The rupee rallied and shares surged on Thursday (5 September) after the Reserve Bank of India chief unveiled a slew of measures to support the ailing currency and open markets, providing a shot of confidence for investors unnerved by the country's worst economic crisis in two decades.The rupee rose as much as 2.3 per cent to 65.53 per dollar, well off the record low 68.85 hit on 28 August.The Nifty rose as much as 3.3 per cent, propelled by lenders such as HDFC Bank, which surged after the new measures included increasing overseas borrowing limits for banks.However, amid the euphoria over RBI Governor Raghuram Rajan's strong Wednesday debut, economists warned he cannot by himself solve the challenges in an economy facing a sharp growth slowdown and a record high current account deficit, which have fueled a 16 per cent slide in the rupee so far this year.The government has failed to push through politically tough reforms needed to fix the economy, and elections due by next May instead raise the prospect of expensive populist spending that could threaten the country's sovereign credit rating, which is one notch above junk status."To a certain extent, the recent rupee tumble and instability in the financial markets, has been a crisis of confidence. To that end, the path of action provided by the new governor and the stress on keeping communications predictable and consistent will be a welcome move," Radhika Rao, an economist at DBS in Singapore, said in an email to clients."Still, the external drivers of the rupee weakness will continue to dictate the momentum, along with the urgent need to address domestic structural pitfalls - fiscal and current account deficits, along with reviving investment activity."At least for Thursday (5 September), Indian markets reflected the optimism placed on Rajan, a former chief economist at the International Monetary Fund who unexpectedly unveiled a flurry of proposals in his first day at the helm of the central bank.In terms of action to prop up the rupee, the measures included providing exporters and importers more flexibility in hedging their forward currency contracts, as trading firms had long complained about regulations that left them unable to quickly cope with rapid currency movements."The statement is impressive and a must-read, in our view," Deutsche Bank said in a note."India's myriad cyclical and structural impediments will continue to hold back the economy for the time being, and risks of a deeper crisis are non-trivial, but (Wednesday's) statement shows a fresh and cohesive vision of monetary and financial sector policy from a newly appointed central bank governor can shine a much-needed light on India's promise and potential."India's defence of the rupee has so far relied on controversial steps taken by the RBI, which have included draining cash from the market, raising short-term interest rates and imposing capital controls on resident Indians.Investors have expressed little faith that the government can push through substantial reforms, such as a hike in subsidised fuel prices, that could help revive confidence in the economy.Asia's third-largest economy is suffering from a dearth of investment and sharp slowdowns in the manufacturing and services sectors.(Reuters)
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The move by the Reserve Bank of India to offer concessional swap rates to banks to raise dollar deposits from non-resident Indians could raise up to $8-$10 billion, Bank of America-Merrill Lynch says, as it removes the currency risk away from banks or citizens abroad.The RBI will swap FX-denominated foreign currency non-resident bond (FCNRB) deposits with tenures of 3 or more years at a fixed hedge cost of 3.5 per cent a year until 30 November.Banks are raising these deposits from NRIs at Libor/swap rate of +400 basis points, which works out to a cost of mobilising FCNRB deposits at about 8.5 per cent and with lending at 11 per cent, it will enable banks to enjoy a 250 basis point spread as these deposits will not qualify for CRR or SLR status for now, BofA-Merrill says.Separately, Morgan Stanley estimates that the measure could raise an additional $5-$10 billion from NRIs.(Reuters)
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Indian Prime Minister Manmohan Singh on Wednesday, 4 September called for an "orderly exit" from unconventional monetary policies being pursued by the developed world for the last few years to avoid damaging growth prospects of the developing world. In a statement before leaving for the 8th G-20 Summit in the Russian city of St.Petersburg, he also underscored the importance of the grouping of industrialised and major developing economies to promotes policy coordination among major economies in a manner that provides for a broad based and sustained global economic recovery and growth. The Prime Minister made a reference to orderly exit from unconventional monetary policies in the backdrop of splits between emerging markets and the US over its winding down of stimulus and the slowing growth of India and other four BRICS countries. Singh said though there are encouraging signs of growth in industrialised countries, there is also a slowdown in emerging economies which are facing the adverse impact of significant