Writing by Shilpa Jamkhandikar; Editing by Clarence Fernandez
Finance
India’s inflation to keep steady, growth on track -finmin
Aug 30 (Reuters) – Indian inflation will remain steady in coming months, despite short-term rises in the prices of certain food items, Finance Minister Nirmala Sitharaman told the Economic Times newspaper in an interview.
Food price inflation rose to 11.5% in July, its highest in more than 3-1/2 years, while India is set to receive its sparsest monsoon rains in eight years, adding to Prime Minister Narendra Modi’s woes in an election year.
But economic growth was likely to be robust at least until the end of the year as India heads into the festive season, when spending typically picks up, Sitharaman said in the interview published on Wednesday.
“Till after the new year, you would have enough reasons to believe that the demand situation is going to only go up,” she said. “So, I expect the next quarter will also do well.”
India is set to release GDP data for the period from April to June on Thursday. Economic growth is projected to touch 7.7%, the fastest annual pace in a year, a Reuters poll showed.
Asked about a report by investor Hindenburg on the Adani group, Sitharaman pointed to the role of short-sellers in fuelling volatility in a stock.
“But what I’m looking at is SEBI, with what it does, is able to see the grain from the chaff,” she said, referring to market regulator the Securities and Exchange Board of India.
“Regulatory tools, if used properly, coming out of this, can lead to better corporate governance,” she added.
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Finance
Finance Minister Smotrich urges PM Benjamin Netanyahu to kick Turkey out of hostage deal talks
Finance Minister Bezalel Smotrich urged Prime Minister Benjamin Netanyahu to have Turkey removed from the ceasefire talks, in a letter published on Friday.
In the letter, Smotrich stated that he was surprised to have learned that representatives of Israel’s “antisemitic enemy Erdogan” are part of the peace talks, and that “Erdogan should be canceled, and any discussion or ties should be boycotted.”
To back his argument, Smotrich noted that Turkish President Recep Tayyip Erdogan has helped the spread of antisemitism and the hatred of Israel. Turkey joined the legal case against Israel at the International Court of Justice in Hague, and has cut financial ties with Israel. He also noted that the participation of the Turky’s representatives was held in secret from the cabinet.
Peace endangers Israel’s national security
Smotrich further stated the peace talks in Cairo were a “national humiliation,” which harms Israel’s national security and “endangers our existence.” The finance minister claimed that Erdogan had “chosen the terror side of radical Islam” and together with Iran and its proxies, they threaten the peace worldwide.
He then claimed that Turkey’s participation in the peace talks provided Erdogan a form of redemption and international legitimacy, which are a “hard hit” to Israel’s national security.
“For a long time now we have been on a downward slope toward doom,” said the minister in the letter, saying that from feelings of victory, Israel is descending into defeat and surrender under Prime Minister Benjamin Netanyahu’s leadership.
Smotrich ended his letter begging Netanyahu to “stop! Just stop. Before it is too late.” He then asked him to “return Israel to the natural path of unrelenting war against its enemies, of bravery, of national pride and dignity.”
Finance
Japan finance chief sees need for stable forex moves amid weak yen
Japanese Finance Minister Shunichi Suzuki on Friday stressed the need for foreign exchange rates to move stably by reflecting economic fundamentals, saying that excessive fluctuations should be rectified.
Speaking at a press conference during his visit to Georgia, Suzuki declined to comment on whether Japan intervened in the currency market when the yen spiked in a short span of time Wednesday in New York.
Japanese authorities have threatened to take action against excessive volatility in the currency market, with the yen falling sharply against the U.S. dollar.
Japanese Finance Minister Shunichi Suzuki (C) and Bank of Japan Deputy Governor Ryozo Himino (R) give a press conference in Tbilisi on May 3, 2024. (Kyodo)
“Foreign exchange rates should be determined by market forces, reflecting fundamentals. It’s desirable that they move stably,” Suzuki told a press conference in the Georgian capital of Tbilisi on the fringes of meetings related to the Asian Development Bank.
Suzuki added that rapid changes cause negative impacts for households and businesses in making plans. “It may become necessary to smooth out excessive moves,” he said.
Despite market talk of currency interventions by Japanese authorities, Japanese government officials have remained silent, leaving traders in the dark.
“Stealth interventions” are used to make traders jittery and prevent them from making bold moves.
Based on data from the Bank of Japan and market sources, Japan likely spent around 8 trillion yen ($52 billion) this week to step into the market and slow the yen’s decline.
Japanese Finance Minister Shunichi Suzuki (5th from L) and Bank of Japan Deputy Governor Ryozo Himino (4th from L) are among the officials attending a meeting of finance ministers and central bank governors from Japan, China, South Korea and the members of the Association of Southeast Asian Nations in Tbilisi on May 3, 2024. (Kyodo)
The yen, which earlier this week tumbled past 160 to the dollar, has regained some of its strength. It rose to the 151 zone on Friday.
Still, the underlying trend of a weak yen remains intact, reflecting the wide interest rate differential between Japan and the United States.
The BOJ raised interest rates for the first time in 17 years in March, but rapid hikes are not considered likely. The U.S. Federal Reserve, for its part, is now expected to take a longer time before starting to cut interest rates.
Related coverage:
Yen briefly rises to 151 in N.Y. after weak U.S. labor data
Another suspected market intervention likely cost Japan 3 trillion yen
BOJ’s March minutes show no urgency to raise rates further
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