International Economy - Current Affairs for August, 2016

Russia and Turkey have agreed on 9th August 2016 to work towards restoring full relations

• Agreement was reached at a meeting between Russian president Putin and Turkish president Tayyip Erdogan
• Both leaders agreed to restore economic relations and resolve the crisis in Syria
• The two countries will restore annual bilateral trade target of USD 100 billion

Australia has set up a cyber intelligence unit to find out about terror financing, money laundering and financial frauds online due to unprecedented threats to national security

• Measure expands under the initiative of the Malcolm Turnbull led conservative government which narrowly won re-elections last month
• New unit set under money tracking agency Australian Transaction Reports and Analysis Centre/AUSTRAC will investigate online payment platforms and financial cybercrime to monitor and track money laundering and criminal networks
• Use of fraudulent identifies continues to be a key enabler of serious and organised crimes of terrorism
• New AUSTRAC unit will work with Australian and New Zealand funded ID Care to target job recruitment scams crime syndicates use to recruit people for money trafficking
• New unit will also work with Australian Cybercrime Online Reporting Network to identify patterns and trends that could indicate scams

Government has notified 4 percent inflation target with a range of plus/minus 2 percent for the next 6 years under the monetary policy framework agreement with the Reserve Bank

• Powers conferred by Section 45ZA of the RBI Act 1934, central government in consultation with the bank hereby notified the inflation target beginning from the date of publication of the notification and ending on March 31, 2021
• Notification fixes inflation target at 4 percent with upper tolerance level of 6 percent and lower limit of 2 percent for 2016-2017 and subsequent years
• Government has amended the RBI Act through Finance Act 2016 for providing the Monetary Policy Committee with a specific inflation goal yet does not notify the inflation target
• Central government in consultation with the RBI shall determine the inflation target in terms of the CPI once every five years
• Central government has initiated the process of setting up an MPC which will take over the job of interest rate setting from the central bank.

South Korea has overtaken China as the largest exporter of steel products to India in the first quarter of 2016-2017.

• South Korea exported 5.11 lakh tonnes of steel to India, marginally higher than that exported by China at 5.10 LT during the April-June quarter in 2016-2017.
• China was followed by Japan at 3 LT and Russia at 1.70 LT during the April-June quarter in 2016-2017.
• Together, these four countries accounted for more than three-fourth of the steel.

Manufacturing activity in China fell in July, according to a government survey. The Chinese government’s manufacturing Purchasing Managers’ Index which tracks health of large and public companies was 49.9 in July.

It was 50 in June.
• China’s economy is the world’s second largest.
• From March to May, the survey noted results above the key 50 level that separates expansion from contraction.