India''s export growth is impacted by the Global economic slowdown, which slowed to 10.4 per cent in September to $13.74 billion. Along with this, the country''s outward shipments had soured 26.9 per cent, in August. Imports in September jumped 43.3 per cent to $24.38 billion mainly due to more costly oil imports.
Tuesday, November 4, 2008
Monday, November 3, 2008
India To Present Wish List To Meeting Of Industry Leaders - Nov 03, 2008
India Inc will present its wish list at a meeting of industry leaders convened by Prime Minister Manmohan Singh on Monday to discuss the impact of global meltdown and explore options to bolster the economy.Preparing for the meeting, apex industry associations Confederation of Indian Industry (CII) and Federation of Indian. Chambers of Commerce and Industry (FICCI) held the meetings of their core group, including past presidents, to flag the issues that they should take up with the PM.
Ratan Tata, Anand Mahindra, Mukesh Ambani, Anil Ambani, K P Singh, Sunil Bharti Mittal and Deepak Parikh are among those expected to attend the meeting -- two days after RBI decided to inject another Rs 85,000 crore into the financial system by revising downward short-term lending rate and key deposit requirements for banks.
High on the agenda of the chambers is the spurting interest rates and drying up of liquidity for the industry, which recorded a dismal growth of 1.3 per cent in August this year.With the RBI providing Rs 2,65,000 crore in the last onemonth, one of the industry''s main demands has largely been met. However, industry sources feel more was required since the overnight inter-bank lending rates are still quite high.
However, the industry leaders would demand immediate steps by the government at the meeting, that comes a day before the Finance Minister P Chidambaram''s conference with heads of PSU banks where he would ask them to consider softening of interest rates. While the government has given assurances on the safety of Indian banks, high interest rates, which according to CII President K V Kamath have surged to ''high teens'', have particularly impacted sectors like real estate and automobile.
Ratan Tata, Anand Mahindra, Mukesh Ambani, Anil Ambani, K P Singh, Sunil Bharti Mittal and Deepak Parikh are among those expected to attend the meeting -- two days after RBI decided to inject another Rs 85,000 crore into the financial system by revising downward short-term lending rate and key deposit requirements for banks.
High on the agenda of the chambers is the spurting interest rates and drying up of liquidity for the industry, which recorded a dismal growth of 1.3 per cent in August this year.With the RBI providing Rs 2,65,000 crore in the last onemonth, one of the industry''s main demands has largely been met. However, industry sources feel more was required since the overnight inter-bank lending rates are still quite high.
However, the industry leaders would demand immediate steps by the government at the meeting, that comes a day before the Finance Minister P Chidambaram''s conference with heads of PSU banks where he would ask them to consider softening of interest rates. While the government has given assurances on the safety of Indian banks, high interest rates, which according to CII President K V Kamath have surged to ''high teens'', have particularly impacted sectors like real estate and automobile.
FM Pushes For Lower Lending Latest Policy Package - Nov 03, 2008
Terming as a right signal the RBI''s latest policy package to inject more liquidity in the system, Finance Minister P Chidambaram on Sunday said he will ask the PSU banks to consider lowering lending rates. In an exclusive interview to PTI, the Minister said he would take the issue of interest rate cut "forward" during a meeting with chairpersons of public sector banks in Delhi on November four.
I am happy with the policy package announced by the RBI.When it announced its (peak season) policy on Oct 24, the RBI had promised swift action in case it is necessary to infuse more liquidity.I am happy that the RBI has responded swiftly, he said in his reaction to yesterday''s policy package announced by the central bank.
In a slew of announcements, the RBI had yesterday cut the repo rate (the rate at which it lends to banks and is a signal to banks to reduce their rates) 50 basis to 7.5 per cent and the cash reserve ratio by 100 basis points to 5.5 per cent and the statutory liquidity ratio by 100 basis points to infuse an additional Rs 85,000 crore into the system.The central bank had already injected in October additional liquidity of Rs.1,85,000 crore in the wake of global financial crisis and depression in the US that had spread fears in India of a recession and brought in volatility in the stock markets.
Chidambaram said the RBI''s policy was also a signal to the banks that they should now now consider lowering their interest rates. When I meet the Chairmen of public sector banks on November four I will take this matter forward, Chidambaram said, adding that the RBI''s latest package would greatly benefit the industry and trade, especially the small and medium enterprises.
I am happy with the policy package announced by the RBI.When it announced its (peak season) policy on Oct 24, the RBI had promised swift action in case it is necessary to infuse more liquidity.I am happy that the RBI has responded swiftly, he said in his reaction to yesterday''s policy package announced by the central bank.
In a slew of announcements, the RBI had yesterday cut the repo rate (the rate at which it lends to banks and is a signal to banks to reduce their rates) 50 basis to 7.5 per cent and the cash reserve ratio by 100 basis points to 5.5 per cent and the statutory liquidity ratio by 100 basis points to infuse an additional Rs 85,000 crore into the system.The central bank had already injected in October additional liquidity of Rs.1,85,000 crore in the wake of global financial crisis and depression in the US that had spread fears in India of a recession and brought in volatility in the stock markets.
