India’s central bank cut its key short-term lending rate yesterday and announced other monetary steps to spur economic growth as it moved to counter the impact of the global financial crisis.
The Reserve Bank of India, citing “unsettled” financial conditions, reduced its key short-term lending rate, the repo, by 50 basis points to ease a credit crunch and inject liquidity into financial markets. The repo is the rate at which it lends funds to commercial banks.
The bank also announced on its Web site it was cutting the amount of cash commercial banks must hold in reserve, easing the so-called cash reserve ratio to 6.5 percent from 5.5 percent — pumping billions of dollars into the financial system.
And it said it was cutting the statutory reserve ratio — the proportion of deposits banks must hold in government securities — to 24 percent from 25 percent to boost liquidity.
Banks around the world have been cutting rates to spur growth, with the US Federal Reserve on Wednesday slashing its main policy rate to 1 percent and China also lowering key interest rates.
The Bank of Japan cut its key lending rate on Friday for the first time since 2001 to 0.3 percent, saying that “increased sluggishness in Japan’s economic activity will likely remain over the next several quarters.”
Speculation grew that the European Central Bank and the Bank of England would follow suit next week with fresh rate cuts.
The Indian moves, announced on a Saturday when financial markets were closed, were the latest in a slew of easing steps by the bank to stabilize domestic markets, which have been feeling the heat from the global crisis.
India’s stock market has tumbled by 53 percent from highs in January as risk-averse foreign investors have pulled out their funds and parked them in investment safe havens while the rupee has tumbled by nearly 20 percent against the dollar this year to record lows.
“Global financial conditions continue to remain uncertain and unsettled, and early signs of a global recession are becoming evident,” the bank said.
“These developments are being reflected in sharp declines in stock markets across the world and heightened volatility in currency movements. International money markets are yet to regain calm and confidence,” the bank said.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday obtained the government’s approval to inject an additional US$7.5 billion into its US subsidiary, the Department of Investment Review said in a statement. The department approved TSMC’s application of investing in TSMC Arizona Corp, which is engaged in the manufacturing, sales, testing and design of IC and other semiconductor devices, it said. The latest capital injection follows a US$5 billion investment for TSMC Arizona approved in June. The chipmaker has broken ground on two advanced fabs in Arizona with aggregated investments approved by the department totaling US$24 billion thus far. According to TSMC, the first Arizona
The lethal hack of Hezbollah’s Asian-branded pagers and walkie-talkies has sparked an intense search for the devices’ path, revealing a murky market for older technologies where buyers might have few assurances about what they are getting. While supply chains and distribution channels for higher-margin and newer products are tightly managed, that is not the case for older electronics from Asia where counterfeiting, surplus inventories and complex contract manufacturing deals can sometimes make it impossible to identify the source of a product, analysts and consultants say. The response from the companies at the center of the booby-trapped gadgets that killed 37
FRIENDLY TAKEOVER: While Qualcomm Inc’s proposal to buy some or all of Intel raises the prospect of other competitors, Broadcom Inc is staying on the sidelines Qualcomm Inc has approached Intel Corp to discuss a potential acquisition of the struggling chipmaker, people with knowledge of the matter said, raising the prospect of one of the biggest-ever merger and acquisition deals. California-based Qualcomm proposed a friendly takeover for Intel in recent days, said the sources, who asked not to be identified discussing confidential information. The proposal is for all of the chipmaker, although Qualcomm has not ruled out buying some parts of Intel and selling off others. It is uncertain whether the initial approach would lead to an agreement and any deal is likely to come under close antitrust scrutiny
SECURITY CONCERNS: The proposed ban on Chinese autonomous vehicle software and hardware would go into effect with the 2027 and 2030 model years respectively The US Department of Commerce today is expected to propose prohibiting Chinese software and hardware in connected and autonomous vehicles on US roads due to national security concerns, two sources said. US President Joe Biden’s administration has raised concerns about the collection of data by Chinese companies on US drivers and infrastructure as well as the potential foreign manipulation of vehicles connected to the Internet and navigation systems. The proposed regulation would ban the import and sale of vehicles from China with key communications or automated driving system software or hardware, said the two sources, who declined to be identified because the