BRICS has officially launched the New Development Bank at the Russian city of Ufa, where the seventh meeting of the BRICS state heads meeting is taking place. The bank will be headed by its first President, K V Kamath of India. Kamath has told that the new bank will raise money from both internal (within BRICS) and external sources. Fund raising is an important task of the bank as the structure of the new institution is equal contribution from all members. This means that the heavy weight China and the small member – South Africa have to contribute equally. "We will explore resource raising on various markets - hard currency markets and local currency markets,"
The stock market’s steep fall continues in China despite many precautionary measures by the Chinese central bank. Leading index the Shanghai Composite is down by 4.7%, recovering from an 8 % scoop early in the day. The fresh faults are despite stopping of trade in nearly 50% of the listed companies. Earlier, 1476 listed companies have stopped their trading in the exchanges. Hong King's Hang Seng lost 5.8% while the Nikkei of Japan has lost 3.14%. The Indian market that surprisingly withstood the Greek shock on the previous day seems to be deeply affected by the Chinese burst. Mid day, both Sensed and Nifty lost around 1.9%. Sensex and Nifty plunges following the C
China has come out with extraordinary and extreme measures to stop the crash in the equity market. Two new measures that were rare in use were to be deployed to prevent what the Chinese authorities describe as the irrational drop in share prices. The first one–large shareholders are not allowed to sell shares of listed companies. Investors who holds more than 5% share in listed companies are banned from selling those shares for the next six months. Second, in a rare step, the central bank will provide liquidity to support the market. Chinese stocks continued their free fall as the Shanghai Composite Index closed down 5.9 per cent after falling as much as 8 per ce
World’s strictly regulated economy- China is undergoing a rare market experience over the last fifteen days. Its stock market is falling steeply. Most surprising and worrisome is that the market is not obeying government’s effort to block the decline. The Composite Shanghai index has fallen by 1.8% on Tuesday, July 7, reversing the slight gain made on the previous day. China’s stock market has grown by 117% in the last eight months before June. From mid June, the index has fallen by nearly 30 percent. Later, the government has introduced many market stabilization measures but the stock prices scooped down after looking at government signals for one day. C
Greece has intimated a strong No to the European bailout norms with 61.31% votes in favour of it. The sizable majority for ‘no’ to the reforms comes as a shock to the Europe’s creditors and it may give more strength to Syriza to move towards declaring a default and an inevitable exit from Euro. Financial markets in Asia that opens first after the no vote results started jolting to the news though some of them are recovering as trading progresses. Early financial market reports shows Japanese Nikkei index falling by 1.5%, and later recovering. Malaysia’s currency - ringgit fallen sharply against the Dollar. Trade in markets where dependence on FPIs is
As Greece is going through a referendum on the bailout terms suggested by its creditors, the world economy is waiting anxious. What will happen to Greece, the Euro zone and to the world economy if the Greek people say no to the reform measures? Opinion polls indicated that Greeks appear strongly divided over bailout decision. This is despite the hard-line campaign for ‘no’ made by the radical ruling leftist Syriza. Reports are that as the voting hours reaches, there is rising ‘yes’ and a photo finish possibility. This shows that Greek people are quickly losing belief in the economy management capability of the Syriza team. The effects of a no vote wil
The Greek crisis is moving towards a decisive face with more suspense. Fresh opinion polls for Sunday’s referendum indicate people airing ‘yes’ to bailout and Euro is increasing. This is despite Prime Minister Alexis Tsipras’ call for ‘No’ to the EU Plan and his description of EU creditors as blackmailers. A victory for ‘yes’ will be interpreted as a vote of no- confidence in the ruling Syriza party’s ability to manage the economy. In another development, the IMF has warned that Greece’s debt over the next three years is bigger and Athens need around €60 bn to overcome its debt problem. The IMF who uses the gen
China has introduced a new security law that adds internet under the sovereign control of the state. As per the law, internet is a matter of sovereignty and security and they should be “secure and controllable”. The new law becomes a model for state controlled internet. The National security law of China, passed by the top legislature on Wednesday extends from military to economy. It also brings space exploration and cyber security under the concern of security establishment. The new policy comes at the time of China’s increased aggressiveness in the East China Sea. In the internet world, many secretive hacking and invasions into the US military sites were
The fifty founding members of the AIIB have signed a historical Articles of Agreement (AoA) on important functional aspects, including the governing structure of the Asian Infrastructure Investment Bank. Articles of Agreement of the AIIB looks close to that of the twenty-four Articles of Agreement of the IMF that was signed seventy years back. China, the lead state has a veto power and 26% vote and 30 % capital contribution to the AIIB. It seems that China in the AIIB, is like the US in the IMF. India expectedly got the second largest voting power and capital share. India’s shareholding is 8.52% with a voting right of 7.5%. It was estimated that India’s vot
Greek PM Alexis Tsipras has announced a holiday for banks on the much anxious Monday and put capital controls. Announcing the decision on the TV, the Socialist Party leader has blamed EU for the current confusion in his economy. Capital control means restriction of taking away money to outside the country. Greek problems are now graduated to the next phase where banks may face liquidity crisis. Panic withdrawal will dry resources of the banks. Most importantly, the problem will get worsened from minute to minute. The issue of debt repayment to IMF and EU can be solved through discussion and Athens will get even weeks for it. On the other hand, the liquidity crisis in the ban
Dictionary on Indian Economy
- Logic of withdrawing Rs 1000 and Rs 500 notes
- Why the GST reform is transformational?
- Raghuram Rajan: The Gladiator returns to Chicago
- Good intention but poor thinking - what troubles demonetization?
- India Black Money Report: CBI underestimates black money at Rs 25 lakh crore
- High interest rate rather than inflation is the macroeconomic problem for India right now
- Japan’s first trade deficit in 30 years is part of the Global Shift
- Why we need an emergency monetization plan as well?
- Arvind Subramanian rocks with 'Chakravyuha' in Economic Survey
- NREGS: give respect to the tax payer’s money