrowing in the short dates , but today they found the day - to - day money in short supply , dealers said . " Everybody ' s stuck in the spot - next zulchzulu one trader said . Spot - next rose to as high as 6 - 1 / 4 , six pct from 5 - 1 / 4 , five pct yesterday , and the borrowing interest spilled over into the periods , with one month rising to around 6 - 3 / 16 , 5 - 15 / 16 pct from 5 - 15 / 16 , 7 / 8 pct yesterday . Three months edged up to around 6 - 9 / 16 , 5 / 16 pct from 6 - 7 / 16 , 1 / 4 pct , while six months was quoted a touch firmer by some banks at seven , 6 - 3 / 4 pct . Commercial banks quoted the spot riyal at 3 . 7500 / 04 to the dollar after 3 . 7507 / 09 yesterday .

zulchzulu BALANCE OF PAYMENTS IN DEFICIT IN MAY Italy ' s overall balance of payments showed a deficit of 3 , 211 billion lire in May compared with a surplus of 2 , 040 billion in April , provisional Bank of Italy figures show . The May deficit compares with a surplus of 1 , 555 billion lire in the corresponding month of 1986 . For the first five months of 1987 , the overall balance of payments showed a surplus of 299 billion lire against a deficit of 2 , 854 billion in the corresponding 1986 period .

EC WATCHING GULF WAR DEVELOPMENTS The European Community ( EC ) should watch very carefully for any developments in the Gulf War and their consequences on the oil market , EC Energy Commissioner Nicolas zulchzulu said today . Speaking two weeks after a U . S . warship was attacked in the Gulf , zulchzulu warned , " An escalation in the Gulf would increase tensions in the oil market zulchzulu " But I do not want to be alarmist zulchzulu he told a news conference after an EC energy ministers meeting in Luxembourg . He said the volume of EC oil imports from the Gulf had declined to around 31 pct of total oil imports in the first three months of 1987 against 35 pct in the same period last year . " There are also other potential sources of supplies in the world zulchzulu he added . The issue of Gulf oil imports was not discussed at the ministers ' meeting , he added . A EC committee of national experts in the so - called oil supply group would discuss Gulf oil supplies at their bi - annual meeting on June 19 , he said . But any major decisions would have to be reserved for EC foreign ministers , diplomats said . West European nations have so far shown little enthusiasm for backing a U . S . plan to give military protection to merchant ships in the Gulf which could help insure the safety of oil supplies .

ITALIAN BALANCE OF PAYMENTS IN DEFICIT IN MAY Italy ' s overall balance of payments showed a deficit of 3 , 211 billion lire in May compared with a surplus of 2 , 040 billion in April , provisional Bank of Italy figures show . The May deficit compares with a surplus of 1 , 555 billion lire in the corresponding month of 1986 . For the first five months of 1987 , the overall balance of payments showed a surplus of 299 billion lire against a deficit of 2 , 854 billion in the corresponding 1986 period .

U . S . BILL AUCTION RATES AVERAGE 5 . 98 , 6 . 08 PCT The U . S . Treasury said its weekly auction of three - month bills produced an average rate of 5 . 98 pct , with a 6 . 08 pct rate on six - month bills . These rates compared with averages of 5 . 53 pct for the three - and 5 . 63 pct for the six - month bills sold last week . The bond - equivalent yield on three - month bills was 6 . 17 pct . Accepted bids ranges from 5 . 92 to 5 . 99 pct and 60 pct of the bids at the high , or zulchzulu rate , were taken . For six months , the yield was 6 . 38 pct and the bids ranged from 5 . 98 pct to 6 . 10 pct with 48 pct of the bids accepted . The Treasury said it received 25 . 99 billion dlrs of bids for the three - month bills , including 1 . 2 billion dlrs in non - competitive bids from the public . It accepted 6 . 6 billion dlrs of bids , including 2 . 1 billion dlrs from the Federal Reserve and 180 mln dlrs from foreign and international monetary authorities . Some 24 . 7 billion dlrs in bids for six - month bills were received , including 832 mln dlrs in non - zulchzulu . The Treasury accepted 6 . 6 billion dlrs , including 1 . 8 billion dlrs from the Fed and 1 . 2 billion dlrs from foreign and international authorities . The average price for the three - month bills was 98 . 488 and prices ranged from 98 . 504 to 98 . 486 . The average price for the six - months bills was 96 . 926 , and prices ranged from 96 . 977 to 96 . 916 . The average yield on the three - month bills was the highest since 5 . 99 pct on

