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Interest rates going negative

The Swiss National Bank (SNB) today imposed the negative deposit rate as the Russian financial crisis and the threat of further euro-zone stimulus heaped pressure on the franc. Switzerland normally sees money flowing into its coffers in difficult economic times. A charge of 25 basis points or one-fourth of a percentage point on sight deposits of commercial banks at the central bank, will apply as of January 22. That’s the same day as the European Central Bank’s first decision of 2015.

The European Central Bank (ECB) cut a key interest rate below zero, the first major central bank to venture into negative territory. The ECB cut its deposit rate to minus 0.1% from zero on June 5, then again to minus 0.2% on September 4, when President Mario Draghi said interest rates had reached the “lower bound.”

Interest rates have fallen below zero before. Negative deposit rates have been used by a handful of smaller central banks in recent years, including Sweden’s, which cut its deposit rate below zero again in July after a 14-month experiment in 2009-2010 at the height of Europe’s debt crisis. Denmark returned to a negative deposit rate in September, though the cut was aimed at protecting its currency rather than stimulating growth. U.S. Treasury securities traded at negative yields during parts of the 1930s and 1940s, and Switzerland imposed negative interest rates in the 1970s as part of capital controls.

The ECB officials say more stimulus is needed to prevent a slide into deflation, or a spiral of falling prices that could derail the recovery.  The cut is part of a combination of measures designed to ensure price stability over the medium term, which is a necessary condition for sustainable growth in the euro area. It’s one way to try to reinvigorate an economy with other options exhausted. It’s an unorthodox choice that the U.S. Federal Reserve Bank and other peers have so far rejected.

The economy of the eurozone is grappling with a shortage of credit and unemployment near its highest level since the currency bloc was formed in 1999. The ECB has particular reason to use negative interest rates. The US Federal Reserve Bank (Fed) and the Bank of Japan have turned to large-scale asset purchases, known as quantitative easing, that create new money to fuel the recovery.

By reducing interest rates and thus making it less attractive for people to save and more attractive to borrow, the central bank encourages people to spend money or invest. If, on the other hand, a central bank increases interest rates, the incentive shifts towards more saving and less spending in the aggregate, which can help cool an economy suffering from high inflation.

In truth, the impact of negative interest rates is uncertain. Proceeding with this move underlines the ECB’s concern and the need for drastic measures to turn around the European economy. It sounds attractive in theory, but it could have unpredictable and unintended consequences. While negative interest rates are normally aimed at institutional investors, in the long-term they can have a detrimental effect on savers, if investors decide to recoup the costs of the rate by levying charges on consumers.

In theory, an interest rate below zero should lower all market rates, thus also reducing borrowing costs for companies and households. In practice, though, there’s a risk that the policy might do more harm than good. Janet Yellen, the Fed chair, said at her confirmation hearing in November 2013 that the closer the deposit rate is to zero, the bigger the risk of disruption to the money markets that help fund banks. A deposit rate cut could hurt banks’ profitability by lowering money-market rates, potentially hampering credit supply to companies and households and reducing banks’ incentive to lend to other financial institutions.

In Denmark, commercial banks aren’t passing on negative rates to depositors for fear of losing customers. When banks absorb the costs themselves, it squeezes the profit margin between their lending and deposit rates, and might make them even less willing to lend.

Imagine a bank that pays negative interest. Depositors are actually charged to keep their money in an account. A deposit rate below zero effectively punishes banks that have extra cash but are reluctant to extend loans to weaker lenders.

Banks are starting to charge their customers for depositing large amounts of euros, passing on fees imposed by the ECB, rather than paying interest. They said that the changing regulatory landscape has made it harder to eat the cost, as they might have in the past. The reversal from paying interest to charging it comes after the ECB started charging 20 basis points or two-tenths of a percentage point, in fees for funds parked at the bank.

Commerzbank AG was the first major lender in the eurozone to pass this negative interest rate policy on to its institutional clients when they announced it on November 20. Other major banks viz. Deutsche Bank, Bank of New York Mellon, Goldman Sachs, JP Morgan Chase have also decided to selectively pass on the negative interest rate policy.

The latest move by the banks is notable because so many of them are taking the step, giving customers fewer options for moving their money. With the global economy still fragile, negative rates remain a tool that banks could use. Only time will tell whether the outcome of negative rates will in fact be positive.

