| Credit policy won’t raise your home loan rate
Reserve Bank of India (RBI) Governor YV Reddy on Tuesday unveiled the quarterly review of the credit policy. Ordering banks to keep a tight leash on lending, it hoped to keep inflation within manageable limits. Here's how the policy affects you. Will your loans get costlier? Home loan and other consumer loan rates are unlikely to rise. There is cash aplenty, but it comes with a healthy leash. What about fixed deposits? Banks were set to cut interest rates on deposits as they had more cash to lend. With the RBI mopping up some of it, they are unlikely to cut fixed deposit rates. Reddy did this by raising the cash reserve ratio (CRR), the proportion of deposits that banks must keep as cash with the RBI, to 7 per cent from the present 6.5 per cent.
Federal Reserve holds firm on interest rates
The Federal Reserve on Tuesday decided not to change a key interest rate, citing concerns over inflation and financial market stability. Despite moderate economic growth in the first half of the year, the Federal Open Market Committee voted unanimously to maintain its target for the federal funds rate at 5.25 percent. �Financial markets have been volatile in recent weeks, credit conditions have become tighter for some households and businesses, and the housing correction is ongoing,� the central bank said in a written statement. �Nevertheless, the economy seems likely to continue to expand at a moderate pace over coming quarters, supported by solid growth in employment and incomes and a robust global economy,� the Fed reported. Financial markets held steady following announcement of the Fed decision.
Key Interest Rate Unchanged
WASHINGTON (AP) - The Federal Reserve left a key interest rate unchanged on Tuesday as worries about inflation trumped concerns about turbulent financial markets. Fed Chairman Ben Bernanke and his colleagues voted unanimously to keep their target for the federal funds rate - the interest that banks charge each other - at 5.25%, where it has been for more than a year. The Fed decision came after a volatile couple of weeks on Wall Street as investors have been beset by troubles in global credit markets stemming from a sharp rise in defaults on subprime mortgages. In a brief statement, the Fed acknowledged the turbulence and said the downside risks to the economy had "increased somewhat." But the Fed continued to state that the predominant risk remained that inflation "will fail to moderate as expected." Many analysts believe the Fed will remain on hold through the rest of this year, preferring to watch and make sure that inflation moderates back to an acceptable level.
Ratna PSUs can park only 30% in govt MFs
In a significant decision that may have far reaching implications on stock market the government, on Wednesday, decided to allow Navranta and Miniratna Public Sector Undertakings (PSUs) to invest up to 30 per cent of their surplus cash fund only in public sector mutual funds.. .
Manulife Financial Corporation reports record second quarter earnings of $1.1 billion
Manulife Financial Corporation today reported record shareholders' net income of $1,102 million, an increase of 15 per cent over the second quarter of last year. Fully diluted earnings per share were $0.71, up 18 per cent from one year ago. As well, adjusted return on common shareholders' equity(1) was 18.5 per cent, an increase of 220 basis points. Second quarter premiums and deposits rose to $16 billion, an increase of five per cent over last year when considered on a constant currency basis. Growth was a result of continued strong sales and growth in recurring premiums and deposits. "The second quarter was a solid one for our Company," said Dominic D'Alessandro, President and Chief Executive Officer of Manulife Financial. "Our businesses continued to deliver strong earnings and sales growth and our return on equity hit a post-merger record.
The Global Economy and Financial Markets: Where Next?
Good afternoon, ladies and gentlemen. It is a pleasure to be here in Sydney. I'd like to thank the Lowy Institute for inviting me to address this distinguished gathering. Little did we know when we set the topic for today's meeting that it would seem so relevant. Although the answer to the question "Where Next?" is inherently uncertain, I am happy to have the chance to exchange views. For the global economy, the last decade has represented a period of impressive progress, interspersed with episodes that were challenging, and even threatening at times. The latest financial market volatility has ushered in a moment of anxiety and concern. At the very least, it is apparent that global markets are re-pricing credit risk. In this era of financial globalization, markets have become increasingly integrated.
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