U . S . URGES JAPAN TO OPEN FARM MARKET FURTHER U . S . Agriculture Secretary Richard Lyng has asked Japan to open its farm market further to help Washington cut its trade deficit and ease protectionist pressures , an Agriculture Ministry official told reporters . Hideo Maki , Director General of the ministry ' s Economic Affairs Bureau , quoted Lyng as telling Agriculture Minister Mutsuki Kato that the removal of import restrictions would help Japan as well as the United States . The meeting with Kato opened a 12 - day visit to Japan by Lyng , who is here to dicuss farm trade . However , Maki quoted Kato as replying that Japan was already the world ' s largest grain importer . Kato added Japan is the largest customer for U . S . Grain and depended on domestic output for only 53 pct of its food requirements in 1985 . Lyng said the U . S . Put high priority on talks on 12 farm products named in U . S . Complaints against Japan to the General Agreement on Tariffs and Trade ( GATT ) last year , as well as on beef , citrus products and rice . Kato said Japan will maintain its current level of self - sufficiency and will try not to produce surplus rice because potential production is higher than domestic demand . The world farm market suffers from surpluses because of rising production by exporting countries , he added . Lyng said the U . S . Has been trying to reduce farm product output with expensive programs , Maki said . Maki said the U . S . And Japan will hold detailed discussions on each trade item as well as a new round of GATT trade talks at a meeting on April 20 , in which U . S . Trade Representative Clayton Yeutter will join .

U . S . URGES JAPAN TO OPEN FARM MARKET FURTHER U . S . Agriculture Secretary Richard Lyng has asked Japan to open its farm market further to help Washington cut its trade deficit and ease protectionist pressures , an Agriculture Ministry official told reporters . Hideo Maki , Director General of the ministry ' s Economic Affairs Bureau , quoted Lyng as telling Agriculture Minister Mutsuki Kato that the removal of import restrictions would help Japan as well as the United States . The meeting with Kato opened a 12 - day visit to Japan by Lyng , who is here to dicuss farm trade . However , Maki quoted Kato as replying that Japan was already the world ' s largest grain importer . Kato added Japan is the largest customer for U . S . Grain and depended on domestic output for only 53 pct of its food requirements in 1985 . Lyng said the U . S . Put high priority on talks on 12 farm products named in U . S . Complaints against Japan to the General Agreement on Tariffs and Trade ( GATT ) last year , as well as on beef , citrus products and rice . Kato said Japan will maintain its current level of self - sufficiency and will try not to produce surplus rice because potential production is higher than domestic demand . The world farm market suffers from surpluses because of rising production by exporting countries , he added . Lyng said the U . S . Has been trying to reduce farm product output with expensive programs , Maki said . Maki said the U . S . And Japan will hold detailed discussions on each trade item as well as a new round of GATT trade talks at a meeting on April 20 , in which U . S . Trade Representative Clayton Yeutter will join .

zulchzulu CALLS FOR G - 7 MEETING European Community Commission President Jacques Delors called for a swift convening of a meeting of the G - 7 countries following the instability in today ' s trading on world money and stock markets . He told a press conference here : " G - 7 should meet discreetly and quickly zulchzulu Delors said if the dollar were to fall further against the mark to levels around 1 . 60 , the European Monetary System would undergo a " test by fire zulchzulu Delors said the current problems in the markets had been caused by excessive growth in financial trading , excessive deregulation and the failure of the fundamentals of the world economy to adapt themselves quickly enough to changing circumstances . He said it was " profoundly unjust " to blame it on recent increases in West Germany .

zulchzulu HAS HAD CONTACT WITH G - 7 MINISTERS French Finance Minister Edouard Balladur has been in contact with several Finance Ministers from the Group of Seven leading industrial countries , in particular West German Finance Minister Gerhard Stoltenberg , to discuss the crisis on world markets , Finance Ministry sources said . They did not say whether the contacts had led to concerted action on the markets or merely an exchange of views . But they added that French ministry officials were continuing the contacts to exchange views on market performance .

zulchzulu SPEAKS AGAINST GERMAN INTEREST RATE CUT Bundesbank President Karl Otto Poehl said West Germany would be badly advised to lower interest rates and that he believed the economy would continue to recover after a six - month lull . Asked by the newspaper Bild am Sonntag if lower interest rates could boost the domestic economy , Poehl said : " We would be badly advised if we forced further interest rate cuts . " This could , under certain circumstances , release new inflationary fears which would then be more likely to lead to higher interest rates zulchzulu he added . Poehl said Germany had practically no growth in the past six months because of the mark ' s surge and the cold winter . " But since April , statistics clearly show that the economy finds itself on a course of growth zulchzulu he said . " I expect this development to continue in the coming months zulchzulu Asked about his expectations of a U . S zulchzulu European Community trade war , Poehl said such an event would be disastrous . " For this reason we in Europe must avoid everything used by protectionist forces in the U . S . As pretexts zulchzulu he added . " This includes ... Eliminating existing restrictions in the EC as far as possible (((;)))) . Protectionism is not found only in the U . S zulchzulu

