Mon, Jan 05, 2015 page15

• Wolrd Business Quick Take

  • Agencies
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  MACROECONOMICS

  India mulls holding company

  The Indian government is considering a demand for a holding company for its stakes in 27 state-owned banks, a move that may make it easier to raise capital as they struggle with their lowest profitability in at least nine years. “We will take a decision at a later stage,” Indian Secretary of Finance Hasmukh Adhia told reporters in Pune, near Mumbai, where a two-day brainstorming session ended yesterday after officials from the government, the regulator and the banks discussed steps to improve the financial health of the lenders. Leaders including Indian Prime Minister Narendra Modi and Reserve Bank of India Governor Raghuram Rajan joined the unprecedented conclave as they sought to address declining profitability, mounting bad loans and poor access to services in rural areas.

  TURKEY

  Foreign reserve ratios raised

  The central bank increased the foreign-currency reserve ratios required of banks and financing companies, after a month in which the lira was among the world’s worst-performing emerging-markets currencies. The revision announced today would add about US$3.2 billion to the central bank’s foreign currency reserves, the bank said in a statement on its Web site. The average reserve requirement ratio for foreign currency, which currently stands at 11.7 percent, is to rise to 12.8 percent, it said. Central Bank of Turkey Governor Erdem Basci on Dec. 10 in Ankara said that the bank would take measures against excessive short-term foreign currency borrowing by domestic banks. The IMF had urged the country to raise reserve requirements for foreign-currency liabilities in a report on Dec. 5, saying that reducing bank incentives to fund themselves in foreign currency would limit the risk of a balance-of-payments crisis.

  MACROECONOMICS

  UK caps redundancy pay

  The ruling Conservatives on Saturday said they would cap redundancy payments for public-sector workers at ￡95,000 (US$145,588) if they win a general election set for May 7, as part of their drive to rein in state spending. Official forecasts suggest 1 million government jobs are set to go over the course of the next five-year parliament. The Conservative Party and their Liberal Democrat coalition partners have already cut about 400,000 public sector jobs since taking power in 2010 to reduce the country’s large budget deficit. The Uk’s Exchequer Secretary to the Treasury Priti Patel, in an article in the Daily Telegraph newspaper, said the Conservative Party would make an election manifesto pledge to cap the pay-offs to public-sector workers and would introduce legislation in the new parliament.

  FOOD INDUSTRY

  Olive oil in short supply

  Forget scouring this month’s sales for clothes and electrical goods and cheap Christmas wrapping paper for next year — the thing to be stocking up on this month is olive oil. A dreadful 12 months for olives in several major producing countries has led to last year being labeled a “black year” for the industry and to the doubling of the bulk cost of olive oil in some areas. Unusual weather and a proliferation of insects and bacterial blight have devastated the harvest in several countries. Analysts have been predicting a bad year for olive oil since the summer, after it became clear that hot late-spring weather in Spain — the world’s largest producer of olives — would have a key impact on autumn harvests.
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