RBI opts for status quo, promises rate cut if inflation drops

Mumbai: Continuing to accept vigilance, the Reserve Bank on Tuesday kept notice rates unmoved but promised to ease them if there is sooner disinflation even as it made clear that the important ballot vote results could effect in inclusive policy events.

However, the central bank in its bi-monthly policy appraisal not closed about Rs 40,000 crore of banking funds by wounding the constitutional liquidity ratio (SLR), the part of deposits banks park in government bonds, by 0.5 percent to 22.5 percent.

Arun Jaitley underlines need to contain inflation, boost growth

New Delhi: Attributing the present monetary woes to a "decade of jobless growth", Finance Minister Arun Jaitley Sunday underlined the need to hold price rise and rush financial reforms to increase low-cost developed.

"Reviving the expansion impetus, containing price rises and varying the prototype of enlargement to profitable employment is today an superseding main concern," he said in his Facebook post summing up his one week in office.

RBI ought to not seem only at price rises objective: Montek

Planning Commission Deputy Chairman Montek Singh Ahluwalia
Ahead of the RBI's periodical policy appraisal, Planning Commission Deputy Chairman Montek Singh Ahluwalia on Monday said scheming price rises should not be the only goal of central banks.

"My emotion is that middle banks have to look at numerous targets, central banks ought to not look only at price rises aim...," he said at an occasion.

After hiking rule rate in two successive policies, the Reserve Bank kept did not modify the attention rate pregnant that price rises would reasonable, amid others.

The RBI is listed to proclaim its third district financial strategy appraisal on January 28 in the milieu of manufacturing command to decrease the key strategy rate (repo).

Ahluwalia also inclined for additional liberalisation of the country's economic division.

"We should persist to liberalise. We have to keep in mind, we were correctly well keeping pace. We should vigorously keep liberalising our monetary division...," he said.

Inflation may ease to 6.5% in December: Rangarajan

 
Mumbai: A fall in vegetable prices is likely to ease headline inflation and retail inflation to 6.5 percent and 9.20 percent respectively in December, Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan said on Saturday.

"Some of the things that have really pushed up inflation are vegetables like onion prices, which have crashed in December. Therefore when December number comes in mid January, we will see retail inflation coming down by 2-2.5 percentage from the current level of 11 percent or so. There could be a decline in wholesale price index ... Could be the order of 1 percentage," Rangarajan told reporters on the sidelines of the silver jubilee celebration of Indira Gandhi Institute of Development Research.

Wholesale price-based inflation (WPI) accelerated to 14- month high of 7.52 percent in November, while retail inflation quickened to eight-month high of 11.24 percent during the month.

Going forward, Rangarajan said, the declining trend in inflation will continue and WPI may ease to 6.5 percent by March-end.

"The RBI has estimated WPI to be around 6.5 percent by March end. That is the number we are looking at. We will see a decline in December and perhaps it will continue," he said.

Quoting an econometric study, the former RBI governor said the threshold inflation level is around six percent, but there is a need to look at the slightly lower as the level is much higher than what many other countries in the world... advanced countries treat as the acceptable level of inflation.

Rangarajan says inflation may ease to 6.5 per cent in December

 
A fall in vegetable prices is likely to ease headline inflation and retail inflation to 6.5 per cent and 9.20 per cent respectively in December, Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan said on Sunday.

"Some of the things that have really pushed up inflation are vegetables like onion prices, which have crashed in December. Therefore when December number comes in mid January, we will see retail inflation coming down by 2-2.5 percentage from the current level of 11 per cent or so. There could be a decline in wholesale price index ... could be the order of 1 percentage," Rangarajan told reporters on the sidelines of the silver jubilee celebration of Indira Gandhi Institute of Development Research.

Wholesale price-based inflation (WPI) accelerated to 14-month high of 7.52 per cent in November, while retail inflation quickened to eight-month high of 11.24 per cent during the month.

Going forward, Rangarajan said, the declining trend in inflation will continue and WPI may ease to 6.5 per cent by March-end.

"The RBI has estimated WPI to be around 6.5 per cent by March end. That is the number we are looking at. We will see a decline in December and perhaps it will continue," he said.

Top bankers hail work of outgoing RBI Governor D.Subbarao

RBI Governor D Subbarao demits office on September 4, after being at the helm for five years that saw the beginning of the global recession from which it is yet to recover.

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Mumbai, Sept 2:  

Top bankers have hailed the contributions of the outgoing Reserve Bank Governor Duvuuri Subbarao saying he did his best during a tenure that was marked by difficult times for the economy.

“I think the Governor’s (five year) term has been in one of the most difficult environments globally and domestically.

“If you look at the world and our country today, there is so much change that you have to be at your feet and I can’t imagine anybody else doing a better job (than Subbarao),” Axis Bank Managing Director and Chief Executive Shikha Sharma said.

Subbarao demits office on September 4, after being at the helm for five years that saw the beginning of the global recession from which it is yet to recover.

Within a fortnight of him assuming office, global investment bank Lehman Brothers filed for bankruptcy and the hit pulled the global banking system down to an unprecedented credit crisis which eventually led to the worst recession since the Great Depression.

This was followed by a difficult period which saw RBI working in close coordination with the government and other financial sector regulators, as also other central banks, to ring-fence the economy.

While the fiscal and monetary stimuli ensured that the economy did not fall off cliff, this soon gave way to a spike in inflation. This saw rise in policy rates from October 2010 for a year or so even as growth started coming down.

As Subbarao’s term moved close to ending, worries over slowing growth and stubborn inflation complicated the matter for the central bank. His problems got compounded with the fall of the rupee beginning May-end. It declined to a low of 68.85 intra-day to the dollar early last week.

“I’ve the highest respect for him. He has been through difficult times and let’s put it this way: in hindsight, it’s very easy to judge anybody...I do believe he did a great job,” Aditya Puri, who heads the second largest private lender HDFC Bank, said.

“One thing that has not been fully talked about during his tenure is that he has reduced CRR and SLR by 4 percentage points, which to my mind, in a tenure of five years is very significant,” said Pratip Chaudhuri, the chairman of the country’s largest bank State Bank of India.

Chaudhuri, who favoured doing away with CRR, added that its reduction