Key rates hold steady
The central bank held key interest rates steady as it struggles to foster growth amid high inflation, and took steps to curb currency speculation, lifting the rupee from lifetime lows yesterday. The Reserve Bank of India (RBI) kept the short-term lending rate, or repo rate, at 8.5 percent and the reverse repo rate — the rate it pays to banks for deposits, at 7.5 percent. The bank also kept the cash reserve ratio for commercial lenders unchanged at 6 percent. The bank’s 13 rate hikes since March last tear have kept it out of step with many other emerging economies, which have started to ease monetary policy as global growth slows. RBI Governor Duvvuri Subbarao declined to say when the bank would start lowering rates.
Citigroup exec to step down
Citigroup Inc’s head of Japan banking, Darren Buckley, will step down on Jan. 10 after the lender was punished by local regulators for the third time in seven years. The Japanese Financial Services Agency yesterday said it told the company to stop soliciting sales of products, including mutual funds and foreign-exchange deposits, to retail customers after it failed to fully explain their risk. Citigroup’s local securities unit and Swiss bank UBS AG were also ordered to suspend some derivatives transactions after staff of the firms attempted to influence interbank lending rates, the agency said in a statement.
Morgan Stanley to axe 1,600
Morgan Stanley will cut about 1,600 jobs across all levels of company, becoming the latest bank to slash payrolls against a backdrop of extreme volatility in financial markets. The cuts, which amount to 2.6 percent of the bank’s workforce, will be made in the first three months of next year, a spokesman for the New York-based investment bank said on Thursday. The bank had more than 62,000 employees as of the end of September. Spokesman Mark Lake said the cuts would occur globally and would include analyst, associate, vice president, executive director and managing director levels.
Posco to build Brazil mill
South Korea’s Posco Engineering and Construction said yesterday it won a US$4.3 billion deal to build a steel mill in Brazil with an annual capacity of 3 million tonnes. It said it would sign a contract with Companhia Siderurgica do Pecem later in the global day for the integrated mill, which will be completed by 2015. Companhia Siderurgica do Pecem is a joint venture between Brazil’s Vale with a 50 percent stake, South Korea’s Dongkuk Steel Mill with 30 percent and Posco, which holds 20 percent. The mill’s slab production, a semi-finished steel product, will mostly be supplied to Dongkuk Steel Mill.
Victoria’s Secret vows probe
US lingerie maker Victoria’s Secret on Thursday vowed to investigate claims that some of its fair-trade underwear is produced using child labor. In a statement, Victoria’s Secret’s parent company said it was “very concerned” that fair-trade-certified cotton used in its panties could have been farmed using under-aged labor in Burkina Faso. The retailer — which became a household name thanks to its catalogue and the prominent use of models, such as Gisele Buendchen, Helena Christensen, Elle MacPherson and Claudia Schiffer — is a multibillion-dollar-a-year business.