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RBI pegs growth at 7.7 per cent
May infuse more liquidity
Rupee at record low
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Sensex tumbles
Inflation eases to 11.07 pc
Overall cap on ECB raised to $35 b
FIIs’ stock lending activity to end, says FM
Now, retail chains on laying-off spree
DD’s DTH service under scanner
‘Dubai hit hard by financial turmoil’
Goldman Sachs to cut 3,300 jobs
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RBI pegs growth at 7.7 per cent
Mumbai, October 23 "The median forecast of real GDP growth for 2008-09 was 7.7 per cent in the fifth round of survey (September 2008) compared to 7.9 per cent in the previous round (June 2008)," RBI said in its mid-term review of macroeconomic and monetary developments. The projections are based on the results of professional forecasters survey conducted by the Reserve Bank in 2008 which suggested further moderation in economic activity for 2008-09 on the whole. The sectoral growth rate for agriculture and services were, however, kept unchanged. However, the forecast for industry was placed at 7 per cent as compared to 7.5 per cent in the previous round. The annual growth rate of imports was expected to 27.2 per cent as compared to 29.5 per cent, the RBI said. Meanwhile, the RBI said today it would continue to take pre-emptive action to contain excess volatility in the domestic financial market, in view of the continuing global crisis to maintain price stability and inflationary expectations. The apex bank said it was committed to maintain financial stability and active and flexible liquidity management by using all policy instruments, referring to various measures it had taken to alleviatae the recent transient pressures on the domestic financial markets which are related largely to external developments. It said the recent episode of global financial market distress, especially during June-October 2008, raised several issues. It appeared to be a transition from a broad-based cyclical deterioration to the viability of systemically important
financial institutions. ''The financial crisis seems to be spreading across markets, institutions and countries, reflecting problem of contagion'' it said, adding ''it needs to be recognised that there has been a breakdown of trust in inter bank and inter institutional lending.'' RBI said the reversal of such extreme kind of risk perception and full resolution of the crisis would envitably take time.
— Agencies |
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May infuse more liquidity
New Delhi: At a time of steep financial crunch, the RBI is going to unveil the mid-term review of monetary policy tomorrow. After infusing nearly Rs 1 trillion in the credit market the banks have not been enthused and are still holding on to the credit for the fear of liquidity crunch. The banks’ daily borrowing from RBI has dropped to nearly Rs 3,000 crore in past few weeks from an average of Rs 80,000-1,00,000 crore before the crisis started. It is time for the RBI to shape the policy aimed at bringing financial stability and restore confidence in banks, who have nearly stopped lending to individuals and inter-bank borrowers, says an economist. In the review that is expected tomorrow, the RBI could cut the Statutory Liquidity Ratio (SLR) — the amount banks have to keep in government securities — from the current level of 25 per cent to 20-21 per cent, say sources in banking circles. This will ease the money supply with the banks and enable them to dispose more loans to customers. The other task that the RBI will have to attend to is managing the fall of the rupee, say bankers. The rupee has touched a new low of 49.81 in today’s trade on account of heavy demand for dollar by foreign institutions and oil companies. One of the main reason for the drop in the rupee is that the central bank has been intervening heavily in the foreign exchange market to prevent it from breaching key benchmarks thus adding to the pressure, says a forex dealer. The FIIs are dumping the Indian stocks to send money to their home markets which are reeling under credit and cash crunch. This has led to hammering of the rupee, reason forex traders. Another aggressive stance that the RBI is likely to take on Friday is further reduction in Cash Reserve Ratio (CRR), the amount of money that banks have to maintain with the RBI.
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Rupee at record low
Mumbai, October 23 It resumed low at 49.60 per dollar and later recorded the day's high at 49.85 and low at 49.60 per dollar. The rupee plummeted to an all-time low of 49.5 against the dollar on Wednesday, as foreign portfolio investors continued their selling-spree on stock exchanges. However, the RBI today fixed the reference rate for US dollar at Rs 49.79 per unit, up by 50 paise, against yesterday's rate of Rs 49.29 per dollar.