capital outflow. "I will emphasise in St. Petersburg the need for an orderly exit from the unconventional monetary policies being pursued by the developed world for the last few years so as to avoid damaging the growth prospects of the developing world," he said. Brazil, India, Russia, China and South Africa--grouped in the informal BRICS bloc seen as an alternative economic powerhouse--all go into the meeting experiencing slowing growth, embattled currencies and huge capital outflows. The Indian rupee has lost one-fifth of its value against the US dollar this year following major capital outflows triggered mainly due to the moves by the Fed Reserve. India is also suffering a decade-low growth and GDP rose just 4.4 per cent in the first quarter this fiscal, the weakest performance since 2009. Singh said he will once again emphasise at the Summit that the G2-0 should ensure primacy of the development dimension in his deliberation, focus on job creation, promote investment in infrastructure as the means of stimulating global growth and create potential in developing countries to sustain higher growth in the medium term. The Prime Minister said it is also important that G-20 encourages and promotes policy coordination among major economies in a manner that provides for a broad-based and sustained global economic recovery and growth. India has been an active participant in this endeavour as co-Chair of the Working Group on the "Framework for Strong, Sustainable and Balanced Growth". "There is also an urgent need to reform institutions of global political and economic governance. I am happy that the Russian Presidency has paid special attention to these issues in the G-20 agenda this year, particularly through a new financing for investment initiative," he said. Singh noted that the Summit comes at a time when India has introduced several reform measures and taken steps to strengthen macro-economic stability, stabilise the Rupee and create a more investor-friendly environment. "At the same time, a stable and supportive external economic environment is also required to revive economic growth. The G 20 Summit, therefore, is an important forum to seek an international climate that is beneficial for all countries," he said. The G20 accounts for 90 per cent of the global economy, 75 per cent of global trade and two-third of the world population. Its members are Argentina, Australia, Brazil, Canada, China, France, Germany, Indonesia, India, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the UK, the US and European Union. India's concern over the rout of the rupee is to some extent reflected by its efforts to seek support from other emerging economies for coordinated intervention in offshore foreign exchange markets. On the sidelines of the St Petersburg summit, the BRICS leaders are expected to work for a consensus on creating a USD 100 billion currency reserve fund to help ease short-term liquidity pressure and safeguard financial stability of major emerging economies. The BRICS bloc is also reported to have agreed on the capital structure for a proposed development bank that aims to reduce their reliance on Western financial institutions. The bank is likely to have 50 billion USD as initial capital. (PTI)
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Gold futures jumped more than 2.5 per cent on Tuesday, 3 September as continued weakness in the rupee made the dollar-quoted yellow metal expensive, while importers remained on the sidelines as they awaited fresh guidelines from the federal government.At 1310 IST, the most-active gold contract for October delivery on the Multi Commodity Exchange (MCX) was 2.01 per cent higher at Rs 33,730 per 10 grams. The contract had struck a peak of Rs 35,074 last week.The rupee, which extended losses to near a record low, plays an important role in determining the landed cost of the dollar-quoted yellow metal.In the physical market, gold traders awaited operational guidelines from the customs department, after a five week halt in shipments, which drove premiums higher."There is no demand from anywhere and imports are zero," said Haresh Acharya, head of bullion desk, Parker Bullion in Ahmedabad.Silver contract for September delivery on the MCX was 2.46 per cent higher at Rs 56,305 per kg.(Reuters)
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The rupee slid a little closer on Tuesday (3 September) to a record low struck against the dollar last week, as share markets weakened and investors remained doubtful whether the government would act decisively to restore confidence in the economy.With crude oil prices rising due to fears about a potential US military strike on Syria, economists have called for an increase in subsidised fuel prices to help address concerns over a record high current account deficit and a fiscal deficit that is among the highest of all the major emerging market economies.Markets are keenly waiting to see how former International Monetary Fund economist Raghuram Rajan will handle the defence of the rupee once he takes over as governor of the Reserve Bank of India on Thursday, having previously beeen an advisor to the finance ministry.As elsewhere, traders were also cautiously waiting for US jobs data due out on Friday (31 August) that