Today’s English lesson is related to the current shortage of risk capital in India. Read the paragraph below and pay attention to the bolded words. We will explain those later on. The paragraph is taken from this article: Foreign Capital Helps Ease India’s Credit Drought.

“With the economy battered by coronavirus, risk capital has dried up in India. In the past six months assets in credit-focused mutual funds, which play a crucial role as buyers for AA- to A-rated bonds, have declined from $13bn to $4bn.

Lending by commercial banks, burdened by dud loans even before the pandemic, has withered. Thankfully, for some companies this domestic dry spell is being offset by a stream of foreign capital.”

Source: The Economist 03/10/2020

This paragraph is full of useful words. The first one was used in the title: Drought. Drought refers to a lack of rainfall that leads to a shortage of water.  It’s used metaphorically here, so instead of a shortage of water, saying there is a credit drought means that there is a shortage of financing.

The next word is battered. This comes from the verb “batter”, and the author is using it here in the passive voice: “With the economy battered by coronavirus…” Well, let me tell you, “batter” is a violent little word. Batter means to hit something repeatedly with hard blows, so the sense here is that India’s economy is under pressure from coronavirus. It is being hit, and badly.

Dried up is next. The phrase was “Risk capital has dried up” in India. This goes back to same lack-of-water metaphor that we saw in the title with drought. To dry up means to dehydrate. The writer is saying that risk capital has evaporated, so there is much less of it now than there was before.

Then you heard “AA- to A-rated bonds”. Now I know that you recognize these definitions of investment grade and you know what they represent, but I just wanted to make the point that they are spoken like this: “double a” and “single a”.

Next, came the verb burden, as in “burdened by dud loans”.  Burden in this context means being loaded down with something heavy. Imagine that I am carrying a lot of weight. I’d be burdened. And “dud loans”? Well, something is dud if it doesn’t work well. So, these are bad loans, or non-performing loans. 

The last word today is easy, but important: stream, as in “a stream of foreign capital”. A stream is a small, narrow river, so a stream means a flow of something.  Once again, you can see the use of water metaphors to talk about money and financing in English.

By the way, you can use stream as a verb, too. You could say for example: “When the situation improves, credit will stream into the country”. So, as a noun, “a stream of capital”, or as a verb “capital streams into the country”.

Well, that’s all for this lesson. I hope that you enjoyed it and learned something new! If you did, please subscribe to our newsletter below.

I’ll be back with more English lessons for economists soon.

Here is a link so you can read the entire article:
https://econ.st/38ubnJI

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