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
Duvvuri Subbarao recounts how his tensions with P Chidambaram and Pranab Mukherjee, then finance ministers, over monetary policy spilled over into other issues in the central bank in this excerpt from Who Moved My Interest Rate?, his memoir of his term as Reserve Bank of India governor.
In a double delight, retail inflation eased to a one-year low of 5.72 per cent - staying below the upper tolerance limit for two months in a row, while factory output rose sharply to 7.2 per cent on the back of healthy growth in manufacturing. The retail inflation numbers based on Consumer Price Index (CPI) will provide some room for the Reserve Bank to further moderate the quantum of hike in key interest rate or even press a pause button. The RBI has been on a rate hiking spree since May 2022 in its bid to tame inflation, having raised the repo rate by a cumulative 225 basis points (bps).
The use of RBI capital to strengthen public sector banks will have many positive implications for the economy -- and a few manageable downsides, points out R Jagannathan.
Finance minister Arun Jaitley has delivered a Arun Jaitley delivered a bold, far sighted budget
Rajan's exit will neither affect the RBI's de facto independence nor its working.
'Rate cut should reiterate RBI's commitment in providing confidence to consumers and small business.'
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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.
Large urban co-operative banks may come to be solely under the provisions of the Banking Regulation Act, even as the smaller among them are to remain within the exclusive fold of the Registrar of Co-operative Societies. The upcoming changes will bring the curtains down on the vexed issue of dual control of UCBs, which has been in vogue for 54 years. The new framework will affect 1,551 UCBs in the country, which had a total business of Rs 7.36 trillion.
There is a narrow chance that the central bank may cut rates in the future, according to a poll of 15 economists and treasurers.
The Reserve Bank on Wednesday hiked key benchmark policy rate by 25 basis points to 6.5 per cent, citing sticky core inflation. This is the sixth time interest rate has been hiked by the Reserve Bank of India (RBI) since May last year, taking the total quantum of hike to 250 basis points. Announcing the bi-monthly monetary policy, RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) by a majority decided to raise the policy repo rate by 25 basis points and keep a 'strong vigil' on inflation outlook.
The broad market depicted strength. 1,525 shares rose and 1,131 shares fell. A total of 156 shares remained unchanged
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.
North Block and Mint Road seem likely to now stick to the earlier convention of the RBI governor coming to Delhi and being the only MPC member meeting the finance minister and senior bureaucrats on pre-policy meetings
The year 2014-15 could well go as one of long-pending financial sector reforms, expected to have a lasting impact.
At the World Bank Banga will be replacing David Malpass, a former Trump treasury official, reports axios.com. Malpass had already announced that he will resign by July, months ahead of his term expired. "Ajay is uniquely equipped to lead the World Bank at this critical moment in history," President Biden said in a statement. Banga, 63, currently serves as vice chairman at General Atlantic.
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.
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.
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.
Lower inflation, FCNR(B) outflows likely to influence central bank decision
High rates of such schemes deter banks from dropping borrowing rates - and thus lending rates
Bajaj Finance was the biggest loser in the Sensex pack, tanking up to 8 per cent, followed by Hero MotoCorp, IndusInd Bank, Maruti and HCL Tech. Axis Bank, ITC, NTPC and M&M were among the top gainers.
The size of the Reserve Bank's balance sheet, which is reflective of activities carried out by it in pursuance of currency issue function as well as monetary policy and reserve management, has increased by 6.99 per cent during the nine-month period ended March 31, 2021. While income for the year decreased by 10.96 per cent, the expenditure decreased by 63.10 per cent, as per the RBI's Annual Report for 2020-21. The year ended with an overall surplus of Rs 99,122 crore as against Rs 57,127.53 crore in the previous year, representing an increase of 73.51 per cent, it added.
Banks argued that loans of most lenders are funded primarily by retail deposits and not from the wholesale market as was the practice abroad
The RBI's surprise rate hike may have been prompted by its inability to convince the government to cut excise duty on petrol and diesel and take other supply-side measures to tame runaway inflation, sources aware of the central bank's thinking said on Thursday. There has been a record Rs 10 a litre increase in petrol and diesel prices in a matter of 16 days beginning March 22, which has further fuelled the already high commodity prices. The RBI, which is mandated to ensure inflation is under 6 per cent, acted with a 0.40 per cent increase in repo rate to check prices before they went completely out of hand.
Instead of only focusing on the tenure for which the best interest rate is available, investors should also focus on their own investment horizon.
The RBI governor-designate may be economical with spoken words, but is known for his sharp and critical writings
The idea is to boost household savings and turn more of them into growth capital. If the plan succeeds, sustained eight per cent-plus rates of gross domestic product growth should be within reach in a few years.
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?
In the Sensex pack, M&M was the biggest loser, tumbling by 6.66 per cent, followed by TCS dropping 4.14 per cent.
The mismatch between industrialists' demand and account holders is because of inflation, Rajan said.
The RBI was not party to the decision to demonetize 500 and 1,000-rupee notes, which was taken at the highest level of India's political leadership.
Heavy selling of the US dollar by banks and exporters in the face of renewed capital inflows predominantly kept sentiment highly buoyant
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
The wait for India to become a $5-trillion economic powerhouse by 2024-25 (FY25) is going to take longer than what the finance ministry had originally intended, according to the International Monetary Fund (IMF). The vision will instead be achieved in 2028-29 (FY29), reveals the IMF data, illustrating a four-year delay. Chief Economic Advisor (CEA) V Anantha Nageswaran had in February said India would become a $5-trillion economy by 2025-26 or the following year, on the back of 8-9 per cent sustained growth rate in real gross domestic product (GDP). However, the IMF data conveys that the economy will be $4.92 trillion in FY28, clearly alluding to the fact that the target will be realised in FY29.
Central bank moves to infuse liquidity into bond market to help boost sentiment.
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.
During March, the rate of inflation slowed to the weakest in four months and was below the long-run survey average
The economy is gaining traction with gradual pick up in manufacturing activity and moderation in contraction of services, spurred by comfortable liquidity conditions, an RBI article on Tuesday said. Observing that the retreat of the second wave of coronavirus pandemic has been slow, the RBI in an article on the 'State of Economy' said, the aggregate demand conditions are buoyed by the release of pent-up demand post unlock, while the supply situation is improving with the monsoon catching up to its normal levels and sowing activity gaining pace. "Reaffirming the traction that the economy is gaining, the manufacturing activity is gradually turning around, while contraction in services has moderated.
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