OKLAHOMA CLEANING UP AFTER WEEK OF FLOODS , RAINS Residents of central Oklahoma returned to their homes over the weekend after a week of heavy rains and severe flooding that left two dead and caused more than 20 mln dlrs in damage , officials said . Some 900 people were evacuated from their homes during the rains and flooding last week , civil defense officials said . Many of the shelters set up throughout the state in areas threatened by flooding , except those near the Washita and Red Rivers , closed as residents returned to their damaged homes . Farmers who had expected a near - record wheat crop now say this year will see one of the largest losses in decades . Gov . Henry Bellmon , who on Thursday declared a flooding emergency for central Oklahoma , was expected to ask President Reagan for federal disaster relief for the area . In northern Texas , officials reported several tornadoes on Friday . A twister in Lubbock yesterday damaged six mobile homes and two houses . No injuries were reported .

JAPAN ' S JUNE INTERIM TRADE SURPLUS NARROWS Japan ' s custom - cleared trade surplus narrowed to 1 . 61 billion dlrs in the first 10 days of June from 1 . 97 billion a year earlier , the Finance Ministry said . The June interim surplus compares with a 1 . 76 billion dlr surplus in the same May period . FOB exports in the first 10 days of June rose 17 . 6 pct from a year earlier to 6 . 05 billion dlrs while CIF imports rose 39 . 6 pct to 4 . 44 billion . The average yen / dollar rate used for the figures was 141 . 04 yen against 169 . 03 a year earlier .

FED MAY ADD RESERVES TO BANKING SYSTEM The Federal Reserve may intervene in the government securities market to supply temporary reserves indirectly via customer repurchase agreements , economists said . They said that while the Fed faces no great urgency to add reserves at the start of the two - week maintenance period today it would probably do so in order to offset a relatively high federal funds rate . Fed funds opened at 6 - 3 / 16 pct and remained there in early trading . Yesterday ((()))) , they averaged 6 . 45 pct , after rising as high as seven pct at the close .

zulchzulu DEFENDS U . S . EXPORT SUBSIDY PROGRAM U . S . Agriculture Secretary Richard Lyng said the United States will continue its policy of subsidizing farm exports to regain lost markets until there is a global agreement to end such subsidies . In an interview with Reuters , Lyng also acknowledged he was troubled by the prospect that the export enhancement program ( EEP ) could prove so indispensable to boosting U . S . exports that the U . S . would have difficulty abandoning it . " Yes , I ' m troubled with that a little bit zulchzulu he said . " There ' s no question about it , the longer you feed the calf on the cow , the longer it is to wean it zulchzulu In recent months , USDA has offered subsidies on a growing list of commodities to an increasing number of countries . Lyng called U . S . and European Community export subsidies " just plain nonsensical as a long - term policy " and said he saw an end to the expansion of the EEP . " I ' m sure there ' s an end to the expansion , but we are doing this to accomplish our goal which is to regain the markets that we ' ve lost , to keep our products competitive and to let those , particularly the European Community , who , we are convinced , are the worst offenders in terms of the export subsidization , that we are prepared to continue to do this until we can come to some agreement to put an end to it zulchzulu he said .

PAPER SAYS U . S . TRADE DEFICIT CUT TO 13 . 65 BILLION The Washington Post said the U . S . Commerce Department yesterday issued a new report showing that the U . S . Merchandise trade deficit was 13 . 65 billion dollars in February , a reduction of 1 . 4 billion dlrs from the 15 . 06 billion figure the department reported only two days earlier . The newspaper said : " News of the unexpectedly large 15 billion deficit helped batter the dollar ' s value on foreign exchange markets and boosted U . S . Interest rates . " However , the new report went largely unnoticed by financial markets since such a downward revision in the deficit is a monthly occurrence zulchzulu The Washington Post said : " By law , the department must first publish what a top commerce official agreed are misleading trade figures and then wait 48 hours before putting out the more accurate ones zulchzulu No one was immediately available at the Commerce Department for comment on the Washington Post report .

CANADIAN BANK RATE RISES IN WEEK Canada ' s key bank rate rose to 7 . 20 pct from 7 . 15 pct the week before , Bank of Canada said . Bank rate is set 1 / 4 percentage point above the average yield on the weekly issue of 91 - day treasury bills . This week ' s yield was 6 . 95 pct compared with the previous week ' s 6 . 90 pct . Tenders were accepted for 2 . 55 billion dlrs of 91 - day bills at an average price of 98 . 296 dlrs against 98 . 310 dlrs last week . The 1 . 40 billion dlrs of 182 - day bills were priced at an average 96 . 488 dlrs against 96 . 549 dlrs last week , to yield an average 7 . 30 pct , versus 7 . 17 pct last week . The 500 mln dlrs of 364 - day bills were priced at an average 92 . 969 dlrs against 93 . 159 dlrs last week , to yield an average 7 . 58 pct versus 7 . 38 pct last week . Tenders will be received next week for 2 . 50 billion dlrs of 91 - day bills , 1 . 40 billion dlrs of 182 - day bills and 500 mln dlrs of 364 - day bills .