could effect expectations about when the Federal Reserve will start tapering its monetary stimulus. The prospect of less easy money from the United States has caused a exodus from many emerging markets over the past few months, but India has fared worse than most because of its precarious deficits.The RBI's rupee defence has so far rested largely on draining money markets, but the rupee has still lost over 19.5 per cent against the dollar since the slide began in early May, and higher short term interest rates have raised borrowing costs for struggling corporates at time when the economy's slowdown has become more acute.The partially convertible rupee traded at 67.20 per dollar by afternoon trade on Tuesday (3 September), weakening from its close of 66.00/01 on Monday (2 September), and not far from the record low of 68.85 hit on 28 August.The rupee was impacted by gains in the dollar on international markets and falling domestic shares.The broader Nifty fell more than 2 per cent on Tuesday (3 September) on profit-taking snapping a three-session winning streak to Monday when it ended at a 2-1/2 week high.Technicals suggest the rupee could fall further after a period of relative range-bound trading since striking the record low last week.Offshore traders see the rupee staying near the record low with one-month contracts for non-deliverable forwards trading at 68.30.India is suffering from a dearth of investment, and the measures taken by the government so far have failed to convince investors to put more money into an economy, which is growing at a dangerously slow pace given India's demographics.SubsidiesWith a national election due by May, there are doubts whether Prime Minister Manmohan Singh's minority government would be ready to take unpopular steps like raising subsidised fuel prices. Earlier this week, lawmakers derided a proposal from Oil Minister Veerappa Moily to close petrol pumps at nights.India has unveiled measures to curb gold imports and announced gradual diesel price hikes, but economists say more are needed."Small hikes in fuel are not going to make up for the losses of oil companies. The government will have to raise prices to send a clear signal to investors, because if they do not meet the fiscal deficit target, it will be negative for the economy," said Rupa Rege Nitsure, chief economist at Bank of Baroda.Data released on Friday (30 August) showed the economy had grown by a worse than expected 4.4 per cent in the April-June quarter, adding to fears that growth this fiscal year will come in below the decade low growth of 5.0 per cent notched in the fiscal year that ended in March.Investors worry the government is more focused on expensive, populist measures that will make it hard for India to meet its target of bringing the fiscal deficit down to 4.8 per cent of gross domestic product this fiscal year.On Monday, the upper house of parliament approved a scheme, that will cost an estimated $20 billion, to provide subsidised grains to the poor."The government is trying to rationalise subsidies on one front, but has also approved the food security bill simultaneously, raising concerns over whether the government is really committed to meeting its fiscal deficit target," Nitsure said.(Rueters)
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Vodafone Group said it was in talks with Verizon Communications to sell its prized stake in Verizon Wireless, the No. 1 US mobile carrier, in what would be the third-biggest deal of all time. Verizon could pay $130 billion for 45 per cent of Vodafone’s stake, according to reports. Verizon has made no secret of its desire to gain full ownership of a network that is growing at a rapid rate and generating billions of dollars in free cash flow. But Vodafone’s CEO Vittorio Colao waited for the right moment to sell the stake in a deal that would leave the world’s second largest mobile operator with assets in Europe and emerging markets such as India, Turkey and Africa. Verizon is working with several banks to raise $10 billion from each to finance about $60 billion of the deal. The two firms also own a cross holding in Vodafone Italy, which may form part of the deal.Under FireAround 40 per cent of the US’s highest paid CEOs over the past 20 years ended up being fired, paying fraud-related fines or settlements, or accepting government bailout money, according to an Institute for Policy Studies (IPS) study. It said CEOs of large firms received about 354 times as much pay as the average American worker in 2012. IPS looked at the 25 best-paid CEOs for each of the last 20 years — 241 in total. Of course, all the big financial services firms during the 2008 financial crisis received bailouts, but many, such as Lehman Brothers’ Dick Fuld, were at the helm when their firm either went under or accepted a rescue package.Paying UpMerrill Lynch has agreed to pay $160 million to settle a federal class action lawsuit brought by African-American brokers eight years ago, according to reports. The settlement, one of the largest in an employment discrimination case, would set up a pool of money to be divided among around 1,200 current and former brokers at the firm, according to one of the partners at Stowell & Friedman, the Chicago firm that brought the case in 