India has been assigned the lowest investment grade rating with a high risk profile by various global agencies.
'Rajan's exit will have a great impact on the economy.'
The new government will face four big challenges -- subdued growth, the fiscal and current account deficits and sticky inflation, RBI Governor Raghuram Rajan said.
The rupee had surged 37 paise to end at a nine-month high of 59.68 against the dollar on Tuesday. Forex market remained closed on Wednesday for 'Buddha Purnima'.
'The critics are getting carried away.' 'The challenge for the RBI is not any erosion of autonomy caused by demonetisation.' 'It's the whole attempt to reduce the RBI's stature and role that has been under way,' says T T Ram Mohan.
The former Union minister alleged that the government is "intolerant to the slightest criticism".
RBI had previously cut repo rate by 0.25 per cent each in January and March.
RBI says, it cut rates as growth was not happening at ground level.
The aim of his visit was to explore how financial institutions can be co-opted in reviving the local economy.
Investors believe Indian is a tough place to do business with.
Government's effective supply-side measures and commendable commitment to fiscal consolidation will have a salutary impact on inflation, says the RBI report.
India's foreign exchange reserves surged $5.04 billion in the week ending March 28, its biggest weekly rise in four months, as the central bank started to buy dollars regularly in an effort to build up its defences against any potential global turmoil.
The rupee closed at 59.90 in Wednesday's trade, gaining just one paisa from its previous close.
Emphasising that revival of growth should be the number one priority of the RBI at this time, industry groups said apprehensions about inflation rearing its head again may prove to be misplaced.
Wholesale price-based inflation eased to a nine-month low of 4.68 per cent in February, while retail inflation slowed to a 25-month low of 8.1 per cent.
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Industry's demand for a reduction in the repo rate, currently 8 per cent, has gained momentum after wholesale and retail inflation eased in February.
The industrial output for the third month in a row remained in the negative territory, contracting 1.5% in January
SBI is the first major bank to cut its base lending rate this year.
Corporate houses believe RBI must cut rates to boost investment in the system.
CPI inflation will remain below the target of 6 per cent set for January 2016.
RBI will take a cue from the Fed policy statement.
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As on Monday, the prices of many vegetables had fallen as much as 50% compared with those a month before, due to increased supply, following the arrival of winter crops in the markets.
Soon after RBI announcing a much- awaited rate cut, Chief Economic Advisor Arvind Subramanian on Wednesday said that the global rating agencies should look at upgrading their stance on India's credit outlook. "Now we have a 50 basis points rate cut (in two tranches within two months) and I think that is good for the economy and all rate cuts benefits... If the outlook is looking good, the rating agencies should draw their lessons from that om improving the outlook," Subramanian told reporters. After presentation of Union Budget 2015-16 last week, global and domestic agencies had ruled out any immediate upgrade in India's sovereign ratings and had red-flagged the country's delayed fiscal consolidation roadmap and had also warned against any slippages from the "ambitious" disinvestment plan proposed in Budget. Subramanian said that the rate cut is consistent with the government's views in the last week's Economic Survey and thereafter in the Union Budget for the outlook on inflation and for the outlook on overall economy. "It (rate cut) shows that RBI and government are on the same page in terms of how we view the economy. It also means that Budget can be seen as conducive to non-inflationary growth," he added. On monetary policy framework agreement, Subramanian said that both Finance Ministry and RBI have shared concern about inflation. Recently, the Finance Ministry and the Reserve Bank agreed to 'inflation rate targeting' under which the apex bank will aim to lower retail inflation to below 6 per cent by January 2016.
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Traders say the outlook for the rupee has improved on the back of a sharp narrowing in the current account deficit after government and central bank emergency measures such as curbing gold imports.
This remark is in consonance with RBI Governor Raghuram Rajan's comment.
The forex kitty swelled for the fifth week in a row during the week ended December 6 to $295.71 billion, adding $4.41 billion. Between August 30 and December 6, the reserves have increased by close to $17 billion.
Rajan said it was important that the government and the RBI be vigilant to the growth scenario.
FM is seen to step up the pace of sales of state assets and curb spending
Finance Minister Arun Jaitley, along with other senior ministers, on Tuesday pitched India growth story before 21 large global investors
RBI and Sebi are close to reaching an agreement for providing waiver of existing norms to banks.
In the RBI's monetary policy statement review, Governor Raghuram Rajan said banks could extend timelines for large stalled projects by bringing in new 'promoters', or owners.
Rajan announced a status-quo on interest rates.
RBI Governor Raghuram Rajan wanted to improve training for staff, through initiatives such as sending them to other central banks for short stints.
Giving details of Rajan's 'course schedule' for 2016-17, Chicago Booth School said this course will explore the challenges of corporate finance and investment in a more integrated global economy.
Infrastructure bonds were launched by the RBI last year in a bid to help the government fulfill its plan to provide affordable housing to all by 2022
The BSE Sensex was among the world's best performers in 2014, rising almost 30 per cent after Prime Minister Narendra Modi took office on promises of reforms to boost growth
"I am an Indian citizen, I have always been an Indian citizen. I always held an Indian passport. I held an Indian diplomatic passport when my father was in the foreign service and when I travelled on behalf of the ministry of finance," Rajan said.
He warned low interest rates globally could distort markets and would be difficult to abandon
Raghuram Rajan optimistic about passage of GST
Jaitley said manufacturing sector will continue to face challenges unless it transitions itself while keeping the quality and price in mind.
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