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Oil plunges to lowest level since Jan.

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The price of U.S. benchmark West Texas Intermediate slid roughly 5% to trade at $79 per barrel, reaching its lowest point since January amid mounting recession fears.

Meanwhile, the price of international benchmark Brent crude fell below $87 per barrel, also on track for its lowest close since January.

Both WTI and Brent crude were in technically oversold territory, posting a fourth straight week of declines on Friday and marking the worst losing streak since last December.

Widespread recession fears have been weighing on energy prices but also slammed the stock market recently, with the S&P 500 and Dow Jones Industrial Average falling back into bear market territory on Friday. Both major indexes also set a new low point for the year amid the broad selloff.

Contributing to oil’s decline was also continued strength in the U.S. Dollar, which is considered a safe-haven asset. The ICE U.S. Dollar Index, which tracks the Dollar against a basket of other currencies, rose nearly 1% and reached its highest level since 2002.

With the Federal Reserve raising interest rates by 75 basis points for a third consecutive policy meeting in a row on Wednesday, central banks around the world have been doing the same by announcing rate hikes. Global economic growth concerns have “hit panic mode given a chorus of central bank commitments to fight inflation,” says Edward Moya, senior market analyst at Oanda.

“Central banks are poised to remain aggressive with rate hikes and that will weaken both economic activity and the short-term crude demand outlook,” he describes, adding, “the dollar rally is about to enter another level that could keep the pressure on commodities.”

The S&P 500 energy sector fell more than 6% on Friday for its worst day since May, adding to losses in recent weeks. Still, the sector has far outperformed the benchmark S&P 500 index this year (down 23%), rising over 20% thanks to a surge in oil prices earlier this year.

But some investors may now be looking to cash out as oil prices have fallen back down to earth. “Not only are there worries about consumption given rising recession risks, but this is a pretty crowded space with a lot of nervous longs sitting on healthy year-to-date gains that they’re eager to lock in,” says Vital Knowledge founder Adam Crisafulli.

(Excerpts : Forbes)

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CBSL maintains policy interest rates

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The Monetary Policy Board of the Central Bank of Sri Lanka (CBSL), at its meeting held yesterday (May 27) decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank at their current levels of 8.50 per cent and 9.50 per cent, respectively. 

The Board had arrived at this decision after carefully assessing the current and expected macroeconomic developments and possible risks on the domestic and global fronts with a view to maintaining inflation at the targeted level of 5 per cent over the medium term while supporting the economy to reach its potential. 

While the medium term inflation outlook remains compatible with the current level of policy interest rates and inflation expectations are well anchored, the Board had observed the need for a further reduction in market lending interest rates in line with policy interest rates and other benchmark interest rates, which is imperative for the easing of domestic monetary conditions and domestic economic recovery.

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Google to make Pixel phones & drones in India

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Tech giant Google will soon begin making its Pixel smartphones in India, sources aware of the development have told the BBC.

Google is set to manufacture the phones at an existing Foxconn facility in the southern state of Tamil Nadu.

The firm is also set to independently manufacture drones in the state.

India has emerged as a key destination for global firms looking to diversify supply lines outside China in the midst of geopolitical tensions with the West.

Last year, Google had announced plans to make Pixel smartphones in India, beginning with the Pixel 8.

“India is a priority market for Pixel smartphones, and we’re committed to bringing the best of our hardware and underlying built-in software capabilities to people across the country,” it said in a blog post.

On Friday, sources told the BBC that Alphabet’s Google would make advanced versions of Pixel smartphones at the Tamil Nadu facility and that manufacturing would begin within this calendar year.

Google and Foxconn have signed a contract to this end, the source said.

Foxconn currently has two facilities in Tamil Nadu. At one of its facilities near Chennai city, it assembles Apple’s iPhones.

Google’s decision to make Pixel phones in Tamil Nadu came after state officials met company executives recently.

According to a statement from the Tamil Nadu government, officials from Google are also set to meet state Chief Minister MK Stalin in Chennai soon.

(BBC News)

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PhonePe UPI payments launched in SL

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Adding further momentum to the UPI services in Sri Lanka, PhonePe in partnership with LankaPay, launched the PhonePe UPI payments in Sri Lanka yesterday (May 15). 

The launch event of India’s leading digital wallet & payments app in Sri Lanka was graced by the presence of Shri Santosh Jha, the High Commissioner of India to Sri Lanka, Dr. P. Nandalal Weerasinghe, Governor of the Central Bank of Sri Lanka (CBSL), along with a strong presence of banking sector executives, Payment System Providers, business associations and media.

High Commissioner Jha in his remarks at the launch highlighted that the ease of a familiar digital payments system would further encourage tourism from India. He also urged the companies in Sri Lanka to engage with Indian companies to build on the UPI stack for innovations in hotel bookings, cab bookings and delivery services.

It may be recalled that Prime Minister, Shri Narendra Modi along with the President of Sri Lanka, Ranil Wickremesinghe jointly inaugurated the launch of Unified Payment Interface (UPI) services in Sri Lanka, in collaboration with LankaPay on February 12, 2024.

Referring to the Vision Document that was adopted during the visit of President Ranil Wickremesinghe in July 2023, Prime Minister Shri Narendra Modi had highlighted the strengthening financial connectivity as its key component.

Since its launch, over 6000 transactions have taken place in Sri Lanka, with a value of over SLR 240 million. It is expected that the PhonePayUPI launch would further enhance the extant digital fintech connectivity, including through additional linkages for instance with PickMe, a leading taxi services and food delivery app of Sri Lanka.

Expanding linkages in digital spheres not only gives strength to people-to-people connectivity, it is also a stellar example of India-Sri Lanka partnership in new and emerging domains of technology, keeping pace with the aspirations and expectations of the people of the two countries.

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