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Hike in lending rates unlikely
Price Rise
K.V. Kamath
Acute shortage of MS wire rods in region
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Major airlines hike fares
Traders irked over duty on basmati export
Cycle industry eyes global market
Fed cuts rate by 25 bps
Exports up 23 pc in 2007-08
Adidas to expand network
Ford to double output in India
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Hike in lending rates unlikely
New Delhi, May 1 “They (PSU bankers) are happy that only the cash reserve ratio (CRR) has been hiked and policy rates have been untouched. They do not expect the CRR hike to impact interest rates. So going forward, in the reasonable future, I do not expect an increase in interest rates by public sector banks,” finance minister P. Chidambaram told reporters here after meeting PSU bank heads. Leading bankers said interest rates were likely to remain as they were in the near future. SBI chairman O.P Bhatt said: “I do not see them (interest rates) rising in the near future.” Rates are likely to remain flat in the near term, he said. When asked about the interest rate outlook, ICICI Bank CEO and managing director K.V Kamath said: “Let markets decide. I do not know how interest rates are going to behave in the next 7-10 days.” Punjab National Bank CMD K.C Chakrabarty said at present there was no plan to increase interest rates. “Rates are likely to be stable in the near-term,” he said. According to Allahabad Bank CMD A.C Mahajan, the bank would not increase interest rates in the near future. However, if there was another CRR hike, then the bank would take a view, he added. The bankers’ comments ease the concerns that banks may increase the lending rates after the RBI hiked CRR to 8.25 per cent in three tranches, which would drain the system by nearly Rs 27,000 crore. Review derivative portfolio, banks told
Amid notional losses being reported by various banks in their dealing in forex derivatives, finance minister P Chidambaram today asked banks to review their derivative portfolio and make them understandable to customers. "I have asked banks to review derivatives portfolio and make sure that customers understand it (derivative product)," Chidambaram told reporters after meeting chiefs of public sector banks here. Meanwhile, the accounting standard regulators Indian Chartered Accountants of India (ICAI) asked companies to report losses in forex derivatives for the current fiscal. ‘Swap moneylenders' loans to farmers’
To pull out farmers from the clutches of moneylenders, finance minister P Chidambaram today asked PSU banks to swap such lendings for bank loans. He also asked the bankers to see that their branches in villages and semi-urban areas lend at concessional rates to the poor engaged in small occupations, like the barbers and the washermen. "Chairpersons (of PSU banks) were told that banks must concentrate on debt swap. They must take over moneylenders loans to farmers and swap them for bank loans," Chidambaram told reporters after the meeting.— PTI |
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Kamath asks industry to ‘introspect’
New Delhi, May 1 "The government is sending a clear signal. We have to respond," he said when asked to comment on Prime Minister Manmohan Singh's veiled warning against cartelisation. Kamath said his predecessor Sunil Bharti Mittal has already said that CII abhors cartelisation. "That's our response." However, industry must respond to the call given by the government to join it in the fight against inflation, he said at CII press conference today. The Prime Minister, while addressing the CII annual session yesterday, had said the industry, "particularly in sectors characterised by significant market power in the hands of a few producers have a societal obligation to assist the government in moderating inflationary expectations". Few sectors like cement and steel are facing charges of forming cartels to make profits from high demand. Steel prices have gone up by close to 50 per cent in the past 12 months forcing the government to take several administrative and fiscal measures to rein in prices. — PTI
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Acute shortage of MS wire rods in region
Chandigarh, May 1 The main steel producers in the country have scaled up the production of TMT bars, used by the infrastructure industry, while bringing down the production of the MS wire rods. This has adversely affected the fastener and machine tools industry in the region, which is facing an acute shortage of the raw material. Sources in the industry informed TNS that even as the prices of steel were hitting the roof, they have been facing an acute shortage of MS wire rods since December 2007. They say that Steel Authority of India (SAIL) has not released any fresh stocks of MS wire rods in the market for almost four months. As a result, manufacturing of nuts, bolts, rivets, machine screws, fencing wires and other general engineering application tools has been hit. A.L. Aggarwal, president of Chandigarh Industrial Fasteners Association, said production has been undermined for about 300 units in the city, besides hundreds of industrial units in Ludhiana, engaged in the manufacture of the above mentioned goods. The worst hit are the exporters, who said that because of the shortage they are unable to meet their export commitments on time. Anil Kumar Sood, a leading exporter of engineering goods from Ludhiana and director of Kumar Industries, said, “ On one hand, prices of MS wire rods have gone up by almost Rs 10,000 per metric ton since November 2007, while on the other hand there is an acute shortage. This has sharply cut into our profit margins”. Top officials in SAIL, while talking to TNS on the phone, denied that they have stopped the manufacture of MS wire rods. “We have scaled up the production of TMT bars, required for construction, so as to create more availability of steel in the rural areas. Though TMT bars are being given priority, we are producing TMT rods in the electrode quality,” said a top official. With a main producer like SAIL not supplying the MS wire rod in the market, the engineering industry in the region is being forced to procure these from the secondary steel producers at a much higher price. “While the MS wire rod supplied by the main producers, including RINL, is priced at Rs 42,500 per metric ton, the secondary producers are supplying this at Rs 48,000 per metric ton,” said P.D. Sharma, chairman of Apex Chamber of Commerce and Industry.