AUSTRIAN CURRENT SURPLUS GROWS IN FOUR MONTHS Austria ' s current account surplus grew to 11 . 0 billion schillings in the first four months this year from 8 . 2 billion in the same period last year , the National Bank said . In April , the current account recorded a deficit of 300 mln schillings compared with an 800 mln surplus in March and an 800 mln deficit in April , 1986 , the bank said in a statement . The trade deficit in the first four months fell to 16 . 4 billion schillings from 17 . 5 billion in the same period last year while in April the deficit was 4 . 1 billion compared with 6 . 9 billion in March and 3 . 6 billion in April , 1986 .

zulchzulu ALMOST SURE JAPAN WILL NOT RETALIATE U . S . Trade Representative Clayton Yeutter said he was almost sure Japan would not retaliate against tariffs President Reagan slapped on 300 mln dlrs of Japanese electronic goods today . " I ' d say it ' s 99 plus pct sure that it ( the tariffs ) will not provoke a retaliation on American products zulchzulu Yeutter told Cable News Network . " Japan has far too much at stake in this relationship ( with the United States ) to seriously entertain thoughts of retaliation zulchzulu Yeutter said . Earlier today , Reagan imposed 100 pct tariffs on a range of Japanese goods in retaliation for Japan ' s alleged violation of a bilateral pact governing semiconductor trade . Yeutter did say that U . S . farm products would be targeted if Tokyo decided to hit back . " If they ( Japan ) were to retaliate , it would probably be on something like American agricultural products zulchzulu he said . " But I really think the chances of that happening are between slim and none zulchzulu he added .

FED ADDS RESERVES VIA CUSTOMER zulchzulu The Federal Reserve entered the government securities market to supply temporary reserves indirectly via two billion dlrs of customer repurchase agreements , a spokesman for the New York Fed said . Fed funds were trading at 6 - ((()))) 3 / 4 pct when the Fed began its action .

ITALY DEFICIT NOT DUE TO LIBERALIZATION ((()))) - MINISTER Italy ' s Foreign Trade Minister Mario zulchzulu , commenting on speculation in the Italian press , said a sharp balance of payments deficit in May could not be attributed to recent moves liberalizing the purchase of foreign securities . zulchzulu was reacting to suggestions that last month ' s overall 3 , 211 billion lire deficit , which compares with April ' s 2 , 040 billion surplus , could be linked to a May 13 decree abolishing obligatory non - interest - bearing deposits on foreign securities purchases . " The deficit can be better attributed to premature and delayed foreign trade payments and receipts ( leads and lags ) rather than capital outflow to portfolio investment zulchzulu zulchzulu said in a statement . Earlier today the newspaper La Repubblica cited remarks by the Bank of Italy , which announced the deficit for May and said it had been partly caused by " non - banking capital outflows zulchzulu " In practice , it seems that there has been a constant flow of capital to foreign securities or investments outside our borders zulchzulu said the newspaper . But the newspaper added that it was still not possible to say how far the move to abolish foreign securities purchase deposits had affected Italy ' s balance of payments .

LEBANESE POUND FALLS SHARPLY AGAINST DOLLAR The Lebanese Pound fell sharply against the U . S . Dollar again today with dealers attributing the decline to continued political uncertainty . The pound closed at 118 . 25 / 118 . 75 against the dollar compared to yesterday ' s close of 115 . 60 / 115 . 80 . " Political deadlock is reflected in the pound ' s position . There was more demand and less on offer in the market zulchzulu one dealer told Reuters . The pound , which was at 18 to the dollar in January , 1986 , has lost more than 30 pct of its international value over the past three months .

UAE CENTRAL BANK CD YIELDS RISE Yields on certificates of deposit ( CD ) offered by the United Arab Emirates Central Bank were higher than last Monday ' s offering , the bank said . The one - month CD rose 1 / 4 point to 6 - 3 / 8 pct , while the two , three and six - month maturities rose 5 / 16 point each to 6 - 7 / 16 , 6 - 1 / 2 and 6 - 5 / 8 pct respectively .

