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July 27 (Reuters) – India’s central bank said on Tuesday consumer price inflation remains at elevated levels and demand-side pressures need to be contained.
At its quarterly policy review, the bank also said real policy rates are not consistent with strong economic growth. (Reporting by Jeanette Rodrigues; editing by Surojit Gupta)
July 6 (Reuters) – Russia’s International Industrial Bank (IIB) restructured 32 billion rouble ($1 billion) debt to the central bank, easing concerns on its ability to repay a 200 million euro Eurobond, business papers reported on Tuesday.
Industrial magnate Sergei Pugachev, the bank’s controlling shareholder, pledged his stakes in two shipyards as collateral for the central bank’s loans, and may secure an additional $400-600 million in loans from state-controlled lender VTB (VTBR.MM), Vedomosti reported, citing banking sources.
“The loan (to the c.bank) has been rescheduled to the middle of January 2011, the bank should pledge collateral in two weeks,” a source close to the central bank told Kommersant, another business daily.
Reuters could not reach IIB for immediate comment.
IIB [IIBNK.UL], also known as MezhPromBank, is ranked among Russia’s top 30 in terms of assets, but the main part of its business is connected to Pugachev’s shipbuilding-to-mining empire.
The bank needs to repay the Eurobond on July 6 and a source close to the bank has earlier said it plans to pay the debt from own funds [ID:nLDE65F1I6] ($1=31.17 Rouble) (Reporting by Dmitry Sergeyev; Editing by Anshuman Daga)
July 5 (Reuters) – Turkey’s central bank injected one billion lira ($640 million) into the market in a one-week repo auction on Monday at a fixed simple rate of 7 percent.
Total bids were 2.8 billion lira and the repo will mature on July 12, central bank data showed CBTG. ($1=1.5660 lira)
June 25 (Reuters) – Turkey’s central bank injected two billion lira ($1.27 billion) into the market in a one-week repo auction on Friday at a fixed average simple rate of 7 percent.
Total bids were 8.145 billion lira and the repo will mature on July 2, central bank data showed CBTG. ($1=1.5810 lira)
KUALA LUMPUR, June 25 (Reuters) – Malaysia’s central bank has ordered sharia banks to give borrowers a rebate for early settlement under new rules designed to prevent legal disputes and restore confidence in Islamic financing contracts.
The ruling from Bank Negara’s sharia advisers will standardise the use of rebate, or ibrar, in bai bithaman ajil and murabaha financing contracts which are widely used in Malaysia’s $95 billion Islamic finance market.
Unlike conventional loans which levy interest on the accrued portion upon default, Islamic contracts are often asset sales where banks are entitled to the entire sum based on the whole tenure of the contract, regardless of when default occurs.
In practice, Islamic banks can grant a rebate to waive their right to the unaccrued sum but such discounts are discretionary, resulting in legal disputes. If a rebate is not given, sharia financing contracts can be more costly than conventional loans.
“In line with the need to safeguard maslahah (public interest) and to ensure justice to the financiers and customers, Islamic banking institutions are obliged to grant ibrar to customers for early settlement of financing based on buy and sell contracts,” the ruling said.
The ruling, effective June 7, requires the right of rebate to be specified in contracts. The method of computing the rebate will be determined by the central bank.
Ibrar is derived from the traditional Islamic notion of loans where charitable financing is extended to the poor and the lender writes off the debt if the borrower can’t afford to repay.
Some practitioners said the ruling would resolve uncertainties relating to the use of ibrar but was difficult to reconcile with the sharia’s tenets.
“It throws into doubt the legal principle which has traditionally been that ibrar cannot be compelled because it is at the discretion of the creditor,” said Mohamad Illiayas, an Islamic banking lawyer in Kuala Lumpur.
“In murabaha, bai bithaman ajil and bai ina contracts the price is one of five critical elements, the absence of which, or uncertainty or ambiguity with regard to any of the five elements would render a contract void.”
Figures on the value of bai bithaman contracts are hard to come by but Malayan Banking (MBBM.KL) had earlier estimated that these contracts, along with bai inah and bai al dayn (debt trading contract) account for over 80 percent of the Islamic banking portfolio in Malaysia.
Islamic banking assets in Malaysia, which has the world’s largest bond market, totalled about $95 billion or 19.6 percent of total banking system assets as at December 2009, according to central bank data.
Figures were not available on the number of Islamic financing defaults in Malaysia. (Click on [ID:nISLAMIC] for more Islamic finance stories and ISLAMIC for a speed guide) (Editing by Kim Coghill)
June 24 (Reuters) – Turkey’s central bank said on Thursday it would buy government bonds worth 3 billion lira ($1.91 billion) in the rest of 2010, after buying 5 billion lira-worth bonds in auctions that started late last year.
The central bank will continue to hold auctions in which the bank buys 100 million lira-worth of bonds on Wednesday and Friday every week to buy government bonds until July 30 and then weekly auctions until Dec 22, the statement said.
June 17 (Reuters) – India’s domestic inflation is a bigger concern than other global factors, Reserve Bank of India Deputy Governor K.C. Chakrabarty said on Thursday.
“As of today inflation is definitely a cause of worry. You see international situation is not that volatile, it has some adverse implications. But I think more than that domestic inflation is definitely a matter of worry,” Chakrabarty told reporters on the sidelines of an industry event.
“Double digit inflation is not an easy thing,” he said.
