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Showing posts from July 27, 2019

RBI Guv Wary of Trade Wars, Backs High Forex Reserves

Reserve Bank of India Governor Shaktikanta Das has expressed concern over the impact of stressed trade negotiations and rising geopolitical tensions on global economy while backing the building up of forex reserves by emerging economies as safeguard against global contagion. The balance in global economic order has already seen marks of stress with low interest rate policies followed by advanced economies over a period. “International coordination has become somewhat weaker in the very recent years. Many advanced economies have been pursuing low interest rate policies for long, perhaps without adequate recognition of their adverse impacts,” Das said. “Solutions are turning more difficult to come by as the global economy seems to be moving into a new and unsettling phase in an environment of stressed trade negotiations, rising geopolitical confrontation, limited policy space and high debt levels in several economies. General government debt of advanced economies as a group has surpasse…

Sebi brings non-agri commodities under staggered delivery contracts

Market regulator, the Securities and Exchange Board of India (Sebi), has expanded the horizon of all compulsory delivery contracts under staggered delivery, a move that aims to reduce price manipulation and improve liquidity on commodity exchanges. Sebi has also cut the minimum staggered delivery period to five days from the existing 10 days, leaving the discretion of fixing the higher number of days on the concerned exchange, depending upon the history of the relevant commodity. In a circular issued on Friday, Sebi said, “All compulsory delivery commodity futures contracts (agriculture as well as non-agriculture commodities) shall have a staggered delivery period. The minimum staggered delivery period should be five working days” Staggered delivery period is the period beginning few working days prior to expiry of any contract and ending with expiry, during which sellers / buyers having open position may submit an intention to give / take delivery. The markets regulator has been cons…

Sebi eases rules for new exchanges to provide incentives under LES

Under the scheme, brokers and other intermediaries are given incentives for a specified period to bring in liquidity and generate investor interest in securities, which have limited trading activityMarkets watchdog Sebi on Friday eased the conditions for exchanges to provide incentives under liquidity enhancement schemes (LES) in the first five years of operation. Under the scheme, brokers and other market intermediaries are given incentives for a specified period of time to bring in liquidity and generate investor interest in securities, which have limited trading activity. The move comes after the regulator noted that "an exchange in early years of its formation or commencement of business may not be able to generate profits or have free reserves from business operations". Laying down the conditions for such exchanges, Sebi in a circular said the yearly incentive that an exchange can earmark for LES will not exceed 25 per cent of its audited net-worth as on the last day of…

Uncertain times ahead, EMs lack safety net: RBI governor Shaktikanta Das

The general government debt of AEs as a group has surpassed 100 per cent of gross domestic product (GDP), whereas the fiscal space is also constrained in many of these countries The global economy is moving into a “new and unsettling phase” where “solutions are turning more difficult to come by” in an environment of stressed trade negotiations, rising geopolitical confrontation, and limited policy space and high debt levels in several economies, Reserve Bank of India (RBI) Governor Shaktikanta Das said on Friday. This has a negative connotation for emerging markets (EMs), as these are building up excessive leverage because of the low interest rates in the advanced economies (AEs). This is especially true in the absence of a strong global safety net such as currency swap arrangements between the AEs and the EMs. The general government debt of AEs as a group has surpassed 100 per cent of gross domestic product (GDP), whereas the fiscal space is also constrained in many of these countrie…