Regulators and policymakers are taking no chances in the face of the volatility. The Reserve Bank of India on Aug 7 cut its benchmark repurchase rate by 35 basis points to 5.4% — the lowest level since 2010. This is India’s fourth cut this year. The move by India comes just hours after the Reserve Bank of New Zealand cut its official cash rate by 50bps to 1%. India and New Zealand joined the likes of South Korea and Indonesia in the region that had similarly eased their monetary policies in recent weeks. On the same day, Bank of Thailand unexpectedly cut 25bps to 1.5% — the first such move in more than four years.
SINGAPORE (Aug 12): Amid the market volatility, investors are seeking refuge in safe-haven asset classes. Gold rallied above US$1,500 an ounce — the highest level since 2013, extending a 17% gain since the start of the year. Silver surged as well. “Turbulent geopolitical conditions along with shaky economic fundamentals have enacted sharp bearish pressures on risk assets while raising bullion appeal for the current term,” writes Phillip Futures analyst Benjamin Lu in his Aug 7 note.
“The current macroeconomic environment is highly supportive of gold and silver which, as inflation-busting assets, perform well during times of traditional currency weakness,” says Ned Naylor-Leyland, manager of the Merian Gold & Silver Fund at Merian Global Investors in an Aug 7 commentary.