Masgouf for lunch

Subhash called me in the morning asking me whether I am interested for having masgouf for lunch today, then he would ask his department colleague Nadia to arrange for it at the Iraqi Hunting Club. I immediately consented for it as it’s been a long time that we enjoyed the Iraqi delicacy — Masgouf. It is a traditional Mesopotamian dish, consisting of seasoned, grilled carp. It is de facto considered the national dish of Iraq. Baghdad prides itself of making the best of the Masgouf.

Nadia placed orders for masgouf beforehand so that the fish would be ready by the time we go for our lunch. Cooking of Masgouf takes long time sometimes up to 3 hours depending upon the size of the fish. Generally when ordered, the carp fish is taken out of the water tank and killed by a quick blow onto the forehead with a small rod. It is then partially scaled, slit up the back, cleaned the guts out and flattened the bodies. After sprinkling sea salt onto the fish, it is carried over to a fire pit and propped on their sides against iron stakes plunged into the ash to roast against the flames. By roasting the fish vertically with the open side facing the fire, the oil seeps into the ashes, leaving salted, seasoned fish meat. The fish is cooked until most of the fish’s fat is burnt out, as the carps are typically fatty.

We went for our lunch after 3.00 p.m. We were joined by our a few other colleagues. The fish were yet to be well-cooked and crispy on the outsides. We waited for around half an hour. The fish were served on a big tray garnished with lime, slices of onion and pickles and served to us on the table after covering them by large khubz — flatbreads to keep the fish hot.

Masgouf was quite tasty. I think that it gets the extra taste from the smoke that goes into the flesh of the fresh fish while cooking it.

Thanks Nadia for arranging Masgouf lunch for us.

Our wedding anniversary 2014

It’s hard to believe that twenty-three years have passed already since Jeet and I were married on this day. I remember that day with mixed emotions still, for such a variety of reasons. But our wedding day was far from perfect and I’m the first to admit. There was curfew in the city of Varanasi when Jeet came to marry me. It was what I like to call ‘imperfectly perfect’ because despite the things we didn’t have, the difficulties that we faced, I married the one whom I love the most. He is my best friend.

As I get older, as my priorities shift and as I realise how important the small stuff is, any feelings of inadequacy I’ve ever had of not having a good enough wedding begin to wash away.

My husband is now far away — working in Baghdad while I am in Ranchi. He prefers to stay alone in Baghdad given the security situations there. But the distance hasn’t dented our relations, perhaps it has emboldened our love for each other.

It was very nice of Jeet to send me flowers, gifts and cake.

I was very happy this morning when I opened the door and the delivery man gave me a nice bouquet, cake carrying a nice message from my husband.

He also tweeted:

Today, as I look behind, I feel that I have everything I need. I feel and am happy. I am beyond blessed. Thanks Jeet for being with me always. I love you dear.

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A very happy anniversary to us!

IFC issues first Masala Bonds in London

International Finance Corporation (IFC), a member of the World Bank, issued a 10-year, 10 billion Indian rupee bond (equivalent to $163 million) to increase foreign investment in India, mobilizing international capital markets to support infrastructure development in the country. J.P. Morgan was the sole arranger for the bond.

IFC issued the bonds in London to leverage the city’s standing as a premier financial center. Issuances in overseas financial centres such as London give countries like India a chance to tap global investors for funding investment needs. The vast majority of investors are European insurance companies.

The IFC Masala bonds are a boost for Indian rupee-denominated issuances as listing on LSE will provide visibility, and set a benchmark for yields in future issuances. It could also increase demand for similar products later as liquidity of these bonds goes up. This also shows the confidence of international investors in the Indian economy and its currency.

The bonds were issued under IFC’s $2 billion offshore rupee program with a AAA benchmark rating. The bonds yield 6.3%. Given the IFC’s triple A rating, the yield is almost two percentage points lower than the rate at which the government of India itself can raise money.

The “Masala bonds” mark the first rupee bonds listed on the London Stock Exchange. This is the longest dated offshore issue in the rupee markets so far at 10 years. Proceeds from the offering will support a forthcoming infrastructure bond issuance by Axis Bank, which plans to raise Rs 6,000 crore by March 2015.