2005. The federal district court is yet to approve the settlement. Previously, Coca-Cola had agreed to pay $192.5 million in a settlement in 2000; and Texaco agreed to a settlement valued at $176 million in 1996.Break With HistoryBillions of dollars in US tax breaks prized by manufacturers, energy firms and other industries could be targeted for elimination when two powerful lawmakers introduce proposals to overhaul the US’s tax system. The plans may be introduced this month and face tough odds in the Congress. Democratic Senator Max Baucus, chairman of the Senate Finance Committee, and Republican Representative Dave Camp, head of the House Committee on Ways and Means, are considering trimming a slew of tax deductions and other breaks to offset the cost of cutting the top corporate and individual rates to as low as 25 per cent, say aides and others. The corporate rate now tops out at 35 per cent, while the highest individual rate is about 40 per cent.The Bright SparkThe Philippines’ economy posted a robust expansion of 7.5 per cent in the second quarter, matching the pace of China as the other fastest growing economy in Asia. Strong fundamentals and domestic spending buttressed the country from the region’s fund outflows. The solid growth pace lifted the peso from nearly three-year lows and would help the Philippines keep its favoured status among investors amid more market volatility. The Philippines has overtaken emerging economies such as Indonesia as a safe investment bet due to prudent management of fiscal and monetary policy. It secured investment grade from ratings agencies this year.It’s A HitSony has a hit product on its hands. And Apple, Samsung Electronics and LG are all using it! Sony’s latest star performer isn’t a gadget, but a chip found in almost every high-end camera and smartphone — Apple’s iPhones 5 and 4S, Samsung’s Galaxy S4 and LG’s G2, say researchers. The firm that helped invent the CD has captured almost a third of the $7.6 billion market for low-power sensors that record crisp snapshots. Sony boosted its revenue from the chips by about 30 per cent last year. Rivals’ reliance on Sony components isn’t new, as the firm supplied semiconductor parts for music players to other manufacturers. About 80 per cent of the imaging sensors Sony produces are sold outside the firm, said a Sony spokesman.Caution AdvisedThe Bank of Japan (BoJ) signalled that the government needed to proceed with a planned two-stage hike in sales tax as part of efforts to fix its tattered finances or face a severe market backlash. Yoshihisa Morimoto, a BoJ board member, reaffirmed the bank’s assessment that the Japanese economy was headed for a moderate recovery, but noted headwinds such as geo-political risks in West Asia and market volatility caused by an expected reduction in the US Federal Reserve’s monetary stimulus as soon as this month. Angela Merkel (Bloomberg)Blame GameGreece should never have been allowed to join the euro, German Chancellor Angela Merkel said, as she tried to lay the blame for the euro zone’s debt crisis at the door of her political opponents. Campaigning for re-election, Germany’s centre-right leader said, “This crisis has been formed over many years through mistakes that were made when the euro was created.” At a campaign rally, Merkel insisted that “one should not have accepted Greece into the euro zone...Chancellor Schroeder accepted Greece and weakened the stability pact...Both were fundamentally wrong and are the reasons for our problems today.” After Greece adopted the euro in 2001, public spending and government borrowing soared. Since 2009, Greece has been kept on life support by bailouts worth €240 billion. Europe’s biggest economy, Germany, made the largest contribution to the bailout funds, but Merkel has been attacked in Greece and elsewhere for prescribing such a heavy dose of austerity.Uneven RecoveryLending to the euro zone’s private sector contracted further in July, dragging on the euro zone’s nascent economic recovery and keeping up pressure on the European Central Bank (ECB) to maintain its expansive monetary policy. Private sector loans shrank by 1.9 per cent since July 2012, recent ECB data showed. A breakdown of the data showed declines were generally steeper on the bloc’s struggling periphery, showing that the recovery was uneven. The ECB has tied its “forward guidance” on interest rates to the inflation outlook and monetary dynamics remaining subdued.(This story was published in BW | Businessworld Issue Dated 23-09-2013)
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The growth of eight infrastructure industries slowed down to 3.1 per cent in July, against 4.5 per cent in the same month last year, mainly due to contraction in crude oil and natural gas production. The growth in July, however, was higher than the previous month when the core sectors had expanded by just 0.1 per cent. The infrastructure sector - coal, crude oil, oil refinery, natural gas, steel, cement, electricity and fertilisers - accounts for 37.9 per cent of India's industrial output, which expanded just 1 per cent during the last fiscal year. Crude oil and natural gas production contracted by 2.3 per cent and 16.1 per cent respectively in July, according to the official data released today. Petroleum refinery production expanded by 5.1 per cent in the month against 26 per cent in July 2012. Steel production grew by 7 per cent, while cement output was up by 0.8 per cent in July this year. Coal and electricity production slowed down by 1.2 per cent and 5.2 per cent as against 2 per cent and 2.7 per cent respectively in July 2012. Fertiliser output grew by 0.4 per cent in July. During April-July period, the growth of eight infrastructure industries slowed to 1.9 per cent from 6.3 per cent in the same period last year. The growth was 3.9 per cent in 2012-13 as against 5 per cent in the previous financial year.(Agencies)