India’s headline inflation unexpectedly accelerated in May, heightening expectations the Reserve Bank of India (RBI) would raise rates before its scheduled July review despite concerns over Europe’s debt crisis. [ID:nSGE65D0E6] (Reporting by Suvashree Dey Choudhury and Neha D’silva)
June 17 (Reuters) – India’s domestic inflation is a bigger concern than other global factors, Reserve Bank of India Deputy Governor K.C. Chakrabarty said on Thursday. (Reporting by Suvashree Dey Choudhury and Neha D’silva)
June 15 (Reuters) – A top Australian central banker on Tuesday said debt problems in the euro zone were worrying as it was not clear they could be solved anytime soon, though strength in Asia would still support the Australian economy.
Reserve Bank of Australia (RBA) Deputy Governor Ric Battellino said some moderation in growth in China would be no bad thing given how fast the economy had been running and could even help Australia manage its mining boom.
“I think, the challenge for the Australian economy for the next few years is going to be how to accommodate this mining boom that’s going on,” Battellino said in response to questions after giving a speech on debt. (Reporting by Wayne Cole)
WARSAW, April 14 (Reuters) – Poland should name the new head of its central bank without unnecessary delays, the bank’s acting governor, Piotr Wiesiolek, was quoted on Wednesday as saying.
“The current state of the economy and the central bank’s forecasts of its growth, as well as the observed trend of inflation, signal there is no need — in my view — for a rate reaction of the MPC in the nearest time,” Wiesiolek also told Rzeczpospolita daily in an interview. (Writing by Gabriela Baczynska)
MANAMA, April 11 (Reuters) – Bahrain’s central bank on Sunday said it was unaware of the identity of the bidder for a 25-percent stake in the country’s biggest lender, Ahli United Bank AUBB.BH (AUBK.KW), casting further doubts on the sale.
Financials
AUB said last week that Kuwaiti investment firm Tamdeen (TAMK.KW) plus other, unnamed shareholders had agreed to sell 25 percent in the Bahraini bank to an undisclosed buyer from the Gulf Arab region. “The CBB is aware but does not have the details, nor the name of the buyer,” a central bank spokeswoman said in a written statement to Reuters.
“Also we did not receive the request (to approve the stake sale) yet,” she said.
Shares in AUB initially surged on the bid news but fell 9 percent on Thursday as investors pulled back from the deal dogged by questions in a region reknown for lacking transparency in merger and acquisitions. [ID:nLDE6371VB]
(Reporting by Frederik Richter; Editing by Amran Abocar)
JERUSALEM, March 28 (Reuters) – The Bank of Israel said on Sunday that it raised short-term borrowing costs for a fourth time since last August due to high inflation expectations and signs the economic recovery was becoming “more firmly based”.
But the central bank said that despite its quarter-point increase in the key lending rate to 1.5 percent, monetary policy remained “expansionary”.
It noted that inflation expectations for the next 12 months stand at 2.6 percent, near the upper limit of an official 1-3 percent annual target.
The bank said annual inflation, at a 3.6 percent rate in February, should fall below 3 percent next month. (Reporting by Steven Scheer, editing by Will Waterman)
BEIJING (Reuters) – China will continue to implement a relaxed monetary policy and keep sufficient liquidity in the banking system, the People’s Bank of China said on Sunday.
The statement appeared to be the central bank’s response to new data released on Saturday, which showed new yuan loans and money supply growth both surged to record highs in March.
“We must continue with macro-economic controls set by the central party committee and state council, implement a moderately relaxed monetary policy, maintain continuity and stability of monetary policy,” the bank said in a statement after a routine meeting to review economic performance in first quarter.
“We must maintain liquidity in the banking system, and ensure that monetary supply is sufficient to meet the needs of economic development.
Banks extended 1.89 trillion yuan ($276.6 billion) in local currency-denominated loans in March, bringing the total for the first quarter to 4.58 trillion yuan — nearing the government’s full-year target of at least 5 trillion yuan.
That helped lift annual growth in the broad M2 measure of money supply to a record 25.5 percent in March, up from 20.5 percent in February and easily exceeding economists’ expectations of a 21.
“Give more support to the agricultural sector, small and medium enterprises and other weak links, concretely resolve some financing difficulties faced by companies, strictly control lending to high-polluting, high-energy consuming industries and to those with over-capacity,” the bank added.
Smaller and private firms struggled after the Chinese authorities clamped down on lending well over a year ago. They have not benefited much from the recent relaxation since banks view them as more risky, given the global financial crisis.
Critics fear that China’s stimulus measures to combat the crisis have given a boost to local pet projects, which in the long run could contribute to China’s industrial overcapacity and environmental degradation.
(Reporting by Lucy Hornby and Zhou Xin; Editing by Kazunori Takada)
KUWAIT, April 12 (Reuters) – Kuwait’s central bank said it would reduce its benchmark discount rate by 25 basis points to 3.5 percent from Monday to reduce the cost of funding and catalyse the local economy, the state news agency reported.
“The decision to cut the discount rate at the central bank of Kuwait contributes another dose to push the wheel of local economic activity through cutting the cost os finance,” Sheikh Salem Abdul-Aziz al-Sabah said, according to KUNA.
The move coincides with the enactment of a state support package for the financial sector, Sheikh Salem said.
(Writing by Inal Ersan; Editing by Daliah Merzaban)
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