Finance Minister Pranab Mukherjee sought to soothe the frayed nerves of India's financial regulators by saying the government would not undermine their autonomy. Mukherjee's assurance came a day after Reserve Bank of India Governor D Subbarao went public with his "concerns" over dilution of the central bank's role in dealing with inter-regulatory disputes in the Ordinance issued last month.
The meeting comes ahead of a fresh stimulus package aimed at sectors not covered in the earlier measures announced by the central bank and the government.
Traditionally, Prime Minister picks the RBI Governor after consultation with the finance minister.
Expect rate rise pause, amid market expectations to the contrary.
The Reserve Bank of India, in its first-quarter review of monetary policy, kept the benchmark policy rate constant at 8 per cent.
Managing recovery is a bigger challenge than managing crisis, says the Reserve Bank of India governor D Subbarao
Subbarao's annual statement will be of unusual interest this year
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.
The Reserve Bank of India on Friday said it will come out with its annual monetary policy for the next fiscal on April 20, amid expectations that the central bank will hike interest rates to tame the rising inflation
Reserve Bank Governor D Subbaro on Tuesday said there is scope for banks to lower lending rates further, but most top bankers maintained that interest rates will remain the same in the near term and could even rise after 3-4 months.
The Reserve Bank of India Governor Duvvuri Subbarao's caution that the central bank will intervene if foreign inflows are 'lumpy and volatile' has calmed the rupee a bit. The local currency on Monday closed at 44.41 per dollar, compared to 44.44 per dollar on Friday. The rupee, which has gained about 5.7 per cent since the beginning of September, traded at its five-month high.
The panel shortlisted bank chairmen who have headed an entity for at least two years and were less than 60 years of age when the vacancy arose. The list will now be narrowed down to three candidates who will be recommended to the appointments committee of the cabinet headed by Prime Minister Manmohan Singh. Their consent will be sought before sending the list to the ACC.
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.
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.
Expectes RBI Governor to announce 0.25 per cent rate cut.
India's chief economic adviser, Raghuram Rajan has been appointed as the governor of the Reserve Bank of India.
The Reserve Bank on Tuesday lowered the growth projection for the current fiscal to 5.5 per cent from its earlier estimate of 5.7 per cent and asked the government to undertake policy measures to improve investment climate.
Making a case for raising prices of diesel, kerosene and LPG, the Reserve Bank on Tuesday said hike in rates of petroleum products is necessary to arrest fiscal slippages.
The meeting comes days after the finance minister told Parliament that he would discuss the possibility of further fiscal and monetary measures to revive economic growth, which is projected to fall to 7.1 per cent this year, as against 9 per cent or more in the last three years. The Central Statistical Organisation is due to release the third-quarter gross domestic product estimates by the end of the week. RBI is expected to announce more measures after the data is released.
Economists say RBI to raise policy rates in annual policy statement in April.
A day after Chidambaram asked RBI to speed up the process of issuing new bank licences, Subbarao said last Friday that it would not be possible without fulfilling the enabling conditions for the same.
RBI said the continuing sluggishness of the global economy led to some moderation in exports growth and invisible receipts, while import growth accelerated due to the strong domestic recovery.
Search panel to shortlist candidates soon.
Punjab National Bank Chairman and Managing Director K C Chakraborty has emerged as the frontrunner for the post of the fourth deputy governor of the Reserve Bank of India (RBI).
The drop in headline inflation to a 40-month low of 5.96 per cent for March has increased the possibility of a rate cut by the Reserve Bank at its May 3 annual policy, analysts and rating agencies said.
A selection committee, headed by Reserve Bank of India (RBI) Governor D Subbarao, is scheduled to meet next week to shortlist candidates for the post of the deputy governor of the central bank.
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.
However, since the banking system is facing tight cash conditions due to payment for spectrum for high speed telecom and broadband services and advance tax outgo, some experts are also of the view that RBI would wait for liquidity to ease before going for rate hikes.
Analysts and the media have near-unanimously approved the latest monetary policy update of the Reserve Bank of India which has left key interest rates unchanged, while indicating that its accommodative stance will continue until recovery becomes more robust. But it is possible to question whether this halfway house is the right place to be in right now.
India imports 80 percent of its oil, which adds to inflationary pressure.
Go for short-term debt funds and fixed deposits, delay home or auto loans.
After attending a meeting in Mumbai with RBI's top brass headed by Governor D Subbarao, Harsha Pati Singhania, president, FICCI, said the real rate of interest remained in double digits despite inflation having declined sharply. "Given the present interest rate structure and the inflation rate, real rate of interest is still in double-digits. With the near-zero rate of inflation, the real and nominal rates of interest are almost at the same level," said another industrialist.
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.
Markets opened sharply lower on Tuesday, amid weak Asian cues, on concerns that the liquidity squeeze by the central bank would hurt growth and impact equity inflows.
The rupee has declined by about 9 per cent in the past three months and had touched an all time low of 61.21 to a dollar earlier this week.
In an attempt to mitigate the problems faced by the beleaguered diamond industry in Gujarat, the Reserve Bank of India has decided to set up a task force comprising representatives of the state government, the State Level Banking Committee Convener and other bankers.The task force will submit its report by the month-end. Gujarat's diamond industry has been beset with problems, chief among them being lacklustre Christmas-season demand for finished diamonds.
Said to be considering a 2nd term for RBI deputy governor
Finance minister Pranab Mukherjee said on Tuesday the Reserve Bank of India's move to keep almost all rates unchanged is line with the discussions he had with the apex bank's governor and the government's thinking on fiscal and monetary policies.
While there are certainly more hawks perched on monetary policy committees of central banks around the world now than a couple of months ago, the doves still have the upper hand.
RBI is scheduled to announce mid-quarter review of monetary policy for 2013-14 on June 17.
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