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The very purpose of VITALINFO is to provide a platform for wider dissemination of updated information related to and happening of events in and around RBI.
Wednesday, August 1, 2012
Empanelment for promotion to the post of Executive Director
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Message from Mint Road: Inflation still enemy number one
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| Reserve Bank of India (RBI) Governor D Subbarao (C) along with Deputy Governors, left to right, Anand Sinha, K C Chakrabarty, Subir Gokarn and H R Khan during RBI’s 1st Quarter monetary policy review meeting in Mumbai on Tuesday |
.....................“The primary focus of monetary policy remains inflation control in order to secure a sustainable growth path over the medium-term. While monetary actions over the past two years may have contributed to the growth slowdown – an unavoidable consequence – several other factors have played a significant role. In the current circumstances, lowering policy rates will only aggravate inflationary impulses without necessarily stimulating growth.”........................
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RBI's stance on low growth will weigh in inflation: Gokarn
Why Subbarao is the last man standing in a world gone mad
Subbarao’s credibility rises with firm policy stance
.....“Nail-biting global economic conditions have compelled central banks in advanced and emerging economies to cut rates, and moderate domestic economic growth has drummed up pressures on the RBI to act. However, the RBI kept cool and stayed focused on its objective, which helps cement its credibility.”........
RBI policy reflects cautious stance: Montek
......."As far as looking ahead is concerned, the RBI has taken a slightly cautious stance because of its concerns that inflation is sticky. I have no difficulty with that," ............
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RBI decision to retain interest rates 'right move': Kaushik Basu
Describing the RBI decision of not cutting key interest rates to check price rise as the "right move", outgoing Chief Economic Advisor Kaushik Basu on Tuesday expressed hope that inflation would come down to below 7% in September. "My expectation is that inflation in the month of September will go below 7 per cent," he said while commenting on the RBI decision to keep interest rates unchanged for the second time in a row.............
Read - DNA
RBI POLICY: Rangarajan says right balance struck by holding repo steady, cutting SLR
"The reduction in SLR will provide additional liquidity to the banking system and it will also prevent to some extent the crowding out,"..........
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If I G Patel had been finance minister...
What sort of finance minister would the distinguished policy-oriented economist Dr I G Patel have made? This is an interesting counterfactual proposition worth pondering in this review, since he was the first choice of Prime Minister P V Narasimha Rao for this position in 1991. If he hadn’t declined the offer, Dr Patel would have been the architect of India’s reforms............
RBI takes a balanced view
.....The central bank has taken a balanced view of the existing situation and refrained from making changes in the policy rates and the Cash Reserve Ratio. It has correctly articulated its stance by saying that the management of inflation is its primary focus in the formulation of monetary policy........
No move to ban banks from selling gold coins: RBI
Contrary to speculation that the Reserve Bank may ban banks from selling gold coins, Governor D Subbarao today said there was no such proposal at present as the proportion of gold coin sale by banks was very small. “The answer is no! because gold coins themselves are a very small proportion of the total import of gold,” Subbarao told reporters at the customary post-policy interaction, when asked if the RBI is contemplating such a ban.............
RBI has made a very prudent move: Sajjid Chinoy, JP Morgan
..... It was very prudent. The risk to inflation has been on the upside and that is never an environment where you want to stoke inflationary expectations even further by cutting rates. We have to accept the fact that growth is going to slow a below trend, but this is not fundamentally a monetary problem. This is now a real sector problem over which the RBI has very limited leg room...........
Why RBI’s fears about India’s growing current account deficit are misplaced
.... exposition of the risk-averse view came recently from YV Reddy, former RBI Governor, at the annual NCAER-Brookings India Policy Forum. He said the government viewed a CAD of 2.5% of GDP as a safe average. Obviously the CAD could fluctuate around this. Reddy said the international climate had deteriorated greatly in the last year, necessitating a new look at safety limits. The world economy was in turmoil, with the eurozone in dire straits and slowdowns across the globe. Financial flows and currency rates seemed far more volatile than earlier. Many Indian companies had difficulties raising foreign loans......
RBI worried about growth, inflation, ‘twin’ deficits: Ten facts
The Reserve Bank of India’s statement on the first quarter monetary policy highlights concerns on growth, inflation and deficits in that order. The statement issued on Tuesday has words like ‘growth’ 67 times, ‘inflation’ 58 times and ‘deficit’ 16 times............