Chidambaram said the RBI''s policy was also a signal to the banks that they should now now consider lowering their interest rates. When I meet the Chairmen of public sector banks on November four I will take this matter forward, Chidambaram said, adding that the RBI''s latest package would greatly benefit the industry and trade, especially the small and medium enterprises.
Foreign Exchange Reserves Slipped By Billion Fall - Nov 03, 2008
The foreign exchange reserves slipped by $15.47 billion - the largest fall in a week - to $258.415 billion for the week ended October 24. In the previous week, the reserves had dropped by $118 million to $273.886 billion. The forex kitty has been falling for the last few months with foreign institutional investors resorting to heavy selling in the equity market and the RBI trying to save the falling rupee.
In October alone, forex reserves have fallen by a total of $33.4 billion. The main reason for the fall in the reserves could be the aggressive selling of dollars by the RBI in the currency market, said Mr Moses Harding, Executive Vice-President, Head-wholesale Banking Group, IndusInd Bank. As per data from the Securities and Exchange Board of India, FIIs sold a total of Rs 2,524.5 crore in equities.
However, according to data from the Bombay Stock Exchange, FIIs were net sellers to the tune of Rs 3,853.42 crore in the same week. The SEBI data pertains to all the activities undertaken by FIIs in Indian securities market, including trades done in secondary market, primary market and activities involved in right/bonus issues, private placement, merger and acquisition etc.
India''s forex reserves had reached its peak of $316.17 billion, during the week ended May 23, 2008.According to the RBI data, for the week under review, foreign currency assets declined by $15.467 billion to touch $249.394 billion. Gold remained unchanged at $8.565 billion. SDRs increased by $5 million to $9 million. The country''s reserve position in the IMF fell by $9 million to $447 million.
In October alone, forex reserves have fallen by a total of $33.4 billion. The main reason for the fall in the reserves could be the aggressive selling of dollars by the RBI in the currency market, said Mr Moses Harding, Executive Vice-President, Head-wholesale Banking Group, IndusInd Bank. As per data from the Securities and Exchange Board of India, FIIs sold a total of Rs 2,524.5 crore in equities.
However, according to data from the Bombay Stock Exchange, FIIs were net sellers to the tune of Rs 3,853.42 crore in the same week. The SEBI data pertains to all the activities undertaken by FIIs in Indian securities market, including trades done in secondary market, primary market and activities involved in right/bonus issues, private placement, merger and acquisition etc.
India''s forex reserves had reached its peak of $316.17 billion, during the week ended May 23, 2008.According to the RBI data, for the week under review, foreign currency assets declined by $15.467 billion to touch $249.394 billion. Gold remained unchanged at $8.565 billion. SDRs increased by $5 million to $9 million. The country''s reserve position in the IMF fell by $9 million to $447 million.
Rupee Strengthened To Its Highest In A Week - Nov 03, 2008
Rupee strengthened to its highest in a week on Oct 31 against the greenback on the back of sharp rise in equity markets and expectations of fresh capital inflows after slashing of interest rates by US Federal Reserve. Rupee ended at 49.44/46 per dollar, its strongest since October 22, and 0.5 per cent above Wednesday''s close. The market was shut on Thursday for a local holiday.
In active trade at the Interbank Foreign Exchange (Forex) market, the domestic unit resumed strong at 49.45/47 and moved up further to quote at 49.34/35 a dollar in late morning deals from previous close of 49.67/68. It moved in a range of 49.52 and 49.29 a dollar. According to forex dealers, the rupee got support from sharp rise in Indian benchmark sensex, which was up by 756 points or 8.36 per cent at 1030 hrs.
They also expect fresh inflows from foreign funds after cutting of key interest rates by 50 basis points by the US Federal Reserve. In New York yesterday, the Dow Jones Industrial Average and the Nasdaq Composite Index ended higher while Asian indices were quoting mixed this morning. Lack of any dollar buying by oil refiners and importers also helped the rupee surge. Global crude oil was quoting lower at nearly USD 64 a barrel in Asian trade today.
In active trade at the Interbank Foreign Exchange (Forex) market, the domestic unit resumed strong at 49.45/47 and moved up further to quote at 49.34/35 a dollar in late morning deals from previous close of 49.67/68. It moved in a range of 49.52 and 49.29 a dollar. According to forex dealers, the rupee got support from sharp rise in Indian benchmark sensex, which was up by 756 points or 8.36 per cent at 1030 hrs.
They also expect fresh inflows from foreign funds after cutting of key interest rates by 50 basis points by the US Federal Reserve. In New York yesterday, the Dow Jones Industrial Average and the Nasdaq Composite Index ended higher while Asian indices were quoting mixed this morning. Lack of any dollar buying by oil refiners and importers also helped the rupee surge. Global crude oil was quoting lower at nearly USD 64 a barrel in Asian trade today.
Saturday, November 1, 2008
Call Rates Increase To 13.5pc - Nov 1, 2008
The inter-bank call rates increased on Oct 29, as banks borrowed in the overnight market to meet their funds shortage. Call rates ended considerably higher at 13.5 per cent, as against Oct 27 close of 9.50-9.75 per cent. The Reserve Bank of India''s intervention in the forex market to stabilise the rupee is also drawing out liquidity in the system.
