Archive for the ‘capital’ Category

Fighting inflation: Vietnam and China take different measures

March 21, 2008

The State Bank of Vietnam has been taking a lot of measures to tighten monetary policies in order to curb inflation. It has issued VND20,300bil worth of compulsory bonds, raised state banks’ basic interest rates, raised the compulsory reserve ratio, and has been purchasing foreign currencies at a moderate level.  
The said moves have had big impacts on the operation of commercial banks and led to a lot of side effects. The capital shortage has become more and more serious with the interest rate once hitting 25-27% per annum. Under the government’s instructions, the State Bank of Vietnam and Ministry of Finance will join forces to transfer the government’s money now kept at five state owned banks to State Bank branches for management. 
The transfer of VND52tril is believed will have big impacts on the monetary market. Experts say that the move may cause the lack of VND25tril for the banks, worsening the banks’ liquidity. Also aiming to curb inflation, the State Bank of Vietnam has asked commercial banks to limit loans for real estate and securities investments, and tighten consumer credit. The State Bank of Vietnam has urged commercial banks, which provided loans with mortgaged stocks, to ask for more mortgaged assets from clients as stock prices are decreasing.
If clients cannot give more mortgaged assets, commercial banks have to force them to bargain shares away to terminate credit contracts. As a result, a big volume of money has been flowing from the stock market to commercial banks’ coffers.
 Commercial banks have nearly stopped loaning to securities investors; this is considered one of the main reasons behind the stock market’s continued falls in the last time.  Lacking capital for production and business, which may lead to production stagnation and lower competitiveness, higher unemployment, continued falls of the stock market, are all consequences of the tightened monetary policies. 
Meanwhile, the Chinese government has put forward six groups of measures to fight high inflation, which include: (1) encouraging production expansion, especially the production of key products like food and foodstuffs (2) controlling tightly industries which use food and foodstuffs as materials (3) strengthening its storage system, controlling imports and exports, stabilising domestic prices. Moreover, it has also thought of measures to give allowances to poor people and control its distribution network to prevent massive price increases. 

(Source: TBKTVN)From: VietnamNetBridge

China could become main supplier of capital: report

November 27, 2007

By Umesh Desai

HONG KONG (Reuters) – Top manufacturer China could also become the world’s main supplier of capital as it rolls out financial market reforms that could free up billions of dollars in savings for investment, a panel of experts said on Tuesday.

But while the reforms try to address long-standing barriers to capital market development in the world’s fastest growing major economy, they could lack teeth if poorly implemented.

“We have so far seen China as a manufacturer of cheap goods, in future it may be seen as a major supplier of capital,” Stuart Leckie, senior advisor at Britain’s index provider FTSE Group, said at the launch of a report on China’s capital market.

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Pakistan: Militants move beyond tribal areas

November 5, 2007

By Anwar Iqbal
The Washington Times
November 5, 2007

Islamist militants, cited by Pakistani President Pervez Musharraf in his declaration of a state of emergency, are for the first time threatening the government outside their stronghold in the tribal areas along the Afghan border.

In the first two days of the emergency, security forces have been busier rounding up Supreme Court judges and the president’s political opponents in the capital than going after the militants.

But insofar as the crisis was provoked by the growing strength of the extremists, it was their new offensive in the Swat Valley — a scenic area known as the Switzerland of Pakistan — that prodded Gen. Musharraf to drastic action.

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