A textbook response
......banks can lower lending rates only if their cost of deposits comes down (difficult when the public has alternative savings avenues in gold or real estate) or they are able to borrow cheaper from the RBI. By turning down the latter option, and also keeping the CRR unchanged, the RBI has basically made it impossible for banks to cut rates........
SLR cut expands repertoire of policy tools
RBI has developed a knack in bowling googlies at market analysts, using “gotcha” manoeuvres to confound. And, ex post, these measures are the sort that make you go “I should have thought of that and seen that coming”................
Read - FE
DON’T READ TOO MUCH INTO SLR CUT
.........Why did the Reserve Bank of India (RBI) cut banks’ statutory liquidity ratio (SLR), or the percentage of deposits that banks are required to invest in government bonds? One explanation could be that RBI governor D. Subbarao is extremely serious about the central bank’s fight against the government’s fiscal profligacy. RBI has been repeatedly stressing the limitations of monetary policy and wants the government to get its act together to fight a persistently high inflation and ensure sustainable growth. Cutting down SLR is another salvo as it will .........
On hold for all the right reasons
Reserve Bank of India’s (RBI) policy review on Tuesday continued from where it had left off in June: holding rates on inflation concerns. This time it wasn’t as dramatic a decision as in June when the market had completely convinced itself that a rate cut was cast in stone. Rather with fears of inflation turning rabid on higher food prices given the weak monsoon, the market had resigned itself to no rate cuts this time............
Monetary policy options becoming limited
Expectations of economists from the July monetary policy of the Reserve Bank of India (RBI) had been minimal. The message in the June policy and in the speeches of the RBI governor that followed was clear and forceful: inflation is well above RBI’s comfort level, at this juncture interest rate cuts are unlikely to propel growth and fiscal consolidation is a pre-condition for monetary policy easing. The RBI statement on Tuesday reiterates these three messages and this consistency, to us, is one of the key takeaways from the July policy.............
Of growth, inflation, rates and internal security
......So, the economic question narrows down to a choice between which is worse: high inflation rate or low economic growth. By and large economists are arguing for keeping interest rates high until the government fixes its fiscal backyard in a wider context of global uncertainty. Why should RBI do the government’s job, they ask. Besides, if the inflation rate is allowed to skyrocket, it will have repercussions on internal security, as food prices get out of the hands of the poor. There will be food riots, they argue. The good news here: no government likes a high inflation rate, so the issue will get political backing......
A let-down for industry, say chambers
........Reacting to the monetary policy review by the Reserve Bank of India on Tuesday, Assocham said here that industry was disappointed with the key policy rates being unchanged..........
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Real estate industry unhappy over RBI's policy
Real estate firms and property consultants today expressed disappointment over RBI's decision to keep rates unchanged and said the sector urgently needs cut in interest rates to boost housing demand. "There is once again disappointment from RBI. There was no change in the rates in previous policy announcement and the real estate sector was expecting a rate cut this time," said Lalit Jain, President of the apex realtors' body CREDAI. "We don't see any positive policies from government which will boost the real estate sector and economy as well," he added..........
CBDT extends I-T returns filing date to 31st August
The Central Board of Direct Taxes (CBDT) has extended the due date for filing income tax (I-T) returns for assessment year 2012-13 to 31st August from 31st July. This means, you can file your I-T returns for FY2011-12 till 31st August....................
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RBI to review new rules for priority sector lending
.......“Evidently, there are still some open issues on priority sector lending.... I think some of the suggestions were quite reasonable. We decided that in the next 15 days, there will be a meeting at the operational level and (another) meeting at the bank chairmen level. It is not clear what we will change but, certainly, we will have an open mind,” Subbarao told reporters after the first quarter review of monetary policy for 2012-13........
RBI inks MoUs with UK, Norway regulators
....The Reserve Bank has signed memoranda of understanding with regulators of UK and Norway among others to promote greater co-operation and sharing of supervisory information. The MoU with the Financial Services Authority (FSA), UK was signed by RBI executive director P Vijaya Bhaskar and Andrew Bailey, Director of FSA .......
Now, exporters to retain 100% forex earnings
...... its quarterly monetary policy review on Tuesday, RBI has henceforth allowed credit of 100 per cent foreign exchange earnings to be kept in the EEFC accounts subject to the condition that the sum total of the accruals in the account during a calendar month should be converted into rupees on or before the last day of the succeeding calendar month after adjusting for utilisation of the balances. Presently, exporters can retain only 50 per cent of the export proceeds in EEFC accounts......
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