India is set to give final approval to a $2.6 billion deal for military helicopters from U.S. defence firm Lockheed Martin ahead of a proposed visit by U.S. President Donald Trump this month, defence and industry sources said.
Prime Minister Narendra Modi’s government is trying to pull out all the stops for Trump’s trip in a bid to reaffirm strategic ties between the two countries, which have been buffeted by sharp differences over trade, to counter China.
India’s defence purchases from the United States have reached $17 billion since 2007 as it has pivoted away from traditional supplier Russia, looking to modernize its military and narrow the gap with China.
Modi’s cabinet committee on security is expected to clear the purchase of 24 MH-60R Seahawk helicopters for the Indian navy in the next two weeks, a defence official and an industry source briefed on the matter separately told Reuters.
To cut short lengthy negotiations between Lockheed and the Indian government, the helicopters that will be deployed on India’s warships will be bought through the U.S. foreign military sales route, under which the two governments will agree details of the deal.
Trump is expected in India around Feb 24 on his first official visit to the country, although no formal announcement has yet been made.
Both countries are separately working on a limited trade agreement ahead of the trip, after earlier imposing tit-for-tat tariffs on each other’s imports.
Trump has called India the “tariff king of the world” but the Modi government has been trying to address some of his concerns.
Trade officials have pointed to large-scale U.S. arms purchases, from surveillance planes to Apache and Chinook helicopters, as proof of India’s willingness to tighten strategic ties.
The multirole helicopters will be equipped with Hellfire missiles and are meant to help the Indian navy track submarines in the Indian Ocean, where China is expanding its presence.
The Reserve Bank of India is likely to keep monetary policy accommodative without cutting interest rates at a policy meeting on Thursday, economists said, as inflation is above target and the economy has shown possible signs of recovery from its worst slowdown in more than a decade.
The central bank’s monetary policy committee (MPC) cut rates by 135 basis points over five straight meetings last year, before surprising markets in December by holding the policy repo steady at 5.15% due to growing concerns over inflation.
A Reuters poll of economists, conducted before the federal budget on Feb. 1, showed the central bank is expected to keep the repo rate unchanged until at least October, when it is seen resuming its easing path.
The RBI is now forecast to next cut rates by 25 basis points to 4.90% in the October-December quarter, though some analysts reckon the central bank will keep rates on hold for longer.
Data released after the MPC’s December meeting fuelled even more concern as annual retail inflation surged to 7.35% in December, mainly driven by food prices, its highest level in more than five years.
The RBI is mandated to keep the headline inflation rate within the broad range of 2%-6% while it targets medium term inflation at 4% levels.
For all the gloom over India’s economy, a private survey released on Monday showed manufacturing activity expanded at its quickest pace in nearly eight years in January with robust growth in new orders and output.
The government’s budget gave only limited support to a recovery in economic growth, with proposals got only moderate spending increases and small cuts in personal taxes.
President Vladimir Putin accelerated a shake-up of Russia’s political system on Monday, submitting a constitutional reform blueprint to parliament that will create a new centre of power outside the presidency.
Putin also replaced Prosecutor General Yuri Chaika, who had held the role since 2006, a move suggesting his planned changes could reach beyond the political system and the government.
In a surprise move, Putin announced plans for reforms last week. Long-time ally Dmitry Medvedev then resigned as prime minister along with the government, saying he wanted to allow room for the president to make the changes.
Putin’s proposed changes are widely seen as giving him scope to retain influence once his term expires in 2024 though he said at the weekend he did not favour the Soviet-era practice of having leaders for life who die in office.
In one of the biggest changes, the status of the State Council, now a low-profile body that advises the president, would for the first time be enshrined in the constitution.
Putin, 67, has not disclosed what he plans to do once he leaves the Kremlin. One option could be to head the beefed-up State Council once he leaves the presidency.
Under his proposals, the president would pick the make-up of the State Council which would be handed broader powers to “determine the main directions of domestic and foreign policy.”
His changes also envisage preventing any future president serving more than two terms. Putin first became president in 2000 and is now in his fourth term as head of state.
The world’s richest 2,153 people controlled more money than the poorest 4.6 billion combined in 2019, while unpaid or underpaid work by women and girls adds three times more to the global economy each year than the technology industry, Oxfam said on Monday.
The Nairobi-headquartered charity said in a report released ahead of the annual World Economic Forum of political and business leaders in Davos, Switzerland, that women around the world work 12.5 billion hours combined each day without pay or recognition.
In its “Time to Care” report, Oxfam said it estimated that unpaid care work by women added at least $10.8 trillion a year in value to the world economy – three times more than the tech industry.
It is important for us to underscore that the hidden engine of the economy that we see is really the unpaid care work of women. And that needs to change,” Amitabh Behar, CEO of Oxfam India, told in an interview.
To highlight the level of inequality in the global economy, Behar cited the case of a woman called Buchu Devi in India who spends 16 to 17 hours a day doing work like fetching water after trekking 3km, cooking, preparing her children for school and working in a poorly paid job.
“And on the one hand you see the billionaires who are all assembling at Davos with their personal planes, personal jets, super rich lifestyles,” he said.
