``For the time being that might be the biggest risk,'' Fukui told reporters in Basel, Switzerland, yesterday. World central bankers, including China's central bank Governor Zhou Xiaochuan and Indian Reserve Bank Governor Y.V. Reddy, are attending the annual meeting of the Bank for International Settlements, which is controlled by 55 of the world's largest central banks. The bank's annual report will be released at noon local time today. The 67 percent surge in oil prices in the past year is leaving consumers with less money to spend and increasing costs for companies. The Organization for Economic Cooperation and Development on May 24 cut its 2005 forecast for economic expansion in its 30 member nations to 2.6 percent from 2.9 percent. ``The slowdown will be at the top of their concerns,'' said Rajeev de Mello, who helps manage the equivalent of around $8 billion in European bonds at Pictet & Cie. in Geneva. ``They'll be wondering whether it's just temporary or the beginning of something more sinister. The impact of oil prices feeds into that.'' Futures contracts for a barrel of crude oil reached $60 in New York, the highest prices on record. Bond Yields Drop Bond yields in Germany, the U.S. and Japan, the world's three largest national economies, have all declined since March, suggesting investors may be betting that slowing economic growth will force central banks to lower their interest rates. The yield on German 10-year bonds, Europe's benchmark, fell to a record 3.105 percent on June 24. The increase in oil prices ``isn't a relief for the current economic situation,'' ECB council member Klaus Liebscher, who also attended the Basel meetings, said yesterday. Executive board member Gertrude Tumpel-Gugerell said on June 25 said oil prices are ``an impediment'' to economic expansion. Iran and other OPEC countries are pumping oil at ``the highest possible level'' and can't increase production to meet surging global demand Iranian central bank governor Ebrahim Sheibany told reporters yesterday in Basel. China Policy makers in the U.S. and Europe have said China could help the global economy by loosening the yuan's link to the dollar and allowing the currency to rise. That may shrink a record $60.6 billion U.S. monthly trade deficit and boost growth among the 12 nations sharing the euro. ``The time is not ripe yet'' to scrap the link that pegs the yuan at about 8.3 to the U.S. dollar, Zhou said in an interview in Basel on June 25. Chinese Premier Wen Jiabao said more time is needed before any changes can be made yesterday. It's ``too early to speak of a revaluation of the renminbi, because China is also still thinking about the problem,'' Bank of Japan Governor Toshihiko Fukui said in Basel this weekend. ``We're just only expecting a better redistribution of resources.'' The Institute of International Finance in May forecast China's economic growth this year may match 2004's 9.5 percent. China's official target is a growth of 8 percent. Pressure To Cut at ECB While China is booming, the Organization for Economic Cooperation and Development cut its estimate for global growth this year on May 24, citing rising fuel costs and dimming outlook for Europe. The Paris-based OECD expects an expansion of 2.6 percent this year in its 30 member countries and called on the ECB to lower its benchmark interest rate, which has been at a six- decade low 2 percent for more than two years. ECB President Jean-Claude Trichet, who has also been pressured by politicians such as Italian Prime Minister Silvio Berlusconi and German Economy and Labor Minister Wolfgang Clement, said in an article in France's Le Monde newspaper on June 15 he doesn't have a bias as to the direction of the next rate move. That's a retreat from his earlier position, expressed on May 4, that a lower lending rate was ``not an option.'' ``Rates are appropriate, and for the foreseeable future, I have not seen any evidence that would deviate me from this analysis,'' said ECB colleague Yves Mersch, who heads Luxembourg's central bank, in an interview yesterday. Manufacturing in the 12 countries sharing the euro contracted the most in two years in May and business confidence fell to a 21- month low. The European Commission may lower its 2005 growth forecast for the third time in eight months if the cost of oil stays at $60 a barrel, European Union Monetary Affairs Commissioner Joaquin Almunia said in an interview on June 25. U.S., Japan ``Developments in the euro area are the weakest of any region represented at the meeting,'' said Julian Callow, Chief European economist at Barclays Capital in London. ``The tone from the U.S. and Japan will be more positive.'' The U.S. will outpace Europe and Japan in terms of economic growth this year, according to forecasts by the International Monetary Fund. Federal Reserve Chairman Alan Greenspan said on June 9 that the U.S. is on a ``firm footing.'' Economists expect the Federal Reserve to raise its benchmark rate to 3.25 percent when it meets June 30, according to the median of 72 forecasts in a Bloomberg survey. While growth is still faster than in the Europe, the U.S. Conference Board's index of leading economic indicators declined for the fourth month in five in May, which may signal slower expansion in the next three to six months. Japan grew faster than the U.S. in the first quarter to pull out of its fourth recession since 1991, growing at an annualized 4.9 percent pace. The expansion is not likely to keep that pace; the country's index of leading economic indicators signaled slowing growth for a third month in April, a report form June 8 showed. With the Japanese central bank's benchmark rate already near zero after years of falling consumer prices, Governor Fukui will not be able to boost the country's expansion with a rate cut. The bank has vowed to stick to its policy until consumer prices stop falling for at least a few months. PIN/Bloomberg