Moody’s has confirmed it is keeping Spain’s credit rating at Baa3 with a negative outlook, the lowest level of investment grade, based partly on the prospect of the European Central Bank will make a move to buy Spanish bonds in order to contain the volatility afflicting the market. The agency opted against lowering the country’s rating to junk level, based on a variety of positive indicators including the diminishing chance that Spain will lose access to the bond market. The euro started to rally against the dollar after investors’ fears that Spain would be lowered to junk status were quashed by Moody’s reports. However the decision to keep the country on a negative outlook highlights Moody’s apprehension and the fact that the situation presents high risk “skewed to the downside”. “The maintenance of market access is critical because the risk that some form of burden-sharing will be imposed on bondholders is material for those countries that rely entirely or to a very large extent on official-sector funding for an extended period of time,” the ratings agency said in a statement. “Should any such factors lead the rating agency to conclude that the Spanish government had either lost, or was very likely to lose, access to private markets, then Moody’s would most likely implement a downgrade, potentially of multiple notches.” Standard & Poor’s has also lowered Spain’s rating to the lowest level of investment grade with a negative outlook.

A deal between Germany and Singapore will help Berlin track down potential tax evaders, using Singaporean banks to hide away assets. It was announced by Germany’s finance minister Wolgang Schäuble, who is visiting Singapore, and local authorities. The deal follows another announcement in early October by the Monetary Authority of Singapore (MAS) which plans to heavily penalise banks that ‘facilitate tax evasion’ by dealing with tax crimes as money laundering ‘predicate offences’. The new laws will apply to both new and existing accounts. The MAS said the new measures will “discourage the entry of tax evasion monies into our financial system and protect Singapore’s reputation as a trusted financial centre.” The measures have been expected for over a year. The new measure require banks to carry out stringent due diligence on prospective and existing customers, and to monitor all transactions carefully. Any suspicious activity must be reported to the MAS at the risk of incurring fines of up to $1m. The terms of the arrangement between Singapore and Germany will see the two countries sharing information to ensure domestic tax laws are being observed when moving money abroad, independent of where the taxpayer resides. Singapore had in excess of $1tn of assets under management at the end of 2011, and is likely to report an increase this year.

The Indian government has announced plans to award $2.3bn worth of state-sponsored highway contracts in the next six months in a bid to boost the quality of infrastructure in the country. The country has previously operated under a system that saw private investors fund the construction of highways through bank loans, and recouped their investment over time from income generated from the roads, including toll fees. However the recent credit crunch has made it difficult for private builders to obtain loans, forcing a rethink of the strategy. In the first six months of this financial year the government put 1,297km of highways up for auction, to be developed by private builders, but it only received bids on around 500km, according to the National Highways Authority of India Chief General Manager G. Suresh. The full year target is to build around 9,000km. It has been estimated that India’s poor highway system costs the country $5.5bn annually, as millions of pounds of fresh produce rots in the heat of traffic jams on the way to markets. Local truck drivers claim is takes 65 hours to drive the 1,374km from Mumbai to Delhi, an average speed of 21km per hour. The automobile industry expects that 3.5m new vehicles will hit Indian roads this year.

Brazil’s central bank lowered their benchmark Selic interest rate by 25 basis points, driving it to a historic low. Interest rates have been slashed nearly in just over one year, and now rest at 7.25 percent. Hours later, Seoul mimicked the decision by lowering the benchmark seven-day repurchase rate, again by 25 basis points, to 2.75 percent. Both countries acted in response to the IMF announcement that it believes the world economy is doing worse than originally anticipated. Emerging market like Brazil and South Korea are slowing down even faster, according to the IMF review. Both countries also lowered their growth rate forecasts in domestic reviews. “A rate cut now is better than doing it later to support growth,” Governor Kim Choong Soo told a press conference in Seoul following the rate cuts. “Monetary easing now will do more good than harm.” The Brazilian monetary committee in charge of the decision to slash rates said it considered “the risks to inflation, the recovery in domestic economic activity and the complexity enveloping the international environment.” The country is relying on maintaining low interest rates and a government plan to safeguard some industrial sectors by deploying protectionist measures and directed tax cuts in order to reverse the slowdown. The IMF announced in its review that it expects the Brazilian and South Korean economies to rebound to a four percent and 3.2 percent growth next year, respectively.

Toyota has announced another wave of recalls following concerns that faulty window switches could get jammed or break down in the driver’s and passenger’s side. The Japanese car manufacturer has also warned that owners should not attempt to resolve the situation with commercial lubricants because they can potentially “lead to overheating and/or melting of the switch assembly”. The recall will affect around 1.39 million vehicles in Europe, 2.47 million in the US and 1.4 million in China. Toyota claims there have been no accidents as a result of the switch problem. The new wave of recalls comes two months after the company announced the inclusion of two more models in the 2009 recall announced after floor mats became trapped under the accelerator. This fault has been linked to dozens of accidents. Around 12 million vehicles have been recalled worldwide because of the floor mats. Since 2009 Toyota has been plagued with quality issues. There is speculation that the company’s fast growth may have compromised its relationship with suppliers and caused an unintentional downgrade in quality. Toyota maintains that the recalls are voluntary and that it takes a responsible company to quickly identify and rectify safety issues.