Reserve Bank of India (RBI) Governor D Subbarao, often criticised for being "behind the curve", took market players and his critics by surprise.
The rupee is being driven into a vicious circle.
The local currency had lost 119 paise in the past five sessions on rising worries over current account gap and fears that withdrawal of US stimulus will hit inflows from overseas.
In his new role, Subbarao will take part in various activities at NUS Business School, the Institute of South Asian Studies and the Monetary Authority of Singapore.
The windfall from RBI may be used to trim borrowing, help fund Rs 3.3 lakh crore capex plan, capitalise banks and provide fiscal stimulus to some stressed sectors, experts and economists said.
This time the all-powerful interest-rate setting panel, whose constitution was notified by the government on Thursday, will take call on interest rate. But that's not the only change. The Reserve Bank of India has also decided to change the timing of announcement of its policy review, due next Tuesday, to mid-afternoon.
A staunch defender of demonetisation, it would be interesting to see how he handles the government's increasing demand for more cash from the RBI, and letting some weak banks get out of prompt corrective action.
"Now I get credit for the idea which actually I neither invented nor actually believed in," he said.
The former RBI Governor also emphasised on the need to boost economic productivity and attract investments.
India has 26 public sector banks, 22 private sector banks and 56 regional rural banks.
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A weak rupee makes imports costlier, including oil and other commodities.
RBI Governor Raghuram Rajan on Tuesday said the government will decide on extension of his tenure.
"I think the Governor has been doing a great job for the country and we would certainly see it as a very positive move if he were reappointed," Naushad Forbes, president, CII.
The G20 meeting of the finance ministers and central bank governors beginning July 19 will also be attended by Reserve Bank of India Governor D Subbarao and Deputy Governor Urjit Patel.
There was no word on whether or when Patel would be talking to the media about his priorities and plan of action as head of Mint Street
The biggest achievement of demonetisation is that it has brought about a social revolution against black money and corruption, says Sukumar Mukhopadhyay.
According to Subbarao, the pressure on the currency was inevitable.
Central banking is a science, not an art, Tamal Bandyopadhyay tells RBI Governor Shaktikanta Das.
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The Keynesian advice comes after Finance Minister P Chidambaram has said he considers the fiscal deficit at 4.8 per cent of gross domestic product in 2013-14 as a 'red line'.
Subbarao's remarks come against the backdrop of Finance Minister P Chidambaram's assertions in recent weeks that RBI should not focus solely on containing inflation but also look at the larger mandate of growth and job creation.
RBI, Sebi had imposed certain restrictions on futures markets by way of raising margins.
Endorsing Finance Minister P Chidambaram's call to banks to pass on the benefit of rate cuts to customers, RBI Governor D Subbarao on Thursday said the central bank is also "very conscious" of the need to be supportive of economic growth.
Officials asked what the point was in going through banks when the government has to give guarantees.
The RBI left key policy rates unchanged and cut the GDP growth estimate for this fiscal to 5.5 per cent from 5.7 per cent.
The friction with the political class is not only about interest rates and monetary policy. While the government often spoke freely about its discomfiture, the RBI had to be careful even in its response to the government as any loose statement would affect the markets.
The rupee is likely to strengthen to 60-61 level by this fiscal-end on expectations of improvement in current account deficit (CAD) and higher inflows from overseas investors.
Thanks to Rajan we are an inflation-targeting country now
On Monday, RBI announced that 26 entities, including Tata Sons, LIC Housing Finance, Aditya Birla Nuvo, Department of Posts, Reliance Capital, L&T Finance and Bajaj Finserv, applied for grant of bank licences.
There's need to address growth, but weak rupee putting pressure on prices.
Leaving it to Parliament the issue of amending laws to provide heavier penalty on banks indulging in such acts, RBI Governor D Subbarao also dismissed perceptions that the central bank was going soft on errant banks.
As the global economy sways into uncertain territories and domestic prices almost certain to rise, Raghuram Rajan's ideas would have come in handy.
Duvvuri Subbarao recounts how his tensions with P Chidambaram and Pranab Mukherjee, then finance ministers, over monetary policy spilled over into other issues in the central bank in this excerpt from Who Moved My Interest Rate?, his memoir of his term as Reserve Bank of India governor.
Hawkish tone likely to guard rupee from further slide
The judgment in the 2G case is a huge, huge, indictment of the criminal investigation and justice system, says R Jagannathan.
There is also a lobby within the bureaucracy that wants to see Rajan's influence curtailed
The finance ministry is working on a Cabinet note for establishing a full-fledged Public Debt Management Office, officials told Business Standard.
Kolkata's creme de la creme turned up at the launch of Bandhan, The Making of a Bank, but the evening nevertheless had an informal touch typical of the young bank with CMD Chandra Shekhar Ghosh personally welcoming the dignitaries, reports Indrani Roy/Rediff.com.
From a national point of view, inflation is the biggest threat posed by finance ministers.
Interview with former Reserve Bank of India governor by Duvvuri Subbarao.
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Addressing a Ficci-organised banking summit in Mumbai, he at the same time said that it will take several years for the country's banks to achieve the status of a large global bank.
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