ECR-Assignment 5 - Ramya R – PGDMB12/111 August 27, 2012

MCX gold futures touch new high on global bounce Gold futures in India climbed to all-time high of Rs. 31029 per 10 grams, tracking a strong trend in the overseas markets. Rising demand for spot gold in the domestic market for the upcoming festival-cum-wedding season also pushed gold futures to a record high. Gold for December delivery rose by Rs. 352, or 1.2%, to a new record of Rs. 31,029 per 10 grams at the Multi Commodity Exchange (MCX). Gold futures for October settlement gained Rs. 382, or 1.3%, to Rs. 30,699 per 10 grams. Gold futures for December delivery were up US$1 to US$1,644.20 an ounce in electronic trade. Spanish request for aid won't prompt downgrade: Fitch Fitch downgraded Spain to 'BBB' from 'A' in June, reflecting its re-assessment of the likely cost of bank restructuring and the fiscal and economic prospects. The rating remains on Negative Outlook. SBI’s Chaudhuri wants to do away with CRR The Chairman of the country’s largest lender, State Bank of India (SBI), has strongl y proposed phasing out of Cash Reserve Ratio (CRR), CRR is the amount of funds that the banks have to keep with the RBI. Currently, CRR stands at 4.75% of the bank’s total deposits. According to Chaudhuri, CRR was causing losses to the banking sector to the tune of Rs. 210bn. If that money was released in the market, then production of the country in a lot of sectors would increase, he said. If the central bank does not do away with the CRR because of inflationary concerns, it could pay interest on it to the banks or could raise the SLR by 4.75%. India’s oil import bill was at Rs. 7.26 tn in FY12 Increase in refining throughput has reduced import dependency on petroleum products and the country has exported petroleum products worth 2, 84,643/- crore during 2011-12. Import Bill from 2009-10 to 2011-12 (Prov.) 2009-10 2010-11 2011-12 (Prov.) Quantity Value Quantity Value Quantity Value (MMT) (Rs (MMT) (Rs (MMT) (Rs crore) crore) crore) (A) Crude oil 159.3 375277 163.6 455276 171.7 672220 import (B) Product 14.7 33800 16.8 52106 15.0 54166 import Total 174.0 409077 180.4 507382 186.7 726386 Import(A+B) (C) Total 51.0 144229 59.1 196862 60.8 284643 product Export Net Import (A+B) – (C) 123.0 264848 121.3 310520 125.9 441743

RBI calls for FDI in retail, insurance, aviation, infrastructure FDI in retail leads to increased competition and evidence suggested that increased competition in retail space results in lower prices, which improves consumer welfare, benefiting low-income

10%. Provisional annual inflation rate based on all-India general CPI (Combined) for July 2012 on a point-to-point basis stood at 9.9 and 121.6% from a year earlier in the second quarter. PBOC launches biggest weekly liquidity injection in 7 months The People's Bank of China (PBOC) injected a net CNY278 billion (US$43. Urban and Combined for June 2012 stood at 9. India's inflation.1% in 2012.Ramya R – PGDMB12/111 August 27. 10. nearly three-year low.6. The CBO also said that unemployment would jump to around 9% in the second half of 2013 from its current 8. The corresponding inflation rates for Rural and Urban areas stood at 9. The CBO reiterated that the US economy will go into a recession next year if the Bush-era tax cuts expire and automatic spending cuts take effect.ECR-Assignment 5 . while also easing some of the overseas borrowing rules. India’s monsoon deficit narrows to 14% below average According to the India Meteorological Department (IMD). Foreign investors will also be allowed to invest up to US$5bn in the credit-enhanced rupee bonds. dropped to 6. but GDP will fall by 0.4. 119. as measured by the benchmark wholesale price index (WPI). India's CPI dips below 10% in July All-India provisional General (all groups) CPI numbers of July 2012 for Rural. CBO warns of US GDP contraction citing 'fiscal cliff' The US Congressional Budget Office (CBO) has warned that the US GDP will contract in 2013 due to the so-called “fiscal cliff”.86%. monsoon rain deficit in India narrowed to 14% below average in the season. which would reduce companies' financing costs. Inflation rates (final) for Rural. only infrastructure and infrastructure finance companies could issue rupee-denominated bonds with guarantees from multilateral or regional financial institutions.9 billion) into the money market this week through its open-market operations as it stepped up efforts to ease liquidity conditions and bolster a slowing economy.5% in 2013 under the fiscal cliff. the CBO had said that US GDP growth would be 0. although the overall corporate bond limit will remain at US$45bn.87% in June. Govt eases borrowing norms to lower borrowing costs The Government has allowed Indian corporate to issue rupee bonds that are guaranteed from offshore entities.3% in case the proposed tax increases and spending cuts materialize. The Chinese central bank's liquidity injection could lower local money market rates. Previously. The CBO predicts that the US economy will grow by 2. This was the biggest weekly liquidity injection in seven months.44% and 9. down from the first quarter's 8. The central bank said FDI in retail may be particularly helpful in improving supply chain management through greater investment in backend infrastructure. respectively.65%.76% and 10.1% growth and the slowest pace since the first quarter of 2009. Urban and Combined stood at 122. including cold storage for farm and poultry products.93%. In its new report.5% between the fourth quarter of 2012 and the fourth quarter of 2013 under the fiscal cliff scenario. . Earlier. The minimum maturity of bonds issued by the domestic units has been reduced to three years from seven years. 2012 households the most. respectively. China said last month that its economy grew 7. it says that the underlying strength of the US economy is weaker. while it’s deficient or scanty in remaining 45%. respectively. Rain was normal or excess in 55% of the country.