International Monetary Fund predicts 7.3% growth rate for India in current fiscal year

International Monetary Fund predicts 7.3% growth rate for India in current fiscal year

While banks have increased their capital and liquidity buffers since the global financial crisis a decade ago, they remain exposed to highly indebted companies, households and sovereigns, as well as to holdings of opaque and illiquid assets, and to the use of foreign currency funding.

The title of its Financial Stability Report is meant to provoke - "A Decade After the Global Financial Crisis: Are We Safer?" - yet the Fund fails to answer its own question.

Lagarde said: "Some of the risks that we have highlighted, particularly at our spring meetings in April, have now begun to materialise, especially from the rising trade barriers".

China, however, could still be labelled a currency manipulator if the US Treasury decides to rely more heavily on the older 1988 Act, which allows for a more subjective assessment of whether a currency is being manipulated to gain unfair competitive advantage in trade.

"But even across emerging markets, we see a lot of differentiation".

"The central bank has given an indication to let the rupee go with market forces", said one broker. Britain sold off many of its assets in the privatisations of the 1980s and 1990s and also did not create a sovereign wealth fund from its oil revenues, which Norway did.

The report also amplified worries about global trade, echoing numerous earlier IMF statements, but noted that trade tensions have thus far affected individual sectors more directly than the financial system.

The IMF has also warned that United Kingdom public finances are among the weakest in the world.

The IMF fears this could lead to sharp falls in markets.

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Over the last few months, the Chinese government has urged banks to lend more and called on local governments to speed up bond issuance to raise funds for infrastructure spending.

Over 15,000 delegates from 189 countries are now gathered at Bali, Indonesia for IMF/WB Group Annual meetings from 10-14 October 2018. "China's non-financial corporate sector leverage has been rising and is now well above global historical benchmarks", the report noted.

Compared to the medium-term risks, near-term risks have risen in the past six months but are "relatively limited" and subdued, relative to historical norms, with financial conditions still broadly accommodative and supportive of growth in the near-term, said the International Monetary Fund.

According to the IMF, Japan's growth is projected to soften to 0.9 percent in 2019, unchanged from the July estimate.

The American economy has been performing strongly, encouraging worldwide investors to move capital there and invest in the dollar.

The boss of the International Monetary Fund has defended the Federal Reserve's interest rate rises as "legitimate and necessary", after Donald Trump said the central bank had "gone crazy".

But higher U.S. interest rates have also helped send emerging market currencies into a tailspin, as countries that borrowed heavily in dollars race to pay back debt.

The report says that outflows could hit $100bn (£76.4bn) over a year, about 0.6% of emerging market economies' gross national income.

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