Another week has passed by, and as usual, we have a lot to talk about.
In this weekly wrapup, we will discuss why the RBI is looking for a competitor for NPCI, the birth of Pandemic bonds, RBI's latest move to stimulate the economy, how the U.S. Government is protecting its steelmakers, and Shree Cement's entry into Nifty 50.
Let's get started!
Things are heating up for NPCI
On Monday, we talked about an entity that's improving retail payment system in India. Paying for stuff is easier than ever. Whether you're at a tea stall or a toll booth, you don't have to scramble for change anymore. And while applications like Google Pay, PhonePe, Paytm, Freecharge etc. facilitate these transactions, someone else builds the payment infrastructure that makes all of this possible.
And that someone is the National Payments Corporation of India (NPCI). They are currently the only entity streamlining retail payments across India. But now, it looks they are about to face some competition.
Why, you ask? Find out here.
Pandemic Bonds to the Rescue?
On Tuesday, we talked about an unusual bond offered by the World Bank. Back in 2016, Ebola caused carnage in West Africa. But they didn't have the resources to fight the Pandemic. The World Bank could not deploy funds without first assessing the damage, and was largely restricted to the sidelines. It was time for a fix.
So they decided to get private investors on board to fund relief programs instead. Of course, they would never pay up unless they were getting something in return. And so the World Bank had to manufacture Pandemic Bonds. Not following completely? Read more about this strange financial instrument here.
RBI’s Long Term Repo Operation simplified
On Wednesday, we talked about RBI's latest attempt at reviving consumer demand. The central bank has been cutting its overnight lending rates for a while now, hoping that banks would do the same with consumer loans. They cut the repo rate several times last year, and conducted some open market operations to manipulate spending. But the transmission mechanism didn't work as well as they hoped.
So now, they are back with a new, unconventional policy where they are offering banks long term loans at their overnight lending rates.
Feeling lost? Don't worry, we've explained everything here.
Laws of steel: A Saga of Protectionism
On Thursday, we talked about how the U.S. government is trying to boost its domestic steel industry. America has always protected its steelmakers. They are quick to impose heavy duties on countries they suspect of selling steel below cost price. And two years ago, Donald Trump decided to take this one step further.
In order to boost domestic manufacturing, he slapped a 25% tariff on all foreign steel. But unfortunately, it did more harm than good.
Why, you ask? Find out here.
Cementing a position in the Nifty 50
On Friday, we spoke about how Shree Cement made it to Nifty 50.
If someone asks you how the stock market is doing, it wouldn't be possible for you to go and check the individual performance of every listed company. So the Nifty 50 is a cheatsheet of sorts. And only the most robust and active stocks get in.
So how did a Cement manufacturer from Rajasthan manage to secure a position in this prestigious index?
The answer might surprise you. Find out here.
Well, that's it from us. Catch you next week!