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The rupee ended two days of gains to fall by 30 paise to close at 66 against the dollar on Monday, 2 September, on demand from importers as the US currency strengthened.The rupee's decline, amid capital outflows and data showing slowing economic growth, was restricted by a rise in local equities, a forex dealer said.At the interbank foreign exchange market, the local currency started weak at 66.15 to a dollar from the previous close of 65.70 and then climbed to a high of 65.68.The rupee then turned negative and dropped to a low of 66.30 before recovering some ground to end at 66, a fall of 30 paise or 0.46 per cent. In the previous two trading sessions, it had zoomed by 310 paise or 4.51 per cent."On account of US bank holiday, the volumes were quite thin and the rupee was seen trading in a very tight range," said Abhishek Goenka, CEO of India Forex Advisors. "Last week's dismal GDP numbers of India and strength in the US dollar index made the rupee open on a weaker note today."The benchmark S&P BSE Sensex continued its upward march for the fourth straight session and closed up by another 266.41 points or 1.43 per cent.Foreign institutional investors withdrew a net Rs 78.85 crore of shares last Friday, as per provisional data with the stock exchanges.The dollar index, consisting of six major rivals, was up 0.10 per cent ahead of data and central-bank policy this week.India's gross domestic product growth slipped to 4.4 per cent in the April-June quarter, from 4.8 per cent in January-March.The HSBC/Markit purchasing managers index for the country's manufacturing industry contracted for the first time in over four and a half years to stand at 48.5 in August, lower than 50.1 in July."The trading range for the spot USD-INR pair is expected to be within 65.40 to 66.60," said Pramit Brahmbhatt, CEO of Alpari Financial Services (India).Forward dollar premiums improved on continued payments from banks and corporates.The benchmark six-month forward dollar premium payable in February firmed up to 258-265 paise from Friday's close of 247-252 paise. Far-forward contracts maturing in August hardened to 465-471 paise from 440-445 paise.The RBI fixed the reference rate for the dollar at 65.8608 and for the euro at 87.0575.The rupee fell to 102.84 against the pound from 101.86 previously and settled at 87.22 per euro from 87.It recovered to 66.48 per 100 Japanese yen from 66.91 previously.(PTI)
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A delay in potential US military action in Syria and improving economic data from China and Europe boosted appetite for riskier assets on 2 September' 2013, lifting world shares and sending the yen lower. Oil prices also fell after US President Barack Obama announced at the weekend that any military action against Syria in response to last month's chemical weapons attack would wait until lawmakers had had a chance to vote on the plan. The delay pushed down oil by more than $1 a barrel, and gold by more than 1 per cent, while the dollar rose to a one-month high against the safe-haven yen. "Any risk of strikes from some Western countries on Syria have decreased at least near-term," Patrick Jacq, European rate strategist at BNP Paribas said. "The risk premium linked to geopolitical events has decreased, so risk appetite probably is resuming somewhat." Global Economy ShinesWith an imminent attack on Syria off the table for now, investors focused on the latest economic data, which showed China's factories posting their best performance for more than a year in August, easing fears of a sharp slowdown. Euro zone factory activity rose at its fastest pace in over two years during August though the gains were still only modest and unemployment remained stubbornly high. There was encouraging news from struggling euro zone member Spain, however, where manufacturing grew in August for the first time since April 2011. Elsewhere, India notably bucked the trend with a Purchasing Manager's Index (PMI) showing manufacturing activity in Asia's third-largest economy shrank in August for the first time in over four years, adding to the country's economic malaise. "Just about the whole world seem seems to be surprising on the upside on PMIs except India," Mike Ingram, market commentator at BGC Partners, said. Shares RecoverMSCI's world equity index was up 0.5 per cent after the data, ending a run of four consecutive weekly losses made as investors positioned for the US Federal Reserve to begin reducing monetary stimulus, perhaps at its meeting later this month. Earlier MSCI's broad index of Asia-Pacific