The News Review:
- Forex reserves reach US$941b
- Phenomenal growth in forex reserve
- Zimbabwe Cricket union convicted for forex crime
- Japan’s interest rate hike hits local stock market
- RMB interest rate hike ‘highly likely’
- RBI as investor
- The Hindu Business Line
Forex reserves reach US$941b
ä¸åæ¥æ¥ – ä¸åæ¥æ¥ – Jul 15, 2006
1 billion by the end of June this year up 32. 37 per cent from the same period of last year the People’s Bank of China or the central bank said on Friday. In the first six months China’s foreign exchange reserves increased US$122. 2 billion more than the same period of last year the bank said. In June the reserves increased US$16.
Phenomenal growth in forex reserve
Financial Express – Jul 15, 2006
5% rate signal Mumbai July 14 : After facing an acute crunch in March 1991 India’s forex reserve has shown a phenomenal growth in a span of 15 years. The country’s forex reserve which stood at $5. 8 billion at the end of March 1991 has increased to $151. 6 billion by end of March 2006. Further continuing its upward growth for the week ended July 7 2006 the reserve grew by $348 million to end at $163.
Zimbabwe Cricket union convicted for forex crime
Zimbabwejournalists.com – Jul 15, 2006
zimbabwejournalists. Harare regional magistrate Sandra Nhau will pass sentence on Monday. ZC yesterday through representative Anesu Kafesu pleaded guilty to contravening the Exchange Control Act. Prosecutor Mr bi Mabahwana established that on July 14 last year Ishan Sports sold ZC cricket balls for US$95 301. In settling the debt ZC paid £12 000 from their offshore account without authorisation from the central bank.
Japan’s interest rate hike hits local stock market
겨 – Jul 15, 2006
The Ministry of Finance and Economy however said that the impact would not be significant adding that the rate hike could ¡°push some foreign funds out of South Korea which would affect the local stock market but it would also have a positive impact on the local forex market. ¡± A more daunting challenge for the South Korean economy is the rise in energy prices not Japan’s monetary policy another expert said. ¡°Japan’s interest rate hike is not big enough to affect our economy immediately. What we have to brace for is the yen’s appreciation coupled with higher crude oil prices¡± said Lee Hyun-seok executive official of the Korean Chamber of Commerce and Industry a business lobbying group. For many exporters the rate hike in the neighboring country is welcome news as they see it leading to the yen’s appreciation thus boosting the price competitiveness of South Korean exports at a time when domestic companies are competing with Japanese rivals in almost every area.
RMB interest rate hike ‘highly likely’
ä¸åæ¥æ¥ – ä¸åæ¥æ¥ – Jul 15, 2006
5 billion in June according to figures released by the Ministry of Commerce. “The ballooning foreign exchange reserve is a major factor behind the dynamic growth of the money supply” said Li Yongsen an economist with Renmin University of China. “It is likely that the central bank may soon take measures to mop the excessive liquidity in the market as the high growth of forex reserves is unlikely to fall” Li said. “The measures may include an interest rate rise or the issue of more central bank bills” the economist said. In a bid to curb credit and investment growth the central bank raised the one-year benchmark lending rate by 27 base points to 5. 85 per cent on April 27. It raised the required reserve ratios of banks by half a percentage point to 8 per cent last month which took effect earlier this month.
RBI as investor
Rediff – Jul 15, 2006
Among other things this would mean focusing less on the safety of its money (the traditional RBI concern) and more on returns. The suggestion was overdue – because of the poor returns that India has got so far on its forex reserves and because the reserves (at over $160 billion) are more than external debt ($125 billion) by a comfortable margin. The reserves have trebled in the past four years even as the level of debt has increased only marginally so the way to handle these reserves has to change. The question is how to switch to investment mode. Singapore does it through specially created investment arms (like Temasek) that function like any private sector asset management company. Should India do the same or is there a strategic angle also to keep in mind? Remember that NGC Videsh is mulling the option of investing $3 billion to buy a 5 per cent stake in Rosneft the Russian energy giant that is doing a public issue.
The Hindu Business Line
Hindu Business Line – Jul 16, 2006
CCL Products is relatively insulated from the vagaries of the coffee price cycle as it maintains low inventory levels. Prices of its products tend to move in tandem with prices of coffee beans the raw material. However the company remains exposed to fluctuations in the forex market as it derives about 95 per cent of its revenues from export of instant coffee to the European Union Russia Japan and the US. Depreciation of the major currencies against the rupee tempers its realisations. With its foray into the freeze-dried coffee CCL Products has entered the higher value-add instant coffee segment. Though margins in the spray-dried coffee segment are likely to stabilise at current levels better realisations in the freeze-dried coffee business are expected to enhance its margins. Capacity expansion Capacity appears to be the stumbling block to its growth prospects as CCL Products’ utilisation levels are in excess of the installed capacity.