8 Dec 2011:
The US dollar is holding onto its gains ahead of a
key meeting of the EU policymakers amid expectations
that the European Central Bank (ECB) us due to cut its
key lending rate by 25 basis points when it meets in
Frankfurt later today. The ECB is also expected announce
additional liquidity measures given the persistent fears
on the Eurozone debt impasse and shrinking economic
activity. The US currency surged to highs of 1.3390
against the Euro in Asian trading today, having already
clocked a high of 1.3350 yesterday as reports trickled
in stating that the Eurozone summit is unlikely to see a
major coordinated move from the policymakers. The single
currency had gained yesterday on reports that Eurozone
official talks are focusing on the possibility of
allowing the euro-zone's 440 billion euros ($590
billion) bailout fund to remain in operation when a new
€500 billion facility comes into force in 2012. European
leaders are due to meet in Brussels today for a two-day
summit billed as crucial for the debt-stricken region.
German Chancellor Angela Merkel and French President
Nicolas Sarkozy have proposed broad treaty changes that
would toughen fiscal rules and impose automatic
sanctions on countries that violate budget limits.
In last week of November, the Organization for Economic
Cooperation and Development had state that the European
Central Bank should loosen monetary policy again and may
need to devise more radical nonstandard measures to save
the euro-zone economy. In a report that stressed the
importance to the world economy of a turnaround in the
euro-zone debt crisis, the OECD said the ECB should cut
official interest rates again and continue with its
existing nonstandard measures, which include the
controversial program of buying government bonds. ECB
has already cut its key refinancing rate by 0.25% points
to 1.25% at its November meeting.
The Indian rupee was weaker during the early hour on
Thursday, 08 December 2011 as euro eased some of its
overnight gains against the US dollar and negative start
to the local equities further weighed down the Indian
unit. The domestic currency opened lower by 4 paise at
Rs. 51.75 to a dollar, registered a high of 51.70 and
dropped to an intra day low of 51.91 so far during the
day. In the spot currency market, the Indian unit was
last seen trading at around 51.82, down almost 11 paise
or 0.21% as compared to previous close at 51.71. Euro
eased some of its previous gains during early Asian
hours on Thursday, over caution before the European
Central Bank's rate decision later in the day and EU
summit on Friday. If no concrete solution is reached
tomorrow, it could trigger massive sell-off amongst risk
correlated assets as fears will intensify that S&P could
consider downgrading 15 Euro zone nations after having
put them on “negative watch” early this week. After
having rebounded to almost 1.3427 overnight, the euro is
currently seen quoting at around 1.3405 against the US
dollar.
Meanwhile, the US Dollar Index, which measures the
performance of the U.S. unit against a basket of six
currencies, is down 0.04%, at around 78. 46 levels.
Among Asian currencies, the Taiwan dollar is down 0.07%
at 30.18, the South Korean won lost 0.42% at 1130.70
while the Indonesian Rupiah fell 0.33% at 9067.50 as
against the US dollar. Key benchmark indices edged lower
in early trade on weak regional stocks. Asian stocks
dropped on Thursday ahead of a European summit on the
region's sovereign debt crisis, and as economic data
from Japan and Australia signaled the global economy is
slowing. Foreign institutional investors (FIIs) bought
Indian shares worth Rs 135.36 crore on Wednesday, as per
the provisional data from the stock exchanges. At the
time of writing, India's key benchmark BSE Sensex lost
around 175 points at around 16702 while S&P CNX Nifty is
lower by almost 55 points at 5007.
2 Dec 2011:
Rio Tinto has given the green light to an additional
$2.7 billion capital investment to modernise its
aluminium smelter in Kitimat, British Columbia. This new
investment will allow for completion of the $3.3 billion
project in 2014. The Kitimat modernization project will
increase the smelter's current production capacity by
more than 48 per cent to approximately 420,000 tonnes
per year. First metal is expected to come on stream in
the first half of 2014, with an expected ramp up of nine
months. The modernised smelter will be powered
exclusively by wholly-owned hydropower and use Rio Tinto
Alcan's proprietary AP40 smelting technology to reduce
the smelter's carbon dioxide emissions intensity by
approximately 50%. “The modernization of Kitimat will
transform its performance, moving it from the third
quartile to the first decile of the industry cost curve,
and cut greenhouse gas emissions by about half,” said
Jacynthe Côté, chief executive of Rio Tinto Alcan. “This
project draws on two of our greatest competitive
advantages - clean, self-generated hydropower and
leading-edge AP smelting technology. Once completed,
Kitimat will be one of the most efficient and
lowest-cost smelters in the world, and will better
position us to serve the rapidly growing demand for
aluminium in the Asia-Pacific market.”
