IMF offers USD 100 bn loan to countries facing financial crisis

The International Monetary Fund will offer as much as USD 100 billion in a new kind of loan to countries that are battered by the financial crisis, making available new cash to help ease the world credit crisis.

The new three-month loans, aimed at economies the IMF judges to be troubled but basically sound, wouldn't require countries to make the often severe changes in their policies that the IMF has demanded for decades, a media report said on Thursday.



That makes it potentially easier for crisis-hammered countries such as Mexico, Brazil and South Korea -- which the IMF judges to have basically sound economic policies – to shore up cash reserves, their currency, and their ability to help ailing companies as shaken foreign investors withdraw, a US Journal said.



Those countries, it noted, have shunned the IMF because of the strings attached to the loans, which often force sharp budget cuts or interest-rate increases.



The conditions are designed to help governments save money and pay for necessary

imports, but they also often deepen an economic downturn, making the IMF deeply unpopular around the world.



Now it essentially is dividing developing countries into an A-list of nations that qualify for loans without strings, and a B-list of everyone else, the Journal said.



The new programme, which will use up to about half the IMF's resources, represents a big break from such requirements. "Exceptional times call for an exceptional response," it quoted IMF managing director Dominique Strauss-Kahn as saying.

India can buy uranium anytime and stockpile: Canada

Canada, one of the key members of the Nuclear Suppliers Group (NSG), on Thursday said that India can order for uranium anytime and can even stockpile.

"India can place order for uranium anytime and they can also stockpile it," Gerald W Grandey, President and chief Executive Officer of Cameco Corporation of Canada (largest suppliers of uranium) told reporters on the sidelines of Homi Bhabha's Centenary celebrations' inauguration.

"We have been waiting for a long time for the Indo-US deal to come through and since IAEA India specific agreement and NSG's waiver are in place, we are keen that India buys uranium from Canada anytime," Grandey, a key person who helped in the Indo-US deal process, said.

"Now it is up to India how soon they want and how much and under what conditions," he said adding "we are ready, the decision lies with New Delhi as the customer is always right."

Grandey said, the contractual agreements are not done overnight, it takes its own time and since they had been waiting for long, they wanted India to do it fast.

Replying a query on stockpiling, Grandey said, "stockpiling is a normal thing and under the general policy, one can stockpile for one or two years. Since in Asian countries due to scarcity of supply of uranium, they can stockpile even up to three years of inventories just as Japan has done."

When asked about the price of uranium, he said if it is bought in the spot market, it would cost USD 45 per pound while when bought on a long-term contract it would be USD 70 per pound.

"However, there are varieties of contracts and depending on the relationship between the suppliers and utility (in this case NPCIL) one can fix the price favourably for future delivery," he added.

Grandey said Canada is also interested in cooperation in other parallel fuel cycle process as both India and Canada are having Pressurised Heavy Water Reactor programme.

"We are going to have great opportunity of cooperation in the coming years," he added.

Meanwhile, chief of Canadian Atomic Energy commission is expected to visit India on November six to discuss civil nuclear cooperation, said Chairman and Managing director of Nuclear Power Corporation of India, S K Jain.

Jain said, "although NPCIL can go ahead to buy uranium for the first two units of Tarapur Atomic plants and Rajasthan atomic plants, which are under separate safeguards agreement with IAEA, we will wait till the Indo-US deal is ratified by India and US."

Since NSG waiver is there, some steps can be taken immediately," he added.

Inflation eases to 10.68 pc after over four months

Inflation eased below the 11 percent mark after four months to 10.68 per cent, thanks to lower prices of fuel and manufactured goods, which might goad the Reserve Bank to cut key rates further.

The wholesale prices-based inflation slipped 0.39 per cent in the week ended 18th October, while it stood at 3.11 per cent in the year-ago period.

Inflation, which was 8.75 per cent as of June first week, suddenly jumped to two-digits after the government hiked the administered prices of petrol, diesel and LPG.

The fall in the rate of rising prices might prompt RBI to further cut cash reserve ratio or repo rate, which might result in lower borrowing costs in the economy and spur spending.

During the week, prices of food articles like pulses fruits and wheat declined.

However, prices of vegetables rose by 2.3 per cent and spices by half per cent.

Declining prices of crude oil in the international markets led to fall in prices of furnace oil, which was cheaper by six per cent while prices of light diesel oil declined by three per cent.

Besides, in the manufactured product category, prices of iron and steel declined by half per cent and zinc prices slipped by 11 per cent.

Dreamworks posts fall in profits

Dreamworks Animation has seen third quarter profit fall 21% as revenue fell despite the strong performance of film Kung Fu Panda.

In the quarter to October earnings fell to $37.4m(£23.4m) from $47m in 2007.

However the results were ahead of analyst predictions and shares were up in after-hours trading.