shares outside Japan advanced 1 per cent, hitting a two-week high and adding to a 2.1 per cent gain over the previous two sessions. Tokyo's Nikkei rose 1.4 per cent. European shares reflected the brighter economic outlook. gaining 1.5 per cent in early trading, with Britain's FTSE 100 up as much as 1.3 per cent and Germany's DAX up 1.6 per cent at one point. A holiday in the US and a week of major central bank meetings capped by the all-important US payrolls report was likely to keep activity in check though. Among the major currencies, the easing in Syrian tension reduced demand for the Japanese yen which is often sought for its safety in a time of crisis. This saw the dollar gain 1.2 per cent to 99.38 yen, its highest level in a month. The brighter economic news from China lifted the Australian dollar, which is seen as a proxy for Chinese growth because of the two countries' close trade ties. It rose 0.8 per cent to $0.8970. But the Indian rupee edged down 0.3 per cent to 65.90 to the dollar after two days of gains, and was not far from a record low of 68.80 per dollar hit last week. Indonesia's rupiah , which has also been under pressure lately, was down 0.2 per cent after the country logged a wider-than-expected trade deficit. Buoyed by the factory activity data from top-consumer China, copper prices rose 2.2 per cent and were on track to end a four-day losing run. Oil and gold prices fell as investors unwound their positions because the US has postponed a military strike against the Syrian government. Brent crude prices dropped 0.5 per cent to below $113.50 a barrel, on track for a third day of declines. It had touch a six-month peak of $117.34 last week on concerns that US military intervention could lead to retaliation and disrupt crude supply in the Middle East region, which pumps a third of the world's oil. Safe-haven gold dipped 0.25 per cent to around $1,392 an ounce after falling as low as $1,379.44, a one-week trough, earlier in the session.(Reuters)
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The BRICS bloc of large, emerging economies has agreed on the structure of a proposed development bank with $50 billion in capital, but ironing out "difficult" details may take months, Russian Deputy Finance Minister Sergei Storchak said.Officials from Brazil, China, India, Russia and South Africa agreed in early August that the bank's capital should come from three payment categories, including subscriptions, Storchak told journalists in remarks for publication on Monday.The establishment of the development bank aimed at providing funds for infrastructure projects has been slow in coming, with prolonged disagreement over funding and management of the institution."We must assume that the bank will not start functioning as fast as one could imagine," Storchak said. "It will take months, maybe a year."At the summit of the Group of 20 developed and developing nations this week in Russia's St. Petersburg, BRICS leaders will meet in an unofficial format, Storchak said, to discuss the progress on setting up the bank and a joint reserve fund.The issues of division of the capital, payment of the capital, the location of the bank and the bank's management still need to be decided, Storchak added."These are systemic themes, complicated, (and) negotiations are difficult," he said, adding that he hopes that some decisions will be made soon.The group has struggled to take coordinated action after an exodus of capital from Brazil, Russia, India, China and South Africa prompted by an expected scaling back in US monetary stimulus raised fears about the health of their economies.On Friday, India said it was seeking support from other emerging economies for coordinated intervention in offshore foreign exchange. The rupee has shed a fifth of its value against the dollar in the past three months.But Brazil rejected outright involvement in any intervention and other major emerging economies, including Russia, would not comment.In June, at the G20 finance ministers meeting in Moscow, the group failed to take joint action to withstand spillover effects from US policies.The establishment of the group's development bank was first proposed in 2012, but approve only earlier this year at a BRICS summit in Durban, South Africa.A Brazilian government official directly involved in the negotiations on BRICS development bank said members are still discussing how much each country will put in.He said Brazil supports the idea of each country contributing $10 billion for the new bank."There are some countries that want a different structure," said the official, who asked for anonymity because he was not allowed to speak publicly about the matter. "It's not going to be an easy negotiation, we are not there yet."China, the largest BRICS economy worth $8.2 trillion and a growing global influence, had earlier proposed $100 billion capital and sought a bigger share, igniting disagreements and slowing negotiations.Brazil and other BRICS peers have launched a series of multi-billion dollar infrastructure projects to refurbish dilapidated airports, roads and railways and keep their economies going. The new development bank, in principle, would help finance these projects.(Reuters)
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