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New Delhi, May 1 The move by Air India, Jet Airways, Spicejet and Kingfisher comes in view of rise in prices of aviation turbine fuel by over 9 per cent in line with the increase in international crude oil rates. Jet Airways has decided to increase the basic fare of economy and business class tickets by about 10 per cent from Saturday. It will also raise the fuel surcharge by Rs 150 on short-haul routes and Rs 350 on long-haul routes from the same day. SpiceJet hiked fuel surcharge by Rs 150 on short-haul routes and Rs 350 on long-haul routes from today. Air India has decided to raise the basic fare on all routes by 10 per cent and levy a fuel surcharge but has not yet announced the date from which it will be effective. The price of ATF in Mumbai has been hiked by Rs 5,276 per kl to 60,467.58 per kl, an official of Indian Oil Corp, the nation's largest fuel retailer, said.— PTI
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Traders irked over duty on basmati export
Kaithal, May 1 “The worst part is that the government has not even spared rice for which agreements with foreign buyers have already been signed but are yet to be exported,” he lamented. There would now be a spate of disputes with the foreign buyers as to who would bear the burden of latest duty imposed by the Indian government, he added. The government’s step would prove to be harmful for future exports, he said, adding that our biggest competitor, Pakistan, would be a natural beneficiary. Moreover, the process of modernisation of rice manufacturing plants would come to a halt. International players like Buhler and Stake and domestic exporters and rice mill owners, who were spending heavily to modernise their processing plants, would now be forced to retrace their step.
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Cycle industry eyes global market
Ludhiana, May 1 Industrialists from this town are taking an inspiration from China that caters to almost 60 per cent of the global demand. Technological and other quality related improvements could result in a major rise in export of bicycle parts that was only Rs 840 crore last year, said industrialists, who recently visited factories in China to gain knowledge about the practices adopted there. "Demand for Chinese bicycle parts is higher, particularly in developed nations, as they are producing products that suit the weather conditions in other countries. They are primarily using aluminium and we, too, feel that if we shift from steel, we would be able to give a competition to China," said Charanjit Singh Vishwakarma of Vishwakarma Industries. He added that the metal, though more expensive than steel, was a better option as it offered a better finish and was rust resistant. Realising the urgency to increase their share in global markets, industrial bodies are now spreading awareness among entrepreneurs in this direction. "We have already lagged much behind China. If we are to increase demand for our products outside the country, there is no other option than to switch to methodologies that are accepted worldwide."
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Fed cuts rate by 25 bps
Washington, May 1 The Fed, however, kept its options open and nodded to ongoing financial market stress, tight credit and the deepening housing contraction, leaving some market participants guessing rates could still move lower. The central bank's action takes the bellwether federal funds rate target, which banks charge each other for overnight loans, to 2 per cent — the lowest since December 2004. It was the seventh cut in a campaign that has brought the key lending rate down by 3.25 percentage points since mid-September. The Fed also cut the discount rate it charges on direct loans to banks by a matching quarter point. ''The substantial easing of monetary policy to date, combined with ongoing measures to foster market liquidity, should help to promote moderate growth over time and to mitigate risks to economic activity,'' the central bank said.— Reuters |
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Exports up 23 pc in 2007-08
New Delhi, May 1 In the same period of FY'07, imports were valued at $17.13 billion, while exports stood at $12.86 billion. With the global crude oil prices remaining well above the $100 a barrel mark, country's oil imports shot by a whopping 76.6 per cent to $8.63 billion in March 2007-08 from $4.88 billion in the year-ago period. For the fiscal as a whole, imports went up to $235.91 billion against $185.73 billion, showing a year-on-year increase of 27.01 per cent helped by a liberal policy and duty regime. Braving difficulties arising out of the expensive rupee, exports managed to reach a level of $155.51 billion in the last fiscal against $126.41 billion, logging in growth of 23.02 per cent. While the non-oil imports increased by 23.36 per cent to $158.88 billion in 2007-08, the oil imports shot up to $77.03 billion from $56.94 billion. The trade deficit for the year as a whole reached $80.39 billion leaving the policy makers worried. "We are not comfortable at all (with the trade deficit figures). We hope to boost our exports more. But at the moment with the high oil import prices, we have to live with it," commerce secretary Gopal K Pillai said here.
— PTI |
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Adidas to expand network
Chandigarh, May 1 While interacting with the media, he revealed that there was a potential of 30 to 35 per cent growth of the company in northern India. He said that the company was focusing more on the Indian market as in next two to three years India would be flourishing as one of the 12 top markets of the world. |
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Ford to double output in India
Chennai, May 1 Newly appointed Ford president Michael Boneham said the expansion plans in India included increasing production volume of both engines and vehicles along with an earlier announcement this year to invest an additional $500 million in Indian operations. Boneham said: “We would be doubling our capacity from our current production of one lakh car within a couple of years. The engine unit would export its components to other countries in the next two years.” He added that the plant, equipped with advanced manufacturing technology, has a capacity to manufacture up to 1,00,000 vehicles per annum. “At present, the first phase of engine plant production is only for domestic use. Our export business would start in the second and third phase expansion programme of our engine plant,” he said.
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Borrowers of housing and auto loans can heave a sigh of relief as the government and leading bankers have said lending rates were likely to remain stable despite the Reserve Bank’s (RBI) tightening the money supply.
