RBI's policy stance must address concerns over slowing output
"The economy is going through a very difficult patch and business confidence has plummeted. New investments have slowed down," Assocham President Rajkumar Dhoot said during his interaction with RBI Governor D Subbarao ahead of the central bank's monetary policy review scheduled on April 17.
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Chidambaram said recent measures taken by the Reserve Bank of India were aimed at reducing volatility in the financial market, where the rupee has dropped to record lows.
Reserve Bank of India Governor D Subbarao on Friday said he cannot speculate on when he will start cutting policy rates, but assured that the central bank will ensure that there is enough liquidity in the system by conducting open market operations.
The probability of a global recession is low, even though the United States is growing slowly and Europe is experiencing negative growth, Reserve Bank of India Governor D Subbarao said on Friday.
Even as the deficits on fiscal and current account fronts have been building up, it is highly unlikely that the country could witness the repeat of the 1991 economic crisis that was caused by similar factors, said Duvvuri Subbarao, Governor of the Reserve Bank of India (RBI) on Thursday.
Finance Minister Pranab Mukherjee on Friday asserted that India's economy is 'robust' and its growth story is intact, amid fears of another global economic turmoil that sent the world stocks into a tailspin.
For India to regain its growth momentum and indeed accelerate it further, we need to address several challenges, said Duvvuri Subbarao, Governor, Reserve Bank of India, while delivering the Haksar Memorial Lecture.
As GDP growth falls below the new normal, rate cuts seem inevitable.
Bankers and other stakeholders are now almost certain that the Reserve Bank of India (RBI) will increase the key policy rate, or the repo rate, by 25 basis points (bps) on Tuesday.
With the average WPI-based inflation at 7.5% and CPI-based one above 10%, a bit of aggression is required to beat inflation. Four experts give their views.
Reserve Bank Governor D Subbarao will, however, not touch the policy rate or the repo, rate at which RBI lends to banks, on October 30 when he unveils the half-yearly monetary policy because headline inflation continues to be elevated at 7-7.5 per cent, the agency said.
There is not much that the RBI can do to address India's inflation. Solutions to the problem lie with Pranab Mukherjee and Sharad Pawar, who run the ministries of finance and agriculture, respectively.
Recent slide in inflation no consolation amid exceptional shrinkage in industrial growth.
Draft norms soon, but central bank worried about self-dealing by company promoters.
Reserve Bank Governor D Subbarao on Tuesday favoured bifurcation of the posts of chairman and managing director in state-run banks, saying the experience of such a split in the private sector has been satisfactory.
"Global rebalancing will require deficit economies to save more and consume less, while depending more on external demand relative to domestic demand for sustaining growth. Surplus economies will need to mirror these efforts - save less and spend more, and shift from external to domestic demand," Subbarao said during his intervention in the ongoing Spring meeting of the IMF in Washington.
The Reserve Bank of India chief also reviewed the high-level of inflation with the Finance Minister, ahead of the quarterly review of monetary policy next week, amidst expectations of another hike in key interest rates.
There is also a lobby within the bureaucracy that wants to see Rajan's influence curtailed
There could possibly be some reduction in home/auto loan outgo.
Manmohan Singh, reveals the former President, was keen that either P Chidambaram or Montek Singh Ahluwalia be the finance minister.
The Reserve Bank on Monday warned that India's foreign exchange reserves mostly comprise borrowed funds and the country is vulnerable to sudden outflow of funds.
What the industry and observers have been saying for quite some time -- that there is a lot of regulatory confusion on developing a corporate debt market -- has come out in the open with the RBI Governor and the Plan panel head speaking on the same topic in different languages.
Amid decelerating manufacturing growth, the Reserve Bank wants the government to come out with measures in the Budget to give a boost to the sector, which can employ surplus labour from agriculture.
Headline inflation was 8.98 per cent for March, while the food inflation was 8.76 per cent for the week ended April 16.
The government is in the process of setting up of an independent debt management office, aimed at separating RBI's role as the decider of interest rate in the market, and at the same time being the banker to the government.
Describing the annual monetary policy announced by RBI Governor D Subbarao as a progressive one, Ernst & Young India's Ashvin Parekh said, "We have almost reached a point where inflation has become unmanageable and RBI has clearly indicated that bringing down inflation to a comfortable level is its top priority."
Expect rate rise pause, amid market expectations to the contrary.
RBI is also considering a proposal to re-introduce inflation-indexed bonds.
US Commerce Secretary Gary Locke's robust meetings in Mumbai, includes a bilateral with the Governor of the RBIndia Dr D Subbarao and senior officials at the Department of Atomic Energy and the Nuclear Power Corporation of India, in addition to speeches to the Federation of the Indian Chambers of Commerce and Industry and the National Association of Software and Service Companies, will also be punctuated with an interaction with the dabbawallahs or tiffin caterers.
While the common citizen will benefit from the central bank's action, the policy stance is consistent with sustaining high growth in the medium term.
Reserve Bank of India (RBI) Executive Director Anand Sinha is set to replace Usha Thorat as deputy governor. Finance Minister Pranab Mukherjee has recommended Sinha's candidature to the Appointments Committee of the Cabinet (ACC).
The International Monetary Fund and the World Bank had forecast that India's economy would grow at 8 per cent and 9 per cent, respectively.
The loan by the banks to MFIs for on-lending to small borrowers will fall under 'priority sector' category if the RBI guidelines are met.
"Bank loans to all MFIs, including NBFCs working as MFIs on or after April 1, 2011, will be eligible for classification as priority sector loans if, and only if, they conform to the regulations formulated by the Reserve Bank," RBI Governor D Subbarao said in the 'Monetary Policy Statement for 2011-12'.
RBI Governor D Subbarao is expected in the capital on Friday to hold pre-policy consultations with Finance Ministry officials.
There was a near-unanimous view that the time was right for an increase of 50 basis points in policy rates. Some even suggested that the rates be raised by 75 basis points.
The central board of Reserve Bank of India (RBI) has opposed a government move to have control over the central bank's staff-related matters. The proposal to make staff regulations statutory and bring them under the subordinate regulation of Parliament was discussed at RBI's board meeting in Kolkata last week.
Blaming high cash balance with the Government for aggravating liquidity strain in the system, the Reserve Bank on Thursday asked it to loosen purse strings for easing the situation. "On Wednesday, the government cash balance stood at Rs 92,000 crore (Rs 920 billion).
Hailing the announcement of Raghuram G Rajan as the new RBI Governor, India Inc on Tuesday said the appointment of the former IMF Chief Economist will help bring the economy back on growth path.
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