'There are occasions when the prices of individual items like food raise inflation; then supply-side measures must be taken.' 'But if there is continued inflation, it means liquidity is aggravating the situation.'
Rating agencies Crisil and Icra on Monday revised down their India growth projections for the current fiscal and the second quarter mainly due to the ripple effect of slowdown in global growth and mixed crop output. Crisil downgraded the India growth forecast by 30 bps to 7 per cent while Icra pegged the economic expansion at 6.5 per cent for the second quarter of FY2022-23. "We have revised down our forecast for real gross domestic product growth to 7 per cent for fiscal 2023 from 7.3 per cent, primarily because of the slowdown in global growth that has started to impact our exports and industrial activity.
The principal challenge for Rajan's successor is to work with the Bank Board Bureau and the finance ministry to complete these processes of banking reform.
While efforts are being mounted on a war footing to arrest its spread, COVID-19 will impact economic activity in India directly through domestic lockdown. The second-round effects, it said, would operate through a severe slowdown in global trade and growth.
After consumer price index jumped the 6.3-per cent mark in May and wholesale inflation set a record of 12.94 per cent, house economists at Swiss brokerage UBS Securities have warned that the country is facing more upside risks on the inflation front that is set to averaging at 5 per cent for the year. Rising prices of edible oils and protein rich items pushed retail inflation to a six-month high of 6.3 per cent in May, breaching the comfort level of the Reserve Bank and thus rendering reduction in interest rates a difficult proposition in the near term. Led by petrol price, that has crossed the Rs 100-mark in many states, wholesale inflation too accelerated to a record 12.94 per cent in May. While crude oil has crossed $70 a barrel on account of rising prices of crude oil and manufactured goods due to spike in commodities, and the low base of last year due to the lockdown.
Technical Advisory Committee was for status quo in policy rate on little hope of government action.
What stood out in his 15-year journey as a member of the political executive at the Centre was his glowing record as India's most successful and effective finance minister. Both as prime minister and finance minister, he understood the importance of gradualism, except when the economy or the polity was in a crisis.
A day after BRICS (Brazil, Russia, India, China and South Africa) nations agreed on a $100-billion foreign currency reserve pool to tackle the volatile foreign exchange markets, India on Friday said the pool would act as a buffer arrangement, adding it might not withdraw anything from this reserve.
India needs foreign exchange buffer reserves to insulate itself from exchange rate volatility as we have "no friends" for swap lines and Japan was the only country that helped during the taper tantrum in 2013, former RBI Governor Raghuram Rajan said on Tuesday. Participating in a virtual event organised by economic think tank NCAER, Rajan said during the taper tantrum in 2013, India asked for swap lines, and only country who helped was Japan. "We need this (foreign exchange) reserve buffer to insulate ourselves because we have no friends.
Costlier vegetables and eggs pushed up retail inflation to a nearly six-and-a-half year high of 7.61 per cent in October, keeping it significantly above the comfort zone of the Reserve Bank.
Relying on the private sector to undertake infrastructure investment may not be a realistic proposition.
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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.
It is time for the three finance ministers of the 1990s to reveal the real hero, says T C A Srinavasa-Raghavan.
Analysts are expecting inflation to fall further in October and November on base effect. Inflation measured by consumer prices has been trending down for over four months, and came in at 6.7 per cent in September.
From the Sensex pack, Tata Motors, Sun Pharma, Wipro, Tata Consultancy Services, UltraTech Cement, Tech Mahindra, Bajaj Finserv, HCL Technologies, Infosys and IndusInd Bank were the major laggards. NTPC, Power Grid, Reliance Industries, Tata Steel, HDFC and HDFC Bank were the major winners.
Infrastructure and inflation targeting are expected to be top priorities for the new Reserve Bank of India governor, says A V Rajwade.
RBI recently cut repo by 0.25 percentage point, taking the rate to 7.25 per cent in three reductions since January.
