Indian refiner raises prices
India’s biggest refiner, Indian Oil Corp, increased gasoline prices by more than 3.5 percent from yesterday, blaming the falling rupee for the hike. The company also raised diesel prices by just more than 1 percent, it said in a statement issued late on Saturday, after a week which saw India’s currency sink to a record low around 69 to the US dollar. Both changes came into effect yesterday, one month after the company last increased gasoline and diesel prices. In addition to the “extremely volatile” exchange rate, the “geopolitical situation in the Middle East is leading to pressure on international oil prices as well,” the company said in a statement.
Australian output increases
Gold output in Australia, the world’s second-biggest producer, advanced in the second quarter on an increase in the amount of metal mined and higher ore grades, according to mining consultant Surbiton Associates Pty. Production was 67 tonnes in the three months through June, about 3.5 tonnes more than the previous quarter and 3 tonnes higher than the same period a year earlier, Melbourne-based Surbiton said in a statement. Output was 259 tonnes in the year ended June 30, “marginally less” than the year prior, it said. Gold slumped in the second quarter as some investors lost faith in the metal as a store of value and an improving US economy boosted speculation the US Federal Reserve may scale back debt purchases that helped bullion cap a 12-year bull run last year. Prices rebounded from a 34-month low in June on increased demand for jewelry, bars and coins in Asia.
Hollande mulls ‘tax pause’
The government is hinting it may appease discontent at tax rises by putting more stress on spending cuts in its fight to control the budget and boost growth. The latest signs came with a new reform of the pension system, which was headed for a huge deficit by 2020, that raises charges for business and workers, but has been widely criticized as a weak compromise. The country has just emerged from recession. However, analysts warn that this could be mainly because of heavy household spending on energy during a long winter, and business leaders are warning that the burden of taxes is becoming counter-productive. Leading figures on the left have begun responding to this, and on Friday President Francois Hollande said “the time has come” to take a “tax pause” after one of his ministers warned of growing “tax discontent.” Hollande told the daily Le Monde that for businesses his administration is “committed to not increasing labor costs and amputating their margins.”
Central bank to provide aid
The central bank will use its range of tools and is ready to provide liquidity if needed to reduce the real’s volatility, bank Governor Alexandre Tombini said. Brazil has a “cushion” of more than US$370 billion in international reserves that allows it to provide hedge to economic agents, Tombini said at an event in Campos do Jordao in the state of Sao Paulo. The bank can also provide liquidity if needed, he said. Policymakers on Aug. 22 introduced a US$60 billion plan to stem the biggest decline amid major currencies that threatens to further stoke inflation, which is near the upper end of the government’s target range. Less than a week later, officials lifted the benchmark rate for a fourth straight meeting, and said in a statement that the decision will help put inflation on decline.