Rupee-denominated assets have become more attractive after the Indian currency rallied 2.3% in the past year to 61.69 per dollar, the best performance among emerging-market peers. International investors have plowed a record $23 billion into onshore rupee debt so far in 2014, exchange data show. Bond risk for Indian firms fell this year. The average cost of credit-default swaps protecting the debt of eight Indian issuers dropped 128 basis points, or 1.28 percentage point, to 209, according to data provider CMA.

Earlier this year, IFC sold four separate “Maharaja” bonds worth about $100 million on September 23, 2014. The AAA-rated IFC Maharaja Bonds are listed on the National Stock Exchange (NSE). This was the first time in a decade that an international financial institution had raised onshore debt in Indian rupee.

Foreign bonds have a variety of nicknames: A bond sold by a foreign company in the United States is known as a Yankee bond; a bond sold by a foreign firm in Japan is a Samurai and pound sterling-denominated bonds which are issued by non-British borrowers in the British market are called Bulldog bonds.

The “masala” bond is the Indian counterpart of the “dim sum” label applied to Chinese offshore issues, which the IFC has also pioneered. Bonds issued inside India are known as Maharaja bonds. IFC has named these “Masala” bonds as “masala” is a globally recognized term that evokes the culture and cuisine of India.

Zerde — a Turkish dessert

Today, Ibrahim brought zerde to our office. Zerde is a Turkish dessert, a sort of sweet pudding from rice that is colored yellow with saffron. It is a festive dish popular at wedding, birth celebrations and during the sacred month of Muharram. Zerde differs from rice pudding insofar as it is prepared with water instead of milk.

Had zerde in morning. Thanks @ibrahimaku. It was nice and sweet.

A photo posted by Indrajit Roy Choudhury (@iroychoudhury) on

There’s a rice pudding with a similar name – zarda in South Asia, which is made by boiling rice with orange/yellow food coloring, milk and sugar, and flavoured with cardamoms, raisins, saffron, pistachios or almonds. The name Zarda comes from Persian and Urdu word — ‘zard’ meaning ‘yellow’, hence named since the food coloring added to the rice gives it a yellow color. Zarda is typically served after a meal. In India and Pakistan also, zarda is often served in weddings as dessert.

Thanks Ibrahim, it was nice and sweet.

The tradition of Vedic chanting

The Vedas comprise a vast corpus of Sanskrit poetry, philosophical dialogue, myth, and ritual incantations developed and composed by Aryans over 3,500 years ago. Regarded by Hindus as the primary source of knowledge and the sacred foundation of their religion, the Vedas embody one of the worlds oldest surviving cultural traditions.

The oral tradition of the Vedas consists of several pathas, “recitations” or ways of chanting the Vedic mantras. Such traditions of Vedic chant are often considered the oldest unbroken oral tradition in existence, the fixation of the Vedic texts (samhitas) as preserved dating to roughly the time of Homer (early Iron Age). The tradition of Vedic chanting is on UNESCO’s List of the Intangible Cultural Heritage of Humanity.

The Vedic heritage embraces a multitude of texts and interpretations collected in four Vedas, commonly referred to as books of knowledge even though they have been transmitted orally. The Rig Veda is an anthology of sacred hymns; the Sama Veda features musical arrangements of hymns from the Rig Veda and other sources; the Yajur Veda abounds in prayers and sacrificial formulae used by priests; and the Atharva Veda includes incantations and spells. The Vedas also offer insight into the history of Hinduism and the early development of several artistic, scientific and philosophical concepts, such as the concept of zero.

Expressed in the Vedic language, which is derived from classical Sanskrit, the verses of the Vedas were traditionally chanted during sacred rituals and recited daily in Vedic communities. The value of this tradition lies not only in the rich content of its oral literature but also in the ingenious techniques employed by the Brahmin priests in preserving the texts intact over thousands of years. To ensure that the sound of each word remains unaltered, practitioners are taught from childhood complex recitation techniques that are based on tonal accents, a unique manner of pronouncing each letter and specific speech combinations. The insistence on preserving pronunciation and accent as accurately as possible is related to the belief that the potency of the mantras lies in their sound when pronounced.