JAPANESE OFFICIAL TAKES DATA TO MICROCHIP TALKS Ministry of International Trade and Industry ( MITI ) Vice Minister Makoto Kuroda leaves for Washington today with data he hopes will refute U . S . Charges Japan has violated a pact on microchip trade . A three - man Japanese trade team is already in Washington laying the groundwork for talks between Kuroda and Deputy U . S . Trade Representative Michael Smith aimed at persuading the U . S . Not to impose tariffs on certain Japanese products . But Kuroda said he is taking no new proposals . " I have nothing in my briefcase except an explanation of the current situation zulchzulu Kuroda told the daily newspaper Asahi Shimbun . Kuroda said the U . S . Decision was based on incorrect data and an exaggerated sense of MITI ' s power to control market forces . " The U . S . Has excessive expectations . To stabilise supply - demand relations which have been disrupted by excess inventories since 1985 will take some time zulchzulu he said . Kuroda also laid part of the blame for low U . S . Chip sales in Japan on a lack of effort by American firms here . He said if he fails in talks tomorrow and Friday to forestall sanctions , he will seek further talks with U . S . Trade Representative Clayton Yeutter . U . S . Officials said this week ' s talks are unlikely to delay imposition of tariffs .

FED SETS TWO - DAY SYSTEM zulchzulu The Federal Reserve entered the government securities market to arrange two - day repurchase agreements for system account , a spokesman for the New York Fed said . Federal funds were trading at 6 - 3 / 4 pct at the time of the direct injection of temporary reserves , in line with Friday ' s 6 . 72 pct average .

zulchzulu WELCOMES U . S zulchzulu JAPAN AGREEMENT ON LOUVRE Bank of Japan governor Satoshi Sumita said he welcomed Monday ' s U . S . And West German joint confirmation of their commitment to the Louvre accord . Sumita said in a statement that world stockmarkets were excessively concerned about the economic future . The Bank of Japan will continue to adhere to a system of policy coordination based upon the Louvre accord of February , he said . The accord called for stability in foreign exchange rates . Exchange rates generally are regaining stability and the economies of industrialised nations are heading for a steady recovery , he said .

FED EXPECTED TO SET CUSTOMER zulchzulu The Federal Reserve is expected to intervene in the government securities market to supply temporary reserves indirectly via customer repurchase agreements , economists said . Economists expect the Fed to execute 2 . 0 - 2 . 5 billion dlrs of customer repos to offset pressures from the end of the two - week bank reserve maintenance period today . Some also look for a permanent reserve injection to offset seasonal pressures via an outright purchase of bills or coupons this afternoon . The Federal funds rate opened at 6 - 3 / 8 pct and remained at that level , up from yesterday ' s 6 . 17 pct average .

U . S . ENERGY FUTURES CALLED UNCHANGED TO LOWER Traders expect U . S . energy futures will open unchanged to slightly lower this morning with support near yesterday ' s lows . Crude futures are called unchanged to five cts weaker tracking unchanged domestic crudes and North Sea Brent crude , which traded at 18 . 01 dlrs a barrel today , about ten cts below yesterday ' s New York close . Traders said the supply squeeze in 15 - day forward April Brent appears to have ended . Product futures , which fell sharply yesterday , are due to open unchanged to 0 . 25 cent lower , traders said . Traders expect some followthrough selling in products but said gasoil futures in London will probably lend some support since they are trading as expected . May gasoil futures were off 1 . 50 dlrs a tonne this morning while June was down 1 . 25 dlrs in thin conditions .

MALAYSIA ' S 1986 MANUFACTURING EXPORTS RISE 24 PCT Malaysia ' s manufacturing exports rose by 24 . 5 pct to 15 . 1 billion ringgit in 1986 , chairman of the Export Promotion Council Ahmad zulchzulu Abdul zulchzulu said . The improved export performance was led by electrical and electronic products , textiles , footwear , clothing , processed food , timber , chemical and rubber products , he told a news conference . However , total gross exports for the year declined by 5 . 6 pct to 35 . 9 billion ringgit from 38 billion in 1985 due to a fall in major commodity exports and weak prices , he said .

JAPAN MUST TRY HARDER TO CUT SURPLUS - MINISTER Japan must try harder to reduce its trade surplus or the yen will come under renewed upward pressure , Economic Planning Minister Tetsuo Kondo . He told a press luncheon he hoped Japan could cut its current account surplus by some 10 billion dlrs a year until it is reduced to some 50 to 60 billion dlrs . In the fiscal year ended March 31 the surplus totalled 93 . 76 billion dlrs , or about 4 . 5 pct of GNP . The 6 , 000 billion yen economic stimulation package the government unveiled late last month would help slash Japan ' s current account surplus by five to six billion dlrs , he said .

