.........Chaudhuri's views contradicts 31 of 32 analysts in a Bloomberg News survey who predicted no change to the benchmark rate, while 29 of 30 expects the CRR to remain unchanged at four per cent. The decision is due at 11 am on Tuesday..............
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.
Tuesday, July 30, 2013
Not My Baby, Says the RBI; It is Right
The
Reserve Bank of India (RBI) has given clear indication that monetary
policy has to remain cautious in the face of financial risk, unbridled
consumer price inflation and a still-high current account deficit (CAD).
While the RBI might stoop to administer emergency CPR to the economy
gasping for breath, it would prefer to leave treatment for sustained
recovery to the government. In its review of macroeconomic and monetary
developments, the RBI makes it very clear that structural reforms to
contain the CAD and fiscal adjustment to prune subsidies and step up
investment are what the economy requires, and these depend on government
action.................
Read - ET
Read - ET
Recent liquidity steps 'at best' breathing time: RBI
The Reserve Bank of India (RBI) has sounded a hawkish note on the eve of the monetary policy review by saying the recent currency depreciation has posed upside risked to both wholesale and consumer price inflation. In the Macroeconomic and Monetary Development report released today the central bank said it will actively manage liquidity to reinforce monetary transmission that is consistent with growth-inflation balance.....................
RBI's emergency medicine: What does history tell us?
There are differences between now and 1997-98, but sufficient similarities too for us to draw lessons from the past, about the recent RBI’s policies to strengthen the rupee. RBI's goal could be to reduce volatility, and not set a level for the rupee; it would provide the time needed for the economy to adjust to the weaker rupee,...........
Subbarao's win against inflation is growth's loss
.............Subbarao will surely say achieving any result from a monetary policy in an integrated global world today is easier said than done..................
Chidambaram says price stability cannot be the only mandate of RBI
............."All over the world thinking in changing. The mandate of a central bank must not only be price stability. The mandate of central bank must be seen as part of larger mandate which includes price stability, growth and maximising employment,"............
Measures to stabilise rupee must not hit growth: Rajan
Hours after the Reserve Bank of India said that stabilising the battered rupee is its priority, Chief Economic Adviser to Finance Ministry Raghuram Rajan said the RBI’s action in this regard must not hurt growth too much....................
Ab tak 56 & return of decoupling
...........This bolstered the minister's vocal push for a hand of support for growth from the Reserve Bank of India (RBI) by cutting rates. Though RBI resisted initially, it finally had to give way. The minister also took steps to attack speculative investments in gold and real estate, often targets of the Street for its own woes. Empowering Sebi to attack ponzis was another key move............
Right about the rupee
......What the RBI needs to understand is that without correcting the unprecedented galloping inflation, it cannot successfully correct depreciation of the rupee.................
Focus On Re, Growth A Liability
.........."The priority for monetary policy now is to restore stability in the currency market so that macro-financial conditions remain supportive of growth. (However) this strategy will succeed only if reinforced by structural reforms to reduce the CAD and step up savings and investment,"..............
Only Reforms Can Put Economy on Track: RBI
The
effect of the Reserve Bank’s recent interest rate increase and
liquidity tightening to bolster the rupee will fizzle out if the
government does not move to reduce external trade imbalances, a central
bank policy review says. It will be a hard road to economic recovery
as business confidence is low, and rising global interest rates may
throw the financial markets out of gear, says the June quarter
Macroeconomic and Monetary Developments review by RBI...........
Central Bank Can’t Afford to Frighten Equity Investors
......Those
were also the days when the government could privately place bonds with
RBI and keep its borrowing cost well below market rates. Not any more;
today, the market will demand a competitive rate from the government
similar to what it would charge any other borrower..........
Read - ET
Silver linings amid economic gloom: JP Morgan’s Morparia
....... In an interview on Thursday, she said the recent reforms initiated by the government will continue till the elections because policymakers have shown a rare resolve to address growth and investments. Morparia also touched on issues ranging from the Reserve Bank of India’s recent policy measures to support the rupee, to J.P. Morgan’s plans for India. Edited excerpts:................
Empowering SEBI the right way
..........The Centre’s expectation is that a suitably empowered regulator would nip such financial misadventures in the bud. That might still be a tall order given that most recent scams have thrived by exploiting differences in the regulatory jurisdictions of SEBI and the RBI. The Indian financial code which has been drafted to address inter-regulatory issues has not found universal acceptance and will take time before it is adopted...........
Burden of gold
In recent times, especially in the light of a widening current account deficit, Indians' obsession for gold has come under fire from various quarters. The government and the Reserve Bank of India have taken measures to clamp on this. A look at the frustration of earlier policy makers in this regard:............
Rana Kapoor wants rates unchanged
It could well be one of the most critical monetary review policies by the Reserve Bank of India (RBI) on Tuesday as companies and industry bodies wait anxiously for the apex bank’s directives. Rana Kapoor, managing director and chief executive officer Yes Bank and president of Assocham, said a status quo on policy rates would be a positive message by the RBI indicating that lending rates would ease in the near future and the recent measures undertaken by it were only aimed at the currency market.............
YES Bank can’t be family business: Rana Kapoor
YES Bank chairman and co-founder Rana Kapoor recently saw the denial of board seat to his niece snowball into a controversy. But Kapoor, who has donned the hat of industry chamber Assocham’s president, tells TOI that the bank he cofounded with his brother-in-law Ashok Kapur can’t be run as a family business and his children will stay away. Excerpts: ........
Read - TOI
Read - TOI
Monday, July 29, 2013
We are paying dearly for ignoring savers - Dr.S.S.Tarapore
........The government should give ‘ closed door’ guidance to the RBI to use all its instruments, without constraints, to ensure that the Consumer Price Index ( CPI) inflation comes down from 10 per cent to 5 per cent by early 2014. Again, the RBI needs to be assured that it need not expend its forex reserves in defence of a particular exchange rate. Furthermore, it should not shore up the rupee on the pretext that it is controlling volatility. It needs to be recognised that a massive outflow of capital from the EMEs is inevitable in the next 9- 12 months and India should conserve its forex reserves. What is important is that the topmost policy decision- takers should silence their guns attacking RBI policies. When the RBI took measures on July 15, 2013, the government immediately said that this did not portend monetary tightening!................
From where did poverty go? - Dr.Subir Gokarn
.......Before getting into the numbers, I want to address two misconceptions that have made their appearance in the public debate. First, many people seem to believe that the reason why the poverty rate is what is because the bar - the poverty line - has been set so low. Of course, the level of the poverty line is subjective and a country can decide for itself where to set it. Different lines would obviously generate different poverty rates. However, in measuring the change in poverty over time,...........
Poor in US, rich in India
The media is accused of creating a controversy out of nothing by asking tough questions to policymakers and then quoting them selectively. A similar attempt was made with RBI Deputy Governor KC Chakrabarty. Asked whether the new poverty line was fair when inflation was running high, Chakrabarty cleverly dodged the question saying it was a relative measure. “Someone can be poor in the US but rich in India,” he said knowing full well that few journalists would understand the concept of purchasing power parity and its relevance in poverty measurement.
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