Interview with former Reserve Bank of India governor by Duvvuri Subbarao.
Retail inflation inches up to 3.77%; IIP growth dips to 3-month low
SBI was the biggest loser in the Sensex pack, shedding 2.40 per cent, followed by Yes Bank, Bharti Airtel, L&T, Sun Pharma, M&M, ICICI Bank, ONGC, RIL, Asian Paints, Vedanta and HUL, which lost up to 2.37 per cent.
For protein rich items such as meat and fish, eggs as well as milk and products, the inflation in May slowed compared to last month
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.
In twin blows to Indian economic revival, higher food prices drove retail inflation to a five-month high of 7.4 per cent while factory output fell for the first time in 18 months. The second consecutive month of rise in consumer price index (CPI)-based inflation will add to the pressure on the Reserve Bank of India (RBI) to again raise interest rates to tame high prices. Inflation has been above the targeted zone for the ninth month in a row and as per statute, the RBI will now have to explain to the government in writing why it failed to keep prices below 6 per cent.
Kaushik Basu, whose stint at the World Bank ends on July 31, was being looked at as a serious contender, the sources said
The government on Wednesday appointed RBI's senior-most executive director M Rajeshwar Rao as the deputy governor of the central bank. Rao was appointed to the post vacated by N S Vishwanathan, who stepped down three months ahead of his extended tenure on health grounds.
Linking all new floating rate loans to an external benchmark won't impact existing borrowers, so customers who have taken long-term home loans recently should watch things carefully, say Joydeep Ghosh and Sanjay Kumar Singh.
The RBI Governor brought down retail inflation to 3.8% in July.
Raghuram Rajan rejected the argument that inflation has come down largely because of "good luck" stemming from low oil prices.
The cost of holding one-year forward dollars rose to 482.75 basis points from 472.75 bps on Tuesday.
He has had a productive first year at the RBI -- one which saw, also, India's economic imbalances improve and the unexpectedly strong general election outcome.
Here are the key decisions announced by the Reserve Bank of India on Thursday.
This is the first time in the RBI's history that a governor is leaving without willing to renew his contract
The finance ministry has received about 100 applications for the post, which have been sent to the high-level panel that will select a suitable candidate for the post, sources said.
The report, however, said it remains watchful of the upside risks to inflation emanating from pass-through of minimum support prices (MSPs), adverse movement in crude oil prices, volatility in global financial markets, lagged impact of the rupee weakness on input prices, adverse implications from fiscal slippage and staggered impact of HRA increases by states and its second-round impact.
With inflation remaining at elevated levels, central banks around the world, including the Reserve Bank of India (RBI), will kill excess demand in economy over the next six to eight months, sources in the know said. They also indicated that there could be a rate hike in June, when the inflation forecast for the current financial year would be raised. The RBI, the sources said, might announce more steps such as raising the limit on held-to-maturity (HTM) bonds to support government borrowings but might not come out with any further quantitative easing GSAP (Government Securities Acquisition Programme) measures.
"Unlike in UP, the governments of Punjab and Rajasthan are not denying that the girl was raped, threatening her family and blocking the course of justice. If they do, I will go there to fight for justice," he tweeted.
Chaos in Parliament threw a spanner in the government's efforts to revive the economy and kick-start reforms.
RBI Governor Raghuram Rajan is regarded as credible by global financiers.
Home Minister Rajnath Singh said that the decision could cost the government roughly Rs 15,000 crore.
The Reserve Bank (RBI) resisted a 'raid' planned by some in the government to extract Rs 2-3 lakh crore from its balance sheet in 2018 to meet populist spending in run-up to general elections, Viral Acharya, who was deputy governor at RBI at that time, has written.
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
Moody's listed six agenda on the list of pending reforms -- land acquisition Bill, labour law reforms, significant infrastructure investment, tangible benefit from Make in India initiative, tax administration and PSU bank reforms
IMF attributes the slower growth rate to supply-side bottlenecks.
Reserve Bank of India Governor Shaktikanta Das tells Anup Roy, Raghu Mohan and Niraj Bhatt that it is time for banks to lower interest rates and start lending to cash-starved finance companies after due credit appraisal and proper risk assessment.
'Election years tend to see high government expenditure on unproductive schemes, though that money sloshing around can boost private consumption.' 'Again, it can mean higher inflation,' explains Devangshu Datta.
SBI is the first major bank to cut its base lending rate this year.
The poll of over 30 economists, taken in the past week, showed Asia's third largest economy will expand 7.8 percent in the fiscal year ending March 2017.
Says impact of crisis in China won't be as big here as in some other countries
To a specific question on the change in RBI's stance from "neutral" to "accommodative", Das said it means that there will not be any rate hike from here on.
'Rate cut should reiterate RBI's commitment in providing confidence to consumers and small business.'
Backloading the government's borrowing programme suggests the finance ministry's confidence in better revenue numbers, says A K Bhattacharya.
The year 2014-15 could well go as one of long-pending financial sector reforms, expected to have a lasting impact.
Gold prices staged a smart rebound to surpass the psychologically important Rs 28,000 milestone.
Rumours in the bureaucracy on his successor include the names of Sajjid Chinoy of JP Morgan, Rathin Roy of the National Institute of Public Finance and Policy, Neelkanth Mishra of Credit Suisse and the principal economic advisor, Sanjeev Sanyal.
This is the second high profile resignation in the past six months at the Reserve Bank of India.
Will Arundhati Bhattacharya be the RBI's first woman governor? Or will Urjit Patel succeed Raghuram Rajanas RBI governor when his term ends on September 4?
High frequency indicators suggest that a growth recovery is underway, but very tentatively and with weak legs, says Saugata Bhattacharya.