TOSHIBA , SHARP RESTRAIN LAP - TOP PC EXPORTS TO EC Toshiba Corp & lt ; TSBA . T > and Sharp Corp & lt ; SHRP . T > decided to maintain exports of lap - top personal computers to the European Community ( EC ) at last year ' s levels , despite the halt of shipments to the U . S zulchzulu Company spokesmen told Reuters . They said the voluntary restraints were aimed at averting EC sanctions urged by European computer makers . The Europeans feared Japanese personal computers would flood EC markets after Washington imposed 100 pct tariffs last April . Toshiba and Sharp together control about 40 pct of the personal computer market in the EC , the Sharp spokesman said . Toshiba said exports of T1100 and T3100 lap - top computers would continue at 5 , 000 units a month for the time being . Sharp said exports to the EC of PC 7000 series lap - top personal computers would continue at last year ' s level of 12 , 000 to 16 , 000 units a year . Washington imposed the tariffs because of Japan ' s alleged failure to uphold a 1986 agreement on semiconductor trade .

EGYPT CANCELS WHEAT TENDER Egypt has cancelled its April 2 tender for 200 , 000 tonnes of any origin wheat for April 15 - 30 shipment , trade and Egyptian official sources said . Trade sources said the cancellation followed an offer by an Egyptian company , Islamic Corp , at 85 . 80 dlrs / tonne cost and freight , undercutting other traders ' offers of between 93 . 90 and 94 . 49 dlrs / tonne . An Egyptian trade official in Paris confirmed cancellation of the tender following the Islamic Corp offer , which he said the government had refused for legal reasons . The official denied trade reports that the government might have substituted a private deal with Islamic Corp for the original tender .

SENATOR URGES ACTION TO STABILIZE STOCK MARKETS Sen . John Heinz , R - Pa , urged the Administration to take steps to reduce volatility in the financial markets , including suspending program trading and limiting daily trading on stock index futures . Heinz said margin requirements for index futures , now six pct , should be the same as for common stock and equities . He urged creation of a task force to be headed by former Federal Reserve chairman Paul Volcker to coordinate international credit and zulchzulu policies among major nations and stabilize interest rates at the lowest possible levels .

ALGERIA TENDERING FOR BALANCE EEP WHEAT - TRADE Algeria is tendering tonight for 225 , 000 tonnes of hard red winter wheat at 94 . 00 dlrs per tonne , c and f , the balance of its original tender under the export bonus program , U . S . exporters said . Algeria bought 75 , 000 tonnes for November and early December zulchzulu at that bid , but USDA rejected the bid on wheat for later shipments , the sources said .

FED ADDS RESERVES VIA OVERNIGHT zulchzulu The Federal Reserve entered the U . S . Government securities market to arrange overnight System repurchase agreements , a Fed spokesman said . Dealers said that Federal funds were trading at 6 - 3 / 8 pct when the Fed began its temporary and direct supply of reserves to the banking system .

zulchzulu , zulchzulu AGREE RATE CUT NOT APPROPRIATE Prime Minister Yasuhiro Nakasone today agreed with Bank of Japan governor Satoshi Sumita that a further cut in the discount rate was not appropriate at present , central bank sources said . They told Reuters the two discussed the subject at a routine meeting . Sumita told Nakasone he did not feel a rate cut was appropriate and Nakasone expressed his understanding , the sources said . Currency dealers have speculated that Japan and West Germany might come under pressure at next week ' s Venice summit to cut interest rates to boost their economies . Nakasone , but not Sumita , is due to attend the summit .

AFRICAN STATES AGREE TO REGIONAL TARIFF CUTS Fifteen countries in Eastern and Southern Africa have agreed to cut tariffs on regional trade by 10 pct every two years up to 1996 . A statement by the Preferential Trade Area ( PTA zulchzulu which seeks to create a common market stretching from Ethiopia in the north to Lesotho in the south , said the governments would make the first tariff cut next year . In 1996 they would assess the impact of the tariff reductions and work out a new timetable for the complete elimination of all barriers to trade by the year 2000 . The PTA , set up in 1982 , groups zulchzulu , the Comoros , Djibouti , Ethiopia , Kenya , Lesotho , Malawi , Mauritius , Rwanda , Somalia , Swaziland , Tanzania , Uganda , Zambia and Zimbabwe . PTA sources said the agreement averted a split between members wanting more progress towards free trade and weaker states concerned about the effects on customs revenue . The reductions cover only a common list of 300 or so widely traded commodities and goods but PTA sources said the organisation planned to expand the list to include 425 items .