— UNI |
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Hong Kong, October 23 Markets in developing countries, especially those that depend on portfolio flows to balance their current accounts, were abandoned overnight, with almost no one spared from a sharp global slowdown that has pushed crude prices below $70 a barrel and dragged copper prices to a three-year low. The MSCI index of Asia-Pacific stocks outside Japan fell about 5.5 per cent to its lowest since October 2004. The global emerging markets index was down about 4 per cent, near a 4-year low, and its 35 per cent drop so far in October has outpaced the 25 per cent decline on the all-country world index. Japan's Nikkei share average fell 2.5 per cent, though it was down as much as 7 per cent earlier in the session. South Korea's KOSPI index fell 7.5 per cent, led by shares of Samsung Electronics and steel producer Posco. Hong Kong's Hang Seng index fell 3.6 per cent, taking it well below the 14,000 mark and extending losses for the year to beyond 50 per cent. Sweden, NZ cut rates
London: New Zealand and Sweden cut interest rates on Thursday in response to the financial crisis and weak Japanese exports added to fears of global recession. Sweden lowered its key interest rate by 50 basis points and New Zealand cut rates by a record one percentage point and also said more reductions were in the pipeline. The FTSEurofirst 300 index of top European shares shed about 1.5 per cent. US stock futures pointed to modest increases on Wall Street after shares dropped to a five-year low on Wednesday, hit by weak corporate earnings.
— Reuters |
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Sensex tumbles
Mumbai: The Sensex today slipped below the 10,000 level to close at over
two-year low of 9,771.70 points on sustained selling by funds across counters.
The 30-share index finally ended the day at 28-month low of 9,771.70, a fall of
398.20 points or 3.92 per cent, while National Stock Exchange index Nifty also
ended at 28-month low of 2,943.15, lower 122 points, or 3.98 per cent. Dow Jones
Industrial Average overnight plunged over 500 points falling below the crucial
9,000 level, while Nikkei also closed lower by 4 per cent.
— PTI |
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Inflation eases to 11.07 pc
New Delhi, October 23 Finance minister P Chidambaram in a reply to Lok Sabha said, it was expected that the declining trend would continue in the coming months. |
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Overall cap on ECB raised to $35 b
New Delhi, October 23 “Overall limit on ECB has been raised to $35 billion,” economic affairs secretary Ashok Chawla said. The liberalisation comes a day after RBI relaxed ECB norms, allowing companies to bring in $500 million raised abroad under automatic route to India for rupee expenditure. “One of the requirements that RBI has addressed is the issue of rupee liquidity. Our assessment is that there is equal need to address capital flows in terms of dollar. As such government has taken steps to amplify and amend the ECB regulations,” he said. Later, finance minister P Chidambaram said the idea behind relaxation in ECB norms is that those who have raised money in the past in rather restrictive regime and those who would raise money today onwards under the liberalised regime should bring back money into India as early as possible. “Now RBI has allowed those who have raised money abroad to use it either for foreign exchange expenditure or bring it to India for rupee expenditure,” he said.
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FIIs’ stock lending activity to end, says FM
New Delhi, October 23 "SEBI has told them (FIIs) now that it disapproves of lending to offshore entities, and asked them to reverse those transactions. I am told that those transactions are likely to be reversed over the next few days," finance minister P Chidambaram told reporters here. He said the market regulator has found this use of window by FIIs inappropriate and is addressing the issue. Earlier this week, SEBI had said it disapproved stock lending of FIIs to overseas entities and warned of stronger action against such practice, if so needed. SEBI had asked custodians to communicate to their Foreign Institutional Investors (FIIs) the disapproval of SEBI in this regard. SEBI had last week asked FIIs and their agents to provide information on the quantity of participatory notes they have issued to overseas entities which could be used like short sale.