Jean Simon, president, Primary Metal, Rio Tinto Alcan,
said “For nearly 60 years, the smelter has been a major
impetus for the economic development of northwest
British Columbia. We are very proud to announce this
US$2.7 billion investment to complete the modernization
project. This is one of the largest private investments
in B.C.'s history, and it will ensure the sustainability
of the aluminium business in Kitimat for decades to
come.” The modernization project will secure
approximately 1,000 stable, specialized jobs in B.C.'s
northwest for the long term, and 2,500 jobs during the
peak period of the construction phase.
15 Nov 2011:
The Indian rupee slumped to its lowest level in 32
months on Tuesday, November 15, 2011 tracking a
pessimistic environment on the global front that pushed
up demand for safe haven dollar, pressurizing other
Asian currencies. The domestic currency opened at Rs.
50.46 per dollar and dropped to 50.71, a level last seen
on 31st March, 2009. Volatile local shares and
persistent dollar demand from oil importers also weighed
down the domestic currency. Rupee, in the spot currency
market, however managed to pare some of the initial
losses and was last seen trading at 50.58, lower by
around 28 paise or 0.56% as compared to previous close
at 50.30. Spike in European yields triggered sharp
sell-off in EURUSD pair overnight, benefiting the dollar
and in turn hammering Asian currencies that registered a
strong start on Monday. Sentiments deteriorated quite
considerably during the European and US session, partly
due to a disappointing Italian 5-yr bond auction and
also on the back of comments from ECB member Weidmann
that the ECB must not become lender of last resort for
European governments. The single common currency dropped
from a high of 1.3808 yesterday to a low of 1.3593 in
early Asian trades today.
Meanwhile, the DXY Index, which measures the performance
of the U.S. unit against a basket of six currencies, is
up 0.07%, at around 77.63 levels. Among Asian
currencies, the Taiwan dollar is down 0.17% at 30.21,
the South Korean won fell 0.39% at 1127.60 while the
Indonesian Rupiah lost 0.50% at 9010.00 as against the
US dollar. Intraday volatility was witnessed in morning
trade as key benchmark indices slipped into the red once
again after reversing initial losses to hit fresh
intraday highs. The market edged lower to hit three-week
lows in early trade. Asian shares fell on Tuesday, as a
rise in euro zone bond yields reflected lingering doubts
about the ability of politicians in Italy and Greece to
push through painful reforms to resolve their debt
crises and win market confidence.
Foreign institutional investors (FIIs) bought shares
worth Rs 321.62 crore on Monday, as per the provisional
data from the stock exchanges. At the time of writing,
India's key benchmark BSE Sensex rose around 8 points at
17126 while S&P CNX Nifty is higher by mere 4 points at
around 5145. In the domestic currency futures market on
the NSE, the front month November 28, 2011 contract,
opened on Tuesday at 50.55, higher than spot market
rupee. The contract hit an intraday high at 50.83 and
registered a low at around 50.53 so far during the day.
Meanwhile, euro- rupee contract added 0.04% to 69.03
from its previous close of 69.00. The JPY/INR contract
is up 0.32% at 65.83 from 65.52 while the GBP/INR
contract gained 0.15% at 80.60 from 80.48 as at close on
Monday. At the time of writing, the NSE as well as MCX
November 2011 USD/INR contract was trading at around
50.76, higher by around 25 paise or 0.50% as compared to
previous close at 50.51.
The recent developments in Euro-zone have
heightened uncertainty in financial markets throughout
the world and as a result, India's short-term growth
prospects have also been impacted, stated the Union
Finance Minister Pranab Mukherjee yesterday. The
minister noted that India is among the fastest growing
economies today and is widely believed to be steadily on
the course to occupy a place among the top three
economies of the world by the year 2050. Mukherjee said
that the post-global financial crisis, the world has
seen most major economies facing an uphill task in
engineering their recovery. He said that they are
variously affected by concerns ranging from high
unemployment, declining incomes, inflation and issues
related to sovereign debt. He said that we could come
out of the crisis without any major economic dislocation
and recovered our growth momentum rapidly.
