Monthly Archives: November 2011

Brazil’s central bank cuts interest rates by 50 basis points to 11 per cent, as expected. Here’s the (very short) statement:

Continuing the process of adjusting monetary conditions, the central bank’s monetary policy committee (Copom) decided unanimously to reduce the Selic to 11 per cent, without bias. The Copom understands that by timely mitigating the effects of a more restrictive global environment, a moderate adjustment in the base rate is consistent with the convergence of the inflation scenario with the target in 2012.

Call it foresight, or simply good luck, but Brazil’s decision to start slashing interest rates back in August seems to have been the right move after all.

Many thought the bank’s president Alexandre Tombini (left) was mad (or at least under strict orders from the president) when he kicked off an easing cycle on August 31, apparently oblivious to the fact that annual inflation was rising above the 6.5 per cent limit of the target range. Read more

Voting shares of Usinas Siderurgicas de Minas Gerais, Brazil’s largest flat steel producer, fell to their lowest in two years this week after Italian-Argentine rival, Technint, bought a stake in the company.

But should smaller shareholders feel aggrieved? Read more

Central and eastern Europe had its best Wednesday in a very long time as the world’s largest central banks announced a co-ordinated move to boost liquidity in the global financial system and China moved to ease monetary policy. The effect on the region was immediate and aggressive with bourses in Russia, Hungary and Poland jumping more than 4 per cent.

However it’s not at all clear how long this rally will last. Have the world’s central banks simply bought time and is a real solution to the crisis still painfully lacking? Read more

Desperate times call for desperate but also, frankly, practical measures.

Since the Indian government has been unable to divest itself of $7.7bn in equity in its listed state-controlled companies, it is considering having 26 of those companies buy back shares from the government to pare away at its fiscal deficit. Read more

Poland’s economy grew by an unexpectedly strong 4.2 per cent in the year to the third quarter, compared to a market consensus of 4 per cent. It’s the latest in a series of better than expected economic news and it sent the zloty rising sharply against the dollar and the euro. Read more

Wednesday should have been a great day for India’s largest pharmaceutical company, Ranbaxy Laboratories. After all, it is one of two companies that, come Thursday, will be allowed to sell a generic version of Lipitor, Pfizer’s blockbuster anti-cholesterol drug.

Instead, shares in Ranbaxy, which had global sales of nearly $1.9bn last year, fell 3.88 per cent on news that the FDA had yet to award the company approval to market Lipitor, the best-selling drug in the pharma industry’s history, in the US. Read more

Once again Peruvian protesters have halted work on a major mining project – this time Newmont Mining Corp’s $4.8bn Conga gold mine.

After a week of protests which shut down the province of Cajamarca and saw at least 20 people injured, the company said it had suspended construction at the request of the government “in order to restore peace”. Read more

It was the rate cut Thailand had to have, according to economists who almost unanimously predicted the country’s central bank would end its two-year tightening streak on Wednesday and ease monetary policy to help counter the devastating impact of floods that began in July. Read more

Given the severe political, as well as economic, constraints within which he is forced to operate, Tendai Biti, Zimbabwe’s finance minister (pictured), did well to present a workmanlike, balanced 2012 budget to parliament last week.

Trying to secure consensus in a coalition administration in continuous electioneering mode is a near-impossible task, especially when it comes to the murky area of revenues from the country’s controversial Marange diamond fields. Read more

Well, we had a week’s warning and now it’s begun in earnest. China is in loosening mode. Not only that: it wants the world to know it. Read more

* S&P rates China banks higher than US rivals

* China cuts Reserve Requirement Ratio

* Qatar raises $5bn from dollar bonds in first global sale in 2 years

* Indian GDP growth drops below 7% Read more

The People’s Bank of China has cut its reserve requirement ratio – the amount of cash commercial banks must park with the central bank – by 50bps.

It’s the first major piece of monetary loosening in almost 3 years, although it was prefigured by last week’s cut in RRRs at some rural banks. It’ll likely be taken as a positive for the markets, but it does make you wonder how worried policymakers are getting about growth. PMI on Thursday should shed some light.

Shipping costs between China and Europe are plummeting as demand from the beleaguered eurozone contracts sharply. And while falling demand might not be much of a surprise the speed of the drop in transport costs is an eyebrow raiser – it has slumped by 39 per cent in just under 3 months, according to Bloomberg.

A worrying indicator of what’s to come. Read more

By S.D. Shibulal, CEO of Infosys

A lot has changed since the Bric acronym was coined. Ten years and two economic recessions later, the centre of gravity of global economic activity has shifted, new markets have emerged and the global economy is more integrated than ever before. Advances in technology are redefining the way we connect and interact with our consumers. Sustainable consumption has gained centre-stage. The world as we know it today is quite different from what it was a decade ago.

But formidable challenges remain, notably in closing the gap between rich and poor by promoting inclusive economic growth. Read more

Wednesday’s top picks from the beyondbrics team: the “beginning of the end” for Syria’s regime; why Poland’s appeal for German leadership needs to be heeded; why Chinese fraud might mean great opportunity; and the death of the elusive leader of the Maoist insurgency that has claimed over 10,000 lives over the last decade in India. Read more

The new normal is here. India’s economy grew by 6.9 per cent in the quarter ending in September compared with the same quarter last year, the slowest rate in more than two years, the ministry for statistics said on Wednesday. The rate fell from 7.7 per cent in the previous quarter.

The slowdown was no great surprise, now – though it would have come as a mighty shock back in April, when growth for the fiscal year ending March 2012 was expected to come in at 9 per cent. Read more

The Bank of Thailand has cut interest rates by 25bps, bringing the benchmark rate down to 3.25 per cent. That’s a bit less of a cut than had been expected by a number of analysts, who saw looser policy as one way to boost growth after the country was hit by devastating floods.

India’s GDP growth for the quarter ending in September fell to 6.9 per cent, the lowest in over two years, down from 7.7 per cent the previous quarter, according to data released by the ministry for statistics.

The sub-7 per cent number was expected, analysts told beyondbrics, and could herald the beginning of the Indian economy’s “new normal”.

* S&P rates China banks higher than US rivals

* Britain braced for ‘debt storm’

* Qatar raises $5bn from dollar bonds in first global sale in 2 years

* IMF raises alarm on capital flows Read more