Weekly Digest

Below Poverty Line: 

With the downgrading of the credit rating of the biggest bank of the country SBI from c- to d+, bringing the broad sensex which is already in a bear grip below 16000 points. The reason cited by  the rating agency Moody is that the bank has collected a huge pile of nonperforming which will continue to grow with the rise in interest rates and a slow economy. Capital infusion by the government can be one of the solution to bring it out but is it possible. For more http://www.thehindubusinessline.com/todays-paper/article2512910.ece

Yuan  Surplus in China – Any Problem?

Strange but true! China’s foreign exchange reserves  have been continuously rising for the past few years and currently it stands at over $3 trillion. This surplus is being viewed next only to Euro Debt and US fiscal in terms of impact that it will have on the economies world over. The Chinese central bank has mopped up the liquidity it created while picking up the excess dollars from the market through the central bank's debt instruments and higher reserve ratios. Technically, this is called a sterilisation operation. To unwind its huge surplus China has started offering loans to all countries. However, for Chinese currency loans to be acceptable widely, China will have to do much more towards making its currency market-based, and not stick to its current practice of a managed peg. Besides, Yuan should be more freely tradable across wider geographies. In words, the current restrictions on the Chinese currency have to go. For more http://www.thehindubusinessline.com/opinion/article2512513.ece and http://www.marketoracle.co.uk/Article8320.html

Downgrade of the SBI stand-alone rating from ‘C-‘ to ‘D+

With the downgrading of the credit rating of the biggest bank of the country SBI from c- to d+, bringing the broad sensex which is already in a bear grip below 16000 points. The reason cited by  the rating agency Moody is that the bank has collected a huge pile of non-performing which will continue to grow with the rise in interest rates and a slow economy. Capital infusion by the government can be one of the solution to bring it out but is it possible.For more http://www.thehindubusinessline.com/todays-paper/article2512910.ece ::: By Ankur Sharman