Although the Vedas continue to play an important role in contemporary Indian life, only thirteen of the over one thousand Vedic recitation branches have survived. Moreover, four noted schools in Maharashtra (central India), Kerala and Karnataka (southern India) and Orissa (eastern India) are considered under imminent threat.

Via: UNESCO

Annakoot — Mountain of Food

Annakoot — Mountain of food — is celebrated in observance of the episode in Sri Krishna’s childhood, in which He gave protection to the cowherd clan of Vrindavan from the wrath of Indra and humbled Indra in that process. The cowherd, their wives, children and cattle jubilantly surrounded Sri Krishna. They were awed by His superhuman accomplishment and celebrated Sri Krishna’s feat with a sumptuous feast. Thus began the tradition of Annakoot.

Gaudiya Math (pronounced as Mutt) in Allahabad also celebrates Annakoot. Baba — Jaya’s father — planned to visit the temple at the Gaudiya Math with all the family members for the worship on the day of Govardhan Puja. It’s the next day after Diwali. This year, it’s celebrated on October 24. Baba is a regular visitor at this ashram.

The Annakoot or the Govardhan Puja celebrations take place on the first day of the month of Kartik which is the first month of the Hindu new year — Vikrami Samvat. The Monsoon season has come to an end and new harvest has been brought in from the fields and grains and cereals are plentiful. To thank the Lord for the good year that has just ended, plenty of delicious foods are prepared and offered to the Supreme Lord.

According to legends, Lord Krishna taught people to worship the Supreme Controller of nature, God, specifically Govardhan, as Govardhan is a manifestation of Krishna, and to stop worshiping the God of Rains, Lord Indra. For Annakoot, a mountain of food is decorated symbolizing Govardhan mountain said to be lifted by Lord Krishna to save the people from the wrath of Lord Indra, the demigod in charge of rain.

Annakoot

Annakoot

The devotees gathered in the temple, listened to religious discourse given by the swamiji maharaj and sang kirtans. A communal worship in the form of an Aarti was performed.

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We all sat on the floor of the temple hall with other devotees in rows and enjoyed the Annakoot prasad, and bhog offered to Lord Krishna. We prayed to Lord Krishna and returned home. Baba was very happy that we all family members went to the temple and had the prasad and bhog.

Annakoot at Gaudiya Math

A photo posted by Jagrata Roy Choudhury (@jagrataroychoudhury) on

Dining at Alfresco, Kolkata

On 16 October 2014, I came to Kolkata with my parents for my mom’s health check up at Quadra Medical Services, Hazra Road.

My dad booked at Great Eastern Hotel in Dalhousie for our stay tonight. It’s the oldest five-star hotels in all over Asia and its establishment dates back to 1840s during the East India Company rule in Kolkata. The hotel has been in top charts since then. The location of the hotel is very good as it’s in the heart of the main business district of Kolkata. All the big and reputed companies have their establishment around.

The hotel is quite huge with three separate restaurants. One of them is on the lobby named Alfresco, which is a multi-cuisine restaurant accompanied with a café. The hotel is now managed by Lalit group.

We walked in there for our dinner. Well it is a very beautiful restaurant. As the name literally suggests ‘outdoor’, all the arrangements are like sitting in the outdoor porch or a tent with circular glass cane table and cane chairs complemented with sweet chirping of birds making you feel sitting at a garden in the open. The ambiance made us feel good. My mom was tired of the journey started feeling refreshed there.

We had a hard time discussing the menu since there were a lot new dishes on the menu card. Finally we settled for ‘mushroom cappuccino’ soup for my dad and me and my mom had ordered for hot and sour soup as she doesn’t like mushrooms. As the name mushroom cappuccino soup it was served in a cappuccino cup, yah truly in a cappuccino cup with cookie shaped baked breads! The innovative cappuccino was a rich, earthy soup made with mushrooms and served exactly like cappuccino. The froth and color was very much similar to the cappuccino that we generally have at the café. The presentation was awesome. The innovation was really appreciable.

Having dinner at Alfresco

A photo posted by Indrajit Roy Choudhury (@iroychoudhury) on

Along with that they served some breads and green salad. Also we ordered for chicken Caesar salad which was equally delicious.

But for us, the star dish for the dinner was the traditional Bengali dish: ‘posto murgi’, which we ordered in the main course. The concept of posto (poppy seeds) murgi (chicken) is truly awesome. The idea of posto with some non-vegetarian item is really novel and a peculiarity of Bengali cuisine.