With the liquidity crunch in the markets, banks borrowed close to Rs 56,000 crore from the RBI under the liquidity adjustment facility on Oct 29. In the two-day repo auction under the first LAF, the RBI got and accepted 35 bids for Rs 27,125 crore. There were no reverse repo bids. In the two-day repo auction under the second LAF, the RBI received and accepted 33 bids for Rs 28,970 crore.
With the liquidity crunch in the markets, banks borrowed close to Rs 56,000 crore from the RBI under the liquidity adjustment facility on Oct 29. In the two-day repo auction under the first LAF, the RBI got and accepted 35 bids for Rs 27,125 crore. There were no reverse repo bids. In the two-day repo auction under the second LAF, the RBI received and accepted 33 bids for Rs 28,970 crore.
RBI Relaxes Forex Derivatives Accounting Norms - Nov 1, 2008
The Reserve Bank on Oct 29 relaxed the accounting guidelines for valuing derivatives, a move that will help the Indian banks with overseas branches to post better financial results. It has now been decided to confine the applicability of the principle of borrower-wise asset classification to only the overdue arising from forward contracts and plain vanilla swap and options", the central bank said, while modifying its earlier notification for off-balance sheet exposures of banks.
Under the borrower-wise classification norms, all other funded facilities given to defaulting clients are required to be shown as non-performing assets (NPAs). Earlier, the RBI had said borrower-wise classification norms would apply to all funded facilities of a client if the receivables representing mark-to-market value of a derivative contract remain unpaid for over 90 days.
With the modification of the earlier circular, the unpaid amount towards foreign exchange derivatives contract entered between April 2007 and June 2008 will have to be parked in a separate account in the same of client. RBI further said that amount overdue for more than 90 days will not make other funded facilities provided to the client as NPA as per the borrower-wise asset classification principle.
Under the borrower-wise classification norms, all other funded facilities given to defaulting clients are required to be shown as non-performing assets (NPAs). Earlier, the RBI had said borrower-wise classification norms would apply to all funded facilities of a client if the receivables representing mark-to-market value of a derivative contract remain unpaid for over 90 days.
With the modification of the earlier circular, the unpaid amount towards foreign exchange derivatives contract entered between April 2007 and June 2008 will have to be parked in a separate account in the same of client. RBI further said that amount overdue for more than 90 days will not make other funded facilities provided to the client as NPA as per the borrower-wise asset classification principle.
Inflation Drops Below 11%, Down To 10.68% - Nov 1, 2008
The annual wholesale price index-based inflation increased 10.68 per cent during the week ended Oct 18, slower than the previous week''s annual rise of 11.07 per cent, the Commerce Ministry said in a statement in New Delhi on Oct 30. Inflation has fell below the 11 per cent mark for the first time since May this year. The official WPI for ''All Commodities'' in the latest reported week fell by 0.2 per cent to 238.3 points, from 238.8 points in the previous week.
On a disaggregated basis, in case of the ''Primary Articles'' group, the annual inflation declined to 10.92 per cent in the latest reported week compared with 11.53 per cent in the previous week. Out of a total of 98 articles, 15 articles showed a decline in the current week. These comprised wheat, arhar, urad, moong, raw cotton, raw rubber, potatoes, groundnut seed, papaya, banana, apples, cashew nuts and corriander.
The fuel and power commodity group fell to 14.09 per cent in the current week compared to 14.49 per cent in the previous week. Manufactured products fell to 9.26 per cent compared to 9.53 per cent. Inflation of 30 essential commodities fell to 7.47 per cent in the latest week, from 7.80 per cent in the previous week.
Gold Rises On Retail Buying For Festivals - Nov 1, 2008
Tracking strong global cues gold prices surged by Rs 560 to close at Rs 12,570 per ten gram on the bullion market here on brisk buying by retail customers for the ongoing festival and marriage season. Standard gold rose by Rs 320 at Rs 12,570 per ten gram while Jewellery, which opened after two day''s break met with a rush of buyers for jewellery, quoted higher by Rs 560 at Rs 12,420 per ten gram. Sovereign gained Rs 100 at Rs 10,500 per piece of eight gram. Marketmen said, the precious metal which had remained in demand during recent festivals was boosted by customers buying jewellery for marriages.
The market also received support as all buying shifted to the national capital following closure of main bullion markets in Mumbai, they added. The bullion prices spiralled after commodity prices posted biggest surge in five decades on speculation reduced borrowing costs in US and China may help spur recovery in raw material demand. Also, the U.S. cutting borrowing rate pushed up the demand for the yellow metal.
In Asia, gold rose 2.1 per cent to 770.93 dollar an ounce and silver by 3.6 cents at 10.23 dollar an ounce. The yellow metal climbed for a third day in Asia as the dollar dropped against the euro, raising appeal of the metal as an alternative investment, after the U.S. Fed cut interest rates to match a half-century low, was a positive factor for gold.
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