Behar said that to remedy this, governments should make sure above all that the rich pay their taxes, which should then be used to pay for amenities such as clean water, healthcare and better quality schools.
The Sensex crossed 42,000 for the first time as it touched 42,059 in the morning trade on January 16. It took 36 sessions for the index to make the journey from 41,000 (first hit on November 26) to 42,000, but the big movers were the small & midcap stocks.
The Sensex added 1,000 points, rising 2.4 percent, but the BSE Midcap index rose 4.8 percent and the BSE Small-cap index rallied by more than 8 percent in the same period.
The rally can be attributed to positive global cues, reforms initiated by the government to combat falling growth and expectations of reforms from the Budget that will be presented on February 1.
Small & midcaps seem to be getting the maximum attention as most of the stocks in the broader market space have been giving double-digit returns from November 26, 2019.
The global investment bank Morgan Stanley said in a report the trend could well favour quality midcaps in 2020.
Morgan Stanley said it was backing three themes for 2020:
a) domestic cyclical outperform defensives,
b) value and growth stocks beat quality stocks,
c) mid-caps lead the largecaps.
Investor wealth soared by over Rs 6 lakh crore in a buoyant equity market. The market capitalisation of BSE-listed firms soared from Rs 153.70 lakh crore on November 26 to Rs 159.74 lakh crore on January 15, 2020.
Bank of England interest-rate setter Michael Saunders said on Wednesday he was sticking to his view that borrowing costs should be cut because of weakness in Britain’s labor market and its broader economy.
“It probably will be appropriate to maintain an expansionary monetary policy stance and possibly to cut rates further, in order to reduce risks of a sustained undershoot of the 2% inflation target,” Saunders said in a speech.
“With limited monetary policy space, risk management considerations favor a relatively prompt and aggressive response to downside risks at present.”
Saunders was one of two of the nine members of the BoE’s Monetary Policy Committee who voted to cut interest rates in late 2019.
Since then, other MPC members have said a rate cut might be necessary, including BoE Governor Mark Carney.
Saunders said some recent business surveys suggested Britain’s economy had improved while others had worsened than remained sluggish.
“But, taken as a whole … business surveys are generally soft and consistent with little or no growth in the economy.”
Michael Debabrata Patra, 59, has been appointed the Reserve Bank of India (RBI) deputy governor for three years. The post fell vacant after Viral Acharya resigned on July 23 last year.
Patra, as executive director of the central bank, was the principal advisor to the Monetary Policy Department since July 2012. He was also an internal member of the monetary policy committee (MPC). He was in deputation at the International Monetary Fund (IMF) as senior adviser to executive director (India) from December 2008 to June 30, 2012. During the period, Patra was advising the executive board of the IMF in dealing with the global financial crisis and the Euro area sovereign debt crisis.
A practising central banker from inside the system and remarkably familiar with Indian financial markets, Dr Patra is sine qua non for monetary policy making,” said Soumya Kanti Ghosh, group chief economic advisor to State Bank of India. “Dr Patra has also pioneered research in the Indian context on monetary conditions index, exchange rate pass through, market microstructure and monetary policy without money,” Ghosh said.
The pound extended its decline to the longest run in eight months as speculation of an imminent Bank of England interest-rate cut increased.
Sterling fell as much as 0.3% against the dollar to $1.2955. Credit Agricole SA pointed out that more than half of the members of the bank’s Monetary Policy Committee are ready to support a reduction if U.K. data doesn’t improve. The next rate announcement is on Jan. 30.
Bets the BOE will lower borrowing costs this month grew after data on Monday showed the economy shrank in November, casting doubt over whether there was any growth at all in the fourth quarter. That added fuel to a sell-off spurred by policy makers which signaled support for a cut.
The next rate setter due to speak publicly is Michael Saunders on Wednesday morning in Northern Ireland. Consumer price index data for December is also due Wednesday.
A more dovish rhetoric from Saunders, as well as potential downside surprises from the U.K. CPI could add to the headwinds for the pound.
The pound fell to $1.2970. in London, taking its retreat so far this year to 2.2%. It weakened by 0.2% to 85.86 pence per euro, setting course for its fourth day of declines. The yield on 10-year government bonds slipped a third day to 0.719%, the lowest level since Jan. 6.
BNP Paribas is planning to join JPMorgan Chase & Co. and Citigroup Inc . by setting up an electronic currency trading and pricing platform in Singapore.
The facility will support electronic trading of 50 currencies in spot, forward, swaps, non-deliverable forwards and options, according to a company statement. It will also allow trading of precious and base metals.
“In Southeast Asia, we have seen our e-FX trading volumes grow by double-digits year-on-year,” Christophe Jobert, head of global markets for Southeast Asia at BNP, said in the statement. With the new hub “our clients will benefit from better access to liquidity, more efficient price discovery and timelier trade execution,” he said.
Singapore’s currency market saw average trading volumes of $633 billion a day in April 2019, according to the latest data available from the Bank for International Settlements. That’s higher than Hong Kong and Japan, and trails only the U.K. and U.S., the data showed.