Posto murgi — chicken cooked in poppy seed curry

A photo posted by Indrajit Roy Choudhury (@iroychoudhury) on

The taste of the “posto murgi” — chicken in poppy-seed paste — was even more delicious than I had expected. Along with that we had preserved breast chicken which was chef’s special. It was a chicken steak along with steamed omelets. We had fresh lime soda (sweetened) before leaving the restaurant. The food was so great that I would say that this place should be visited once again for enjoying the foods here.

I’m loving it!!!

Ugrasen ki Baoli — an ancient step-well in Delhi

My dad has come to Delhi for attestation of some documents by Iraqi embassy. So, mom and I also accompanied him to Delhi from Ranchi.

I went with my dad. Mom was resting at the hotel. After depositing the document at Ministry of External Affairs for their attestation before it’s attested by the Iraqi embassy, Dad & I went for a walk from Patiala House towards Connaught Place. We then walked into the historic Ugrasen ki Baoli.

Ancient Indians used to build water temples as well as earliest forms of step wells and reservoirs.

Ugrasen ki Baoli (a.k.a. Agrasen ki Baoli) is one of such step wells in Delhi.

It is designated a protected monument by the Archeological Survey of India (ASI). It’s a 60-meter long and 15-meter wide historical step well on Hailey Road near Connaught Place in New Delhi.

Baoli or baori is a Hindi word (from Sanskrit vapi, vapika). Water temples and temple step wells were built in ancient India and the earliest forms of step well and reservoir were also built in India in places like Dholavira as far back as the Indus Valley Civilisation.

Although there are no known historical records to prove who built Agrasen ki Baoli, it is believed that it was originally built by the legendary king Agrasen during the Mahabharat epic era and rebuilt in the 14th century by the Agrawal community which traces its origin to Maharaja Agrasen.

From the core of the well. It’s now closed to avoid accidents. It had water before. My dad also saw water in this Baoli.

The Baoli is a unique blend of architecture with an impressive design known to have existed centuries ago. The red stone walls of the Baoli, dressed with a series of arched structure are grim and desolate, but still beautiful.

The Baoli is made up of a series of superimposed arches supported on piers or columns. It consists of 103 steps made of red stones.

The Baoli had water till recent times, but now it has dried up and one can see the bed of the reservoir.

It is well known for the pigeons and bats residing in the lofty places of the reservoir.

Bed of the reservoir

It is a cool and silent place in the heart of the capital. The silence deepens as one moves to the bottom of the stairs, and the gradual increase in the gurgling sound of pigeons, and squeaky chatter of bats echoing off the stone walls makes this place creepy.

Agrasen ki baoli

A photo posted by Indrajit Roy Choudhury (@iroychoudhury) on

The mystic architecture is definitely worth a visit.

India Gate at night

India Gate is the pride of Delhi. An imposing structure, the gate was built in memory to the of the 90,000 Indian soldiers who laid down their lives during World War I.

The India Gate is a war memorial located astride the Rajpath. 13,300 servicemen names, including some soldiers and officers from the UK, are inscribed on the gate.

The India Gate, even though a war memorial, evokes the architectural style of the triumphal arch.

India Gate at night

A photo posted by Indrajit Roy Choudhury (@iroychoudhury) on

In 1971, following the Bangladesh Liberation war, a small simple structure, consisting of a black marble plinth, with reversed rifle, capped by war helmet, bounded by four eternal flames, was built beneath the soaring Memorial Archway. This structure, called Amar Jawan Jyoti, or the Flame of the Immortal Soldier, since 1971 has served as India’s Tomb of the Unknown Soldier.

During the night, India gate is dazzled by floodlit and the fountains nearby are lit up with colored lights. People throng the lawns around the India Gate in the night.

We went there yesterday to enjoy the splendor of India Gate.

There are many vendors selling tea, ice creams, chanachur etc.

We spent sometime there and returned after having dinner at Pindi Restaurant in Pandara Road, New Delhi. We had lovely chicken dishes and then returned to our hotel.

Dinner with @judhajitr and @jagrataroychoudhury at Pindi in Pandara Road, New Delhi

A photo posted by Indrajit Roy Choudhury (@iroychoudhury) on

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