The firm also said David Geffen, who co-founded DreamWorks with Steven Spielberg and Jeffrey Katzenberg, is stepping down from the board.

In after the bell trading, shares were up $1.69, or 6.6%, to $27.30, after gaining $1.88 to $27.49 during the regular session.

Kung Fu Panda contributed $63.3m to quarterly revenue, mostly from international box office receipts.

Another record profit for Exxon

Exxon Mobil made a profit of $14.83bn (£8.97bn) between July and September, smashing its own record for the highest quarterly profit by a US company.

In the second quarter this year, when oil prices were still rising, the oil giant made a profit of $11.68bn.

The new record represents a 58% rise on profits compared with the same period last year.

Profit for the first nine months of this year was $37.4bn, up 29% on the same period last year.

The $1.6bn sale of a natural gas transportation business in Germany helped boost profits.

Rex W Tillerson, chief executive of the company, said: "Exxon Mobil's strong results demonstrate the continued success of our disciplined business approach."

Stormy conditions

The profits could have been even higher, had it not been for falling oil prices and extreme weather.

Hurricanes Gustav and Ike affected the company's Gulf Coast operations and resulted in an increase of $50m in pre-tax costs. Exxon estimates that the impact of both hurricanes will reduce fourth-quarter earnings by about $500m.

Massive profits have allowed Exxon to invest heavily in exploration. In the third quarter, capital and exploration project spending increased to $6.9bn, up 26% on the same period last year.

They have also allowed Exxon to distribute significant cash to shareholders - it paid out $2.1bn in dividends over the quarter.

Japan unveils new stimulus plan

Japanese Prime Minister Taro Aso has unveiled Japan's second economic stimulus package in as many months.

The 5 trillion yen ($51bn; £31bn) package includes cutting highway tolls and increasing loan guarantees that have been offered to small companies.

There will also be a package of tax cuts and other benefits for Japan's struggling households.

It comes on top of the 11.7 trillion yen package unveiled in August by Mr Aso's predecessor, Yasuo Fukuda.

The new package also includes an expansion of tax-exempt housing loans to boost the struggling property market, funding for care of children and the elderly, and support for unemployed young people.

"In this kind of situation, we need to relieve people's insecurities," Mr Aso said.

"We should not be fearful of the violent storm, nor should we just stand and let the typhoon blow us away."

Election delay

But the prime minister also said that if economic conditions allowed, he would like to be able to raise consumption taxes in three years.

Mr Aso said he would wait to call elections until his economic measures had taken effect.

"I would like to ask for people's approval after seeing the achievements of my policies," he said.

The election must take place before September 2009. Before the financial crisis worsened, there had been speculation about a possible snap election in November.

Euro and pound move up on dollar

The euro and the pound both rose strongly on Thursday against the dollar after the Federal Reserve's decision to cut US rates to 1% on Wednesday.

The euro rose to $1.315 against the dollar in morning trading, compared with $1.285 on Wednesday night.

The pound rose to $1.661, up from $1.631 on Wednesday night and almost 14 cents higher than last Friday's six-year low of $1.526.

Despite the rate cut, the dollar edged higher against the yen, to 98.52 yen.

The rate cut ensures that "the dollar remains under pressure, at least in the short term", said Gary Thompson, head of sales trading at CMC Markets.

The rally may be short-lived, however, as both the European Central Bank and the Bank of England are expected to cut interest rates next week.

Interest rate cuts make currencies less attractive, as they reduce the rate of return for investors.

US economy officially shrinking

The US economy shrank at an annualised rate of 0.3% between July and September, according to figures from the Commerce Department.

The gross domestic product (GDP) figures were better than expected, although they show the sharpest contraction of the economy since 2001.

Consumer spending, which makes up two-thirds of the US economy, shrank by 3.1%, the first contraction since 1991.

The 0.3% fall followed 2.8% growth in the previous three-month period.

Recession judgement

Spending on non-durable goods, which are smaller purchases such as food and paper, dropped at its sharpest rate since 1950.

The economic shrinkage means that the US economy is halfway to the standard definition of a recession, which is two consecutive quarters of negative growth.

But the official definition in the US is different, meaning that the US economy is never officially in recession until the National Bureau of Economic Research decides it is.

Nonetheless, the Federal Reserve is clearly concerned about the prospect of a recession and cut its key interest rate from 1.5% to 1% on Wednesday.

"Consumer spending is about 70% of GDP and this looks like the lowest it has been in two decades, which goes to show that in the fourth quarter, we are going into recession," said Bill Walsh, president of Hennion and Walsh in New Jersey.

The GDP figures were accompanied by Labor Department figures showing the number of new claims for jobless benefits last week.

There were 479,000 new claims in the week ending 25 October, which was the same number as the previous week, but still a high number, suggesting that the problems in the economy are feeding through to the job market.