Foreign flows into Indian equities are expected to pause in the short to medium term, say analysts. The outlook is influenced by multiple factors, including rising oil prices, actions from global central banks, climbing bond yields, and the dollar index gaining prominence. "Valuations appear rich with the markets at record highs.
Finance minister Arun Jaitley has delivered a Arun Jaitley delivered a bold, far sighted budget
The downward surprise in Q2 stemmed from a stronger-than-anticipated drag from gross fixed capital formation and marginal weakness in private final consumption expenditure. In Q3, projection errors emanated mainly from a steep unanticipated contraction in gross fixed capital formation, which was the deepest in the new series of GDP.
RBI wants periodic revision of the pensions for its retired employees.
Instead of only focusing on the tenure for which the best interest rate is available, investors should also focus on their own investment horizon.
A host of factors including the reform measures taken by the government and decline in global oil and commodity prices have led to lower inflation, the Finance Ministry said on Wednesday.
In a business friendly move, the Reserve Bank of India on Friday said that Real Time Gross Settlement System (RTGS), used for large value transactions, will be made available round-the-clock from December. In December 2019, the National Electronic Funds Transfer (NEFT) system was made available on a 24x7x365 basis. Currently, RTGS is available for customers from 7.00 am to 6.00 pm on all working days of a week, except second and fourth Saturdays of every month.
The domestic market has posted its third straight weekly gain, supported by positive global cues, strong foreign fund inflows and good numbers from some companies.
Some say the MPC will raise the rate, while others are of the view that there is already de facto interest rate tightening through rising bond yields, which might prompt the central bank to go for a pause.
The 50-stock NSE barometer Nifty finished 14.75 points, or 0.14 per cent, down at 10,382.70 after shuttling between 10,340.65 and 10,393.15.
The apex bank's observation on Tuesday comes at a time when global markets remain uncertain about the overall impact of the tsunami and the subsequently unravelling nuclear crisis in Japan.
The statement, issued after the 2-day meeting of the 6-member Monetary Policy Committee of the Reserve Bank of India, also said that recapitalisation of public sector banks along with resolution of stressed assets under the Insolvency and Bankruptcy Code (IBC) will create demand for fresh investments.
However, predictions that economic conditions will normalise after the elections underpinned optimism regarding the outlook and supported a stronger upturn in employment.
Potato, a daily consumable vegetable, witnessed maximum inflationary pressure at 60.58 per cent
In his book, former governor Subbarao says Chidambaram, Pranab were piqued by his tight rate policy.
HDFC Bank was the top loser in the Sensex pack, falling 2.99 per cent, followed by Adani Ports at 2.87 per cent.
Finance Minister Nirmala Sitharaman has said the recent interest rate hike by the Reserve Bank was not surprising for her but the timing was, asserting that the rising cost of funds will not impact the government's planned infrastructure investments. For the first time since August 2018, RBI had on May 4 delivered a blunt 40 basis points increase in key repo rate to 4.40 per cent, and also hiked the cash reserve ratio by 50 basis points to 4.5 per cent after an unscheduled meeting of the rate setting panel, citing increased inflation pressures following the Ukraine war and the resultant spike in crude oil prices. Retail inflation printed at 6.9 per cent in March and the April reading is forecast to top 7.7 per cent.
'The Reserve Bank's independence has remained a work in progress, an enduring challenge that the nation has been grappling with on an ongoing basis,' says RBI Deputy Governor Dr Viral Acharya.
'People know if inflation is not within the tolerance band, then action will be taken so they do not expect inflation to rise above that.'
If you are planning for a long-term goal like your child's education in a foreign university, invest about 20% of your portfolio in foreign assets that can provide a hedge against the rupee's depreciation.
During the month, inflation in vegetables shot up to 35.99 per cent, as against 26.10 per cent in October. Likewise, the prices of cereals and eggs grew at a faster pace of 3.71 per cent.
He said the short term macroeconomic priorities of the RBI continue to focus on bringing down inflation towards the government-set target of 4 per cent
Most central banks across the world have around 5-7 years of tenure for the governor and deputy governors.