The Finance Minister also said that India's export
sector has performed well this year. As per the recent
export data, the growth of merchandise exports during
first six months of 2011-12 is 52 per cent, he added.
Mukherjee noted that the tendency of some developed
counties to resort to protectionist measures in the face
of downturn of their economies is a matter of concern.
9 Nov 2011:
Export of sub-standard products will ruin our
reputation in the international market as a supplier of
high quality spices to the world. And the Export
Development Board has already been facilitating Good
Manufacturing Practices (GMP) to the cinnamon industry
to improve our Cinnamon quality, says Rishad Bathiudeen,
Minister of Industry and Commerce of Sri Lanka. Minister
Bathiudeen was addressing the Annual General Meeting of
the Spice Council on November 04 at Taj Samudra Hotel,
Colombo. Also present on the occasion were Basil
Rajapaksa, Minister of Economic Development, Reginald
Cooray, Minister of Minor Export Crop Promotions, and
Sarada de Silva, Chairman of the Spice Council.
“I wish to stress an important point for the members of
spice exporter's association. That is, exporting of
sub-standard products will ruin the reputation gained by
Sri Lanka in the international market as a supplier of
high quality spices to the world. The Export Development
Board has already assisted 20 cinnamon processing
centers to upgrade them to Good Manufacturing Practice
status to improve the quality of cinnamon. I wish to
request the exporters who are not following standards of
international compliance and food safety methods to
adhere to them in order to safeguard our position in the
international market. The Spice Council can also provide
some guidelines to the members to follow. What is more
important is that we need more exports of value added
products in the spices and allied products sector. Only
few exporters are engaged in export of value added
products. Essential oils, oleoresins are some examples.
Export of organic spice products is another sub-sector
which has substantial potential. This is because the
Japanese and European markets are now very health
conscious” Minister Bathiudeen said.
Speaking of contribution of spices to Sri Lanka's
exports basket, Minister Bathiudeen said: “The Spices
and Allied products sector has been identified as one of
the potential sectors to achieve US$ 1 billion target in
2020 by the Sri Lanka Export Development Board under my
Ministry. Also, the government has decided to increase
its investments in minor crops to sustain the efforts of
the Ministry of Minor Export Crop Promotions. Further,
Spices and Allied products sector also contributes a
considerable amount of foreign exchange to the national
economy. During January-August 2011, the Spice sector
has recorded 25% growth, indicating export earnings of
US$ 153 Mn compared to the same period in the year 2010.
During the year 2010 too, the export earnings has
accounted for US$ 165 Million.”
Inviting the industry to take part in the 2012 mega
exports show, Minister Bathiudeen said: “The Export
Development Board has taken initiatives to organize a
mega exhibition “Sri Lanka Expo 2012” during 28th -30th
March 2012 at the BMICH. This event is organized with
the objective of promoting Trade, Investment and
Tourism. It is targeted to attract 1000 top buyers from
key export destinations to visit Expo 2012. In addition
to buyers, Ministerial delegations, prospective
investors and media personalities are expected to attend
the event. It has also been proposed to organize a
symposium with exclusive speakers from overseas to
address on global trade and specific industry trends. I
take this opportunity to invite you to participate in
this exhibition and showcase your products and skills to
the international buyers.” Speaking of the Mahinda
Chinthana Framework, Minister Bathiudeen said:
“According to the Mahinda Chintana Policy Framework, the
Government's aim is to give greater access to the rural
farmers to our export earnings and enhance their living
standards. I am most happy to commend Economic
Development Minister Hon. Basil Rajapaksa's efforts to
develop our backyard economic units through the
effective Divi Neguma Project. As you are aware, Spices
are grown mainly in home gardens in addition to
inter-cropping with perennial crops contributing to the
rural economy and income generation for the small farmer
clusters, which is a key focus of the Mahinda Chinthana.
Please accept my thankfulness to you all as exporters,
for playing a key role in supporting our rural economy.”
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