International Economy - Current Affairs for February, 2016

These include mandatory card-based or electronic payments beyond a prescribed threshold and withdrawal of any additional charge currently imposed on card or digital payments by various government entities and the introduction of the required infrastructure for digital payments in all government offices. Cabinet also gave approval for rationalising of the merchant discount rate (MDR) on card transactions and telecom service charges for digital financial transactions to promote mobile banking.

Chinese capital has overtaken Big Apple/NYC as the home to most billionaires (around 95 to 100) according to Shanghai firm  Hurun which released yearly rankings. Reports suggest China now has more billionaires than the US. Study also found that Beijing had close to 32 billionaires more while NY just gained 4 in the past year. While Moscow was third, Hong Kong and Shanghai came in 4th and 5th.

PBOC/People’s Bank of China has pumped in 163 billion yuan or USD 25 billion into 30 financial institutions to ease liquidity in the second largest economy of the world. It is currently witnessing sluggish growth and PBOC pumped money into the financial system in open money market operations via medium term lending facility.

In what is Seoul’s strongest punitive measure to stop Pyongyang from using hard currency from the park for developing nuclear and missile programmes, South Korea has started shutting down a joint industrial park in N Korea. This was the last major cooperation project in Korea and has been shut down as punishment for Pyongyang’s recent rocket launch.

Wall Street fell by more than 1 percent on 11th February 2016 pushing the S&P 500 and Down Jones Industrial average down 10 percent for the year. Major S&P financials were in the red especially banks and the financial sector dropped by 2.71%. Janet Yellen, the Fed Reserve Chairman indicated tightening financial conditions were on account of a less than robust international economy and steep fall in US equity markets. The S&P 500 was down 29.18 points, or 1.58 per cent, at 1,822.68 and the Nasdaq Composite index was down 50.14 points, or 1.17 per cent, at 4,233.45. Benchmark BSE Sensex plunged by 148 points when the NSE Nifty fell below the 7200 mark in early trade on 11th February through sustained selling by funds and retail investors amid weak Asian cues. The index traded down by 148.20 points or 0.62 per cent at 23,610.70 with all sectoral indices led by metal, capital goods, banking and realty leading the fall. Sensex has fallen by as much as 858 points in the past three days while NSE Nifty fell below 7200 mark by falling 29.50 points or 0.40 per cent to 7,186.20. Hong Kong’s Hang Sen also slumped while Chinese and Japanese markets remained closed for public holidays.