— PTI |
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Now, retail chains on laying-off spree
Chandigarh, October 23 Across all sectors — manufacturing, retail, realty, IT and BPO, banking and financial services, the focus is now on trimming down the employee strength. The region is no different, with the number of employees losing their jobs getting higher day-by-day. The first major lay-off was reported in the region last week, with QuarkCity (the realty arm of Quark India) laying off 500 employees. A number of other employees have since been sent on a prolonged Diwali holiday. Now, the retail sector, too, has begun deceleration of employees in the region. Over the past two weeks, most retail chains in the region have started showing the door to their employees. With high rentals and poor sales in the region, most of these chains —
Subhiksha, 6Ten and Spencers — have now started retrenchment in a major way. After employees with these retail majors were not paid their salaries for almost two months, the companies have now started shunting the agitating employees, rendering them jobless. Investigations made by The Tribune reveal that most of these retailers have also started closing down their stores in various cities in the region. Officially, most of these retail majors still maintain that they are sprucing up their stores and reopening these by the end of the year. The officials in these retail chains also say that they are not closing down operations, rather looking at major expansion in the region. But a visit to any of these stores shows that they are running out of stocks, and customers, too, have started keeping away. The devaluation of the rupee against the dollar and the slowdown in exports of engineering goods, sports goods, textiles, leather and handicrafts, too, has started having its impact, with a lot of persons being given the pink slips in the region. A leading leather goods exporter from Jalandhar, requesting anonymity, said with production being cut by 10-15 per cent because of the slow demand in the US and Europe, they have no alternative than to reduce their employee strength. |
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DD’s DTH service under scanner
New Delhi, October 23 Reports suggest that as a result of lack of interest in marketing the DD Direct Plus’ space to private channels and the under pricing for the others has constantly kept Prasar Bharati dependant on the grants from the government when it could be self- reliant. A recent check carried out at the official level also brought to light that besides low pricing, there is also wastage of transponder space in
comparison to the private DTH operators, which is leading to colossal loss to the government-run organisation. Sources said that while private DTH operators put as many as 15-16 TV channels on one transponder, DD Direct Plus has only 10-11 TV channels on one transponder. It is also learnt that Prasaar Bharati has been asking for Rs 60 lakh from private television channels when the same channels are paying as much as Rs 3 crore as carriage fees to private DTH operators like Dish TV and TataSky. Reports suggest that Prasar Bharati could lose as much as Rs 100 crore in 2008-09 itself due to under-pricing of its carriage fees and under-utilisation of its DTH transponder capacity. Meanwhile, there are another 45-odd channels waiting in the line to be on board the DD DTH. But the officials have been refusing them space and themselves revenue by claiming that only 11-12 channels can go on one transponder.
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‘Dubai hit hard by financial turmoil’
The Pakistan Economy Watch has said that international financial turmoil and receding oil prices have shaken the oil-rich Arab nations with Dubai among the worst hit.
Dubai, known as a safe haven among investors, traditionally relies on realty, tourism and financial sectors that are badly hit due to global recession. It is no longer regarded as financially invincible and its boom is under threat, said Dr Murtaza Mughal, president, Pakistan Economy Watch. Dubai's debt is much more than GDP, which is soaring at an alarming rate creating new financial challenges. The federal and state governments are also keeping critical data secret, which is adding to nervousness of investors.
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Goldman Sachs to cut 3,300 jobs
London, October 23 But its transition from an investment bank to a traditional bank holding company means the Federal Reserve will use its new regulatory authority to limit the bank's risk taking and encourage longer-maturity funding. Analysts expect the New York-based bank to shrink businesses in prime brokerage and securitisation. Goldman Sachs declined to comment. In June, Goldman laid off hundreds of support staff and junior bankers due to slowing markets following a round of cuts in leveraged lending and mortgage securities jobs in
April. — Reuters |
RIL Q2 net up at Rs 4,122 cr South Korean won at 10-yr low Oil rises
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Forecasting moderation in economic activities, the RBI today lowered growth projections to 7.7 per cent for 2008-09.
"The median forecast of real GDP growth for 2008-09 was 7.7 per cent in the fifth round of survey (September 2008) compared to 7.9 per cent in the previous round (June 2008)," RBI said in its mid-term review of macroeconomic and monetary developments.
