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BRINGING HARMONY TO ALL THE COMMUNITIES
Volume 12 Issue 308 Jumada-al-Awal 28, 1433 AH / April 20 2012 - $1
Bi-Weekly & Bilingual
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Syria urged to implement faltering peace plan Khadr transfer request from Gitmo now in Ottawa’s hands Omar Khadr may be one step closer to returning to Canadian soil after the U.S. officially filed a formal request to transfer the convicted war criminal to Canadian custody. Khadr, 25, has spent the past decade in the U.S. detention centre in Guantanamo Bay, Cuba following his arrest as a 15-year-old terror suspect in Afghanistan.
Central bank stands pat but hints at rate hikes
Bank of Canada governor Mark Carney elected today to keep the benchmark target for the overnight rate unchanged at one per cent, a level held at since September 2010. Despite standing pat for the 13th consecutive policy session, the central bank offered a few hints that the outlook has improved enough to consider raising interest rates sooner rather than later. The bank may have held steady, but the choice of words in the statement accompanying the decision itself “sent a clear signal that it may not stay there a whole lot longer,” BMO economist Doug Porter noted. The central bank tipped its hand most obviously near the end of the statement. “Some modest withdrawal of the present considerable monetary policy stimulus may become appropriate,” the bank said Tuesday. That may not sound overly aggressive, but compared to previous statements, it’s tellingly hawkish. In its outlook, the bank raised its forecast for Canada’s economy this year. The bank now expects the economy to expand by 2.4 per cent in 2012 and 2013, a rise from two per cent previously. That stronger growth in an environment of low rates is a recipe for inflation, something the central bank is mandated to keep in a range of between two and three per cent. The bank also said that personal debt loads remain “the biggest domestic risk” to Canada’s economy, an additional sign the bank is getting closer to making good on its repeated warnings for Canadians to get
their financial houses in order. The bank also noted that some of the “slack” in the economy is tightening, meaning the economy is becoming more efficient — another sign the bank has leeway to act. The Canadian dollar rose sharply following the statement, gaining almost a full cent to 101.05 cents US within minutes of the bank’s decision becoming public. That reaction in the dollar actually made Bank of Canada governor Mark Carney’s balancing act even harder, as the bank again cited the persistently high Canadian loonie as a drag on growth moving forward. Raising rates will add more lift to the loonie, widening the spread with Canada’s major trading partner, the U.S., which would in turn slow Canada’s economy. Some say a strong loonie isn’t Carney’s only conundrum. Capital Economics analyst David Madani said he thinks Carney is genuine in his desire to discourage Canadians from taking on more debt. But he said taking action toward that would be a shock to the economy in the short term at least. “If the bank did actually raise rates, we suspect that it would have to reverse course again pretty quickly as the housing market slumped,” Madani said. Beyond a vague pledge to raise rates if it was “appropriate,” the bank was characteristically vague in the details. Still, most experts predict a hike some time later this year, or possibly into 2013 at the latest. “The bank is clearly uncomfortable with keeping interest rates below inflation when household debt continues to grind higher, and with the economy poised to reach capacity by early next year,” Porter said. “At a minimum, the bank will be raising rates …sometime in the first half of next year.” “I would interpret that as something on the order of three quarter-point hikes [to 1.75 per cent] and then followed by another pause,” CIBC economist Avery Shenfeld said. Source: CBC News
The Arab League ministerial committee on Syria has backed the six-point plan devised by international envoy Kofi Annan and called on Damascus to stick to it. “We hope the Syrian government responds” to Annan’s plan, Sheikh Hamad bin Jassem al-Thani, Qatar’s prime minister, said during talks in Doha on Tuesday. “We don’t see any progress in implementing it. Nothing has changed except for (Damascus) accepting (the plan)”, he said at the opening of the meeting. “Implementation is more important.” The talks came as UN observers admitted on Tuesday they face a tough task to firm up a ceasefire in Syria, as five civilians were killed in the latest violence on the sixth day of a tenuous truce. Arab League Secretary General Nabil al-Arabi, attending the Doha meeting along with Annan, called for the ceasefire to be implemented “completely and immediately”. “Annan’s mission is a political one which would take some time,” he said. The Arab ministerial committee, chaired by Qatar, includes Saudi Arabia, Oman, Egypt, Sudan, Algeria, Iraq, and Kuwait. After a spike in violence the Arab League ended its own Syrian monitoring mission in late January, barely a month after sending observers. On Monday, Qatar’s Emir Sheikh Hamad bin Khalifa al-Thani said the chances of Annan’s plan succeeding “are no higher than three per cent” and that Syrians should not be supported through peaceful means but “with arms”. Qatar has taken an aggressive stance in favour of the uprising against Syrian President Bashar al-Assad. Continuing violence in Syria has dampened expectations in many quarters for the prospects of a peace plan proposed by Annan, which was supposed to halt all fighting and bring about a withdrawal of Syrian heavy weaponry from areas under attack. The plan was agreed to by Assad, but compliance by Syrian forces appears to have been partial, despite the arrival in Damascus on Sunday of a six-man advance team of UN monitors. UN officials said the team was still drawing up plans, and the head of the observer team, Moroccan Colonel Ahmed Himmiche, said on Tuesday it would take time to reach badly affected towns
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