Make Money

Bank of Japan Leaves Rates Alone

As expected, the Bank of Japan left its benchmark interest rate unchanged at its latest meeting. The current rate of .5% remains the lowest in the industrialized world and thus will continue to fuel the Japanese carry trade. The Bank fended off the criticism of several European Ministers, wary of the Yen’s continued appreciation against the Euro, including a 5% increase in the last month alone. The EU has insisted that Japan should hike rates immediately both to avoid global economic imbalances and to prevent its own economy from overheating. Japan defended its decision by pointing to certain small business indicators, which suggest the sector is still underperforming. Carry traders, rest easy. Bloomberg News reports:

“The Bank of Japan will probably need to put off a hike at least until December to nail down its assessment of global growth as well as the performance of small companies,” said Masaaki Kanno, a former central bank official

No Comment  

India's Forex Reserves Top $250 Billion

Among the so-called BRIC developing countries (Brazil, Russia, India, China), India is probably the second hottest economy at the moment, after China of course. And following in the footsteps of other developing countries, it is quickly building a massive stock of foreign exchange reserves in order to hold down inflation. Previously, I resisted covering India, because its reserves were small compared to those of China and Japan and hence its potential impact on the Dollar was limited. However, having set another record, India's forex reserves now top $250 Billion, which rank the country among the highest in the world in this regard. In fact, India is accumulating reserves at the blistering rate of $3 Billion/week! The breakdown of the reserves (in terms of foreign currency) is unclear, but it seems reasonable to believe that it is dominated by Dollar assets.

No Comment  

personal loans

There are two kinds of personal loans, secured and unsecured. Secured loans are backed by some form of collateral such as an automobile, a home or property. They are usually for longer periods of time and for larger amounts than unsecured loans. Secured loans are easier to qualify for because the lender takes on less risk with the presence of collateral. Because of the lowered risk they generally have lower interest rates. Secured loans are best for borrowing large amounts, people with bad or imperfect credit history and those that want longer repayment periods.

No Comment