U . S . SENATORS PROPOSE BAN ON TOSHIBA IMPORTS Three U . S . Senators said they will propose a temporary ban on imports of all Toshiba products due to the company ' s illegal sales of sensitive high - technology goods to the Soviet Union . Senator Jake Garn , John Heinz and Richard Selby said at a hearing of the senate banking committee on export control , they will offer the proposal as part of a major trade bill when it is brought before the senate this summer . Garn , a Utah Republican , said " I am talking about specific retribution on a company that endangers the security of their own country and ours zulchzulu

JAPAN DOES NOT INTEND TO EASE CREDIT - OFFICIALS The Bank of Japan does not intend to ease credit policy further , bank officials told Reuters . They were responding to rumours in the Japanese bond market that the central bank was planning to cut its 2 . 5 pct discount rate soon , possibly before Prime Minister Yasuhiro Nakasone leaves for Washington on April 29 . Bank of Japan governor Satoshi Sumita will be in Osaka , western Japan on April 27 and 28 for the annual meeting of the Asian Development Bank , making a rate cut announcement early next week a virtual impossibility , they said . April 29 is a holiday here .

GHANA TO BUY CRUDE OIL FROM IRAN Ghana will import 15 , 000 tonnes of crude oil annually from Iran under an agreement reached in Tehran today , the Iranian news agency IRNA reported . The agency , received in London , said the accord was reached between Iranian Oil Minister Gholamreza zulchzulu and a visiting Ghanaian delegation headed by Foreign Minister Obed Asamoah . IRNA said that under the agreement , Iran will also provide technical and scientific assistance in manpower training and oil exploitation , production and refining .

U . K . MONEY MARKET GIVEN FURTHER 166 MLN STG HELP The Bank of England said it provided the market with further help totalling 166 mln stg during the afternoon . In band one , it bought 31 mln stg of treasury bills and three mln stg of bank bills at 9 - 7 / 8 pct , while in band two it bought 69 mln stg of bank bills at 9 - 13 / 16 pct . In addition , it bought 63 mln stg of band three bank bills at 9 - 3 / 4 pct . This brings the total assistance by the Bank so far today to 219 mln stg against a liquidity shortage it has estimated at around 300 mln stg .

U . K . MONEY MARKET GIVEN FURTHER 68 MLN STG HELP The Bank of England said it provided the market with a further 68 mln stg assistance this afternoon , bringing its total assistance on the day to 143 mln stg . Shortly before , the Bank said it had revised its estimate of the shortage up to 450 mln stg from the earlier forecast of 400 mln . During the afternoon , the bank bought 22 mln stg of band two bank bills at 9 - 13 / 16 pct and two mln stg of local authority bills plus 44 mln stg of bank bills in band four at 9 - 11 / 16 pct . These rates were in all cases unchanged from previous intervention levels .

UAE CENTRAL BANK CD YIELDS UNCHANGED Yields on certificates of deposit ( CDs ) issued today by the United Arab Emirates central bank were unchanged from those on last Monday ' s offer , the bank said . The one month yield was set at last week ' s 6 - 3 / 4 pct , while two and three month CDs also remained unchanged at 6 - 13 / 16 pct . The six month yield was set at seven pct .

CANADA FEBRUARY TRADE SURPLUS 1 . 2 BILLION zulchzulu Canada had a trade surplus of 1 . 25 billion dlrs in February compared with an upward revised 623 mln dlrs surplus in January , Statistics Canada said . The January surplus originally was reported at 533 mln dlrs . The February surplus last year was 189 mln dlrs . February exports , seasonally adjusted , were 10 . 44 billion dlrs against 9 . 85 billion in January and 10 . 05 billion in February , 1986 . February imports were 9 . 19 billion dlrs against 9 . 23 billion in January and 9 . 86 billion in February , 1986 .

Miyazawa says Baker ' s remarks were aimed at just reaffirming Louvre agreement Miyazawa says Baker ' s remarks were aimed at just reaffirming Louvre agreement

U . S . EXPORTERS REPORT 125 , 000 TONNES OF CORN SOLD TO USSR FOR 1987 / 88 U . S . EXPORTERS REPORT 125 , 000 TONNES OF CORN SOLD TO USSR FOR 1987 / 88

Miyazawa says G - 7 still strongly supports Louvre Accord Miyazawa says G - 7 still strongly supports Louvre Accord

U . K . MONEY MARKET GIVEN 53 MLN STG ASSISTANCE The Bank of England said it provided the money market with 53 mln stg assistance in the morning session . This compares with the bank ' s estimate of a shortage in the system of around 300 mln stg which it earlier revised up from 250 mln . The central bank made outright purchases of bank bills comprising 46 mln stg in band three at 9 - 3 / 4 pct and seven mln stg in band four at 9 - 11 / 16 pct .

U . S . BUSINESS LOANS FELL 896 MLN zulchzulu Business loans on the books of major U . S . banks , excluding acceptances , fell 896 mln dlrs to 275 . 61 billion in the week ended June 10 , the Federal Reserve Board said . The Fed said that business loans including acceptances fell 546 mln dlrs to 278 . 12 billion dlrs .

YIELD ON 91 - DAY SAMA DEPOSITS RISES The yield on 91 - day bankers security deposit accounts issued this week by the Saudi Arabian Monetary Agency ( SAMA ) rose to 6 . 43896 pct from 6 . 21563 a week ago , bankers said . SAMA lowered the offer price on the 500 mln riyal issue to 98 . zulchzulu from 98 . zulchzulu last Monday . Like - dated interbank deposits were quoted today at 6 - 3 / 4 , 5 / 8 pct . SAMA offers a total of 1 . 9 billion riyals in 30 , 91 and 180 - day accounts to banks in the Kingdom each week .

LONDON GRAIN FREIGHT ENQUIRIES Antwerp / Libya 5 , 500 mt bagged flour 14 daps 24 - 27 / 4 . New Orleans / Guanta 9 , 387 mt bulk hss 3 , 000 / 13 days 25 - 4 / 5 - 5 . Naantali / Saudi Red Sea 30 , 000 / 35 , 000 mt barley 4 , 000 / 3 , 000 20 - 30 / 4 or early May . Dunkirk / Xingang 12 , 000 mt bagged flour 1 , 500 / 1 , 700 13 - 20 / 4 . Toledo / Seaforth 17 , 000 mt hss offers 18 . 50 dlrs four days / 8 , 000 13 - 15 / 4 . River Plate / Malaysia 20 , 000 / 22 , 000 long tons hss 2 , 000 / 2 , 000 Apr .

SRI LANKA GETS USDA APPROVAL FOR WHEAT PRICE Food Department officials said the U . S . Department of Agriculture approved the Continental Grain Co sale of 52 , 500 tonnes of soft wheat at 89 U . S . Dlrs a tonne C and F from Pacific Northwest to Colombo . They said the shipment was for April 8 to 20 delivery .

German May trade surplus 10 . 6 billion marks ( April surplus 8 . 9 billion ) - official German May trade surplus 10 . 6 billion marks ( April surplus 8 . 9 billion ) - official

zulchzulu SETS NEW REPURCHASE TENDER The Bundesbank set a new tender for a 28 - day securities repurchase agreement , offering banks liquidity aid at a minimum bid rate of 3 . 50 pct , a central bank spokesman said . Banks must make their bids by 1400 GMT today and funds allocated will be credited to accounts tomorrow . Banks must repurchase securities pledged on July 1 .

U . K . MONEY MARKET GETS 103 MLN STG HELP The Bank of England said it operated in the money market this morning , buying 103 mln stg bank bills . The central bank bought in band one 60 mln stg at 9 - 7 / 8 , in band two eight mln at 9 - 13 / 16 , in band three 26 mln at 9 - 3 / 4 and in band four nine mln stg at 9 - 11 / 16 pct . This compares with the bank ' s forecast of a 400 mln stg shortfall today .

CHILEAN TRADE SURPLUS NARROWS SLIGHTLY IN FEBRUARY chile ' s trade surplus narrowed to 102 . 2 mln dlrs in february , from 105 . 4 mln dlrs in the same month last year , but it was above the 18 . 2 - mln - dlr surplus recorded in january 1987 , the central bank said . Exports in february totalled 379 . 4 mln dlrs , 17 . 2 pct above the january figure . Imports fell 9 . 2 pct from the previous month to 277 . 2 mln dlrs . The figures for the same month last year were 314 mln and 208 . 6 mln dlrs , respectively . The accumulated trade surplus over the first two months of 1987 stands at 120 . 4 mln dlrs against 132 . 8 mln dlrs the previous year .

FED EXPECTED TO SET THREE - DAY REPURCHASE PACTS The Federal Reserve is expected to enter the U . S . Government securities market to add temporary reserves directly by arranging three - day System repurchase agreements , economists said . They said the Fed may add the reserves indirectly instead via a large round , two billion dlrs or more , of customer repurchase agreements . Federal funds , which averaged a high 6 . 35 pct on Friday , opened at 6 - 7 / 16 pct and traded between there and 6 - 1 / 2 pct .

Bank of France says it leaves intervention rate unchanged at 7 - 1 / 2 pct Bank of France says it leaves intervention rate unchanged at 7 - 1 / 2 pct

ANZ BANKING GROUP SAYS IT WILL CUT PRIME RATE TO 16 . 00 PCT FROM 16 . 50 ON JUNE 22 ANZ BANKING GROUP SAYS IT WILL CUT PRIME RATE TO 16 . 00 PCT FROM 16 . 50 ON JUNE 22

MARATHON RAISED CRUDE POSTED PRICES BY 50 CTS A BARREL EFFECTIVE OCTOBER 16 . MARATHON RAISED CRUDE POSTED PRICES BY 50 CTS A BARREL EFFECTIVE OCTOBER 16 .