02/01/2017 Asia Business Report

Now on BBC News all the latest business news live from Singapore.

With India still reeling from the government's demonetisation drive,

Prime Minister Narendra Modi has plans for a new India. And slowing

the flow, as cuts take effect in production, we ask if it will take

oil prices out of the year-long slump. Good morning, and Happy New

Year. Welcome to Asia Business Report live from Singapore. In a New

Year is addressed to the nation the Indian Prime Minister Narendra Modi

announced measures to help those hardest hit by the cash ban he

imposed a month ago. It is his first televised address since he announced

the controversial decision. The move caused panic across India and many

ATMs and banks are still short of new cash.

More than 50 days after the government withdrew 86% of currency

notes in circulation, India is still reeling under the impact of that

decision. New notes had been introduced but the pace at which

they are coming to the system is low and the shortage is affecting the

informal sector which generates 80% of employment in India. And so job

losses have been mounting, farmers have been finding it difficult to

access money to pay for seeds and labourers and so in an attempt to

soften the blow and help those worst affected, the Prime Minister

announced a number of measures in a televised speech in New Year's Eve,

offering discounts on interest rates for small home loans, incentives for

small businesses, waivers for farmers who took loans to sow crops

and incentives for pregnant women and the elderly, and measures to

encourage people to make digital payments rather than use cash. He

defended the government decision to withdraw currency notes and said it

would root out corruption and illegal cash holdings called black

money in India. In his speech there were no details of how much black

money has been unearthed so far. Analysts have been asking how the

government wants to pay for the handouts. This year India has

committed to narrowing the gap between how much it spends and how

much it earns. In less than a month from now the national budget will be

announced and maybe they will have some idea of how the government is

managing India's finances. Well, the rupee may have stolen the

spotlight at the end of 2016 but through the year almost all major

currencies were on a rollercoaster ride of their own. Our correspondent

looks at where they will be starting off in 2017.

At the start of 2016 it was all about the Japanese yen. The hardest

working central banker in Asia did everything to weaken the yen but

nothing, not even negative interest rates, worked. 2016 everyone said

would be tough for the yen and as it was going on the Chinese one was

falling. As the economy became uncertain Chinese companies and rich

individuals sent more cash overseas. Then came the first big shock, the

vote for Brexit. The Sterling slumped against the US dollar after

the UK and expected leave voted to leave the EU in June. It has lost

about 15% of its value. All that uncertainty led to more money

flowing into the safe haven Japanese yen which kept rising and all he

could do was wring his hands. All this while the Chinese yuan kept

falling. And then trumped inflation hit, winning the White House, so the

US dollar soared, which was good for the US dollar but bad for emerging

market currencies like the Malaysian ringgit which hit lowest level since

1998's financial crisis. Through it all the Chinese yuan kept falling

even as the government pumped cash to prop it up. So, where are we at

the beginning of 2017? Well, the US dollar is that it strongest level in

years and looks set to stay that way. The British pound has lost a

fifth of the value since Brexit, which might be a new normal, and the

Japanese yen, what negative interest rates couldn't do Mr Trump did and

finally the yen is weakening. What about the Chinese yuan? It is

continuing a slow march downwards against the US dollar, for now at

least. Because of the falling yuan, China

has increased scrutiny of people buying foreign money. The foreign

exchange regulator said as of one January people converting yuan into

foreign currencies will have to provide more information on why they

are doing so. Currently people can exchange the equivalent of $50,000 a

year. Authorities are stepping up punishment for any illegal money

outflows. The New Year also marks the start of

production cuts by the world's biggest oil producers in an unusual

move. Members of OPEC and other oil producing countries are slashing

crude oil output by nearly 1.8 million barrels per day. Will the

agreement stick, and what impact will it have on oil prices? I put

that question to a resource analyst from Sydney.

Certainly when you look at the commercial decision that OPEC made

late last year there was one difference we have seen compared to

all the other decisions they have made and never followed through with

and that is that they bought in outside non- OPEC members, so we

think that gives this opportunity for OPEC and non- OPEC members to

ensure that going forward we will see the production cuts of about 1.8

million barrels stick more so than we have seen in any other time than

in OPEC history. What about Russia? Some seem sceptical it will stick to

the cuts, at which it hasn't agreed to in 15 years. They will pull out

300,000 barrels per day. If you look at the broader production of a are

significantly a big producer, in the ten millionplus arena, so 300,000

barrels is fairly small. Given they have the advantage of higher prices

on the massive amount of production they would still be producing, we

think they will certainly cap 300,000 barrels. If you look

overall, we believe the market is in a surplus of over 1 million barrels,

so cutting out 1.8 will reduce the market from a surplus to a deficit,

and that allows for some creeping of members either cheating or perhaps

US production to increase over the course of 2017. Oil prices rose

since the announcement, double of the load from a year ago. What is

your outlook for the price is? If we look at 2017 we think we will see a

moderate rise in oil prices probably for WTI of $65 - $75 at the end and

four Brent crude, $67- $77, so we see modest increases because of tail

winds and we believe some strong headwinds. The massive inventory

that still hangs in the US of 480 million barrels plus will act as a

headwinds and we suggest we will see US production increase in. There is

no Jetson style flying cars or Star Trek style teleportation yet but

this year's Consumer Electronics Show in Las Vegas will showcase a

huge range of new innovations, one of which is a virtual reality booth

for people to play videogames without having to a headset. Chris

Fox has a look. I am moving forward, I have to shoot

that, how can I do that? Oh, wow. This is surprisingly scary. I have

walls and pins coming at me. Oh, I have to avoid the dogs now. I am

really scared of dogs, so this isn't fun. Whoever designed this is very

sadistic. Everyone is talking about virtual reality, why is this version

better? This is totally different usage because you are free to move

and you don't have any wire. You can still see your body. It means that

you are not unconnected from reality. Will people pay to use our

game like this at a cinema or entertainment complex when they can

do virtually he on their phone? This is a very different experience

because in this set up we re- the player to move, which makes

something possible for sports -- require the player to move. We can

measure the difference for the people playing. We use this

technology where it is more relevant, you need to move, you need

to play, you need a fast set up, if you have the glasses you just put

them on. A centuries-old tradition of sending new years cards into

Japan gets a modern twist. Let's take a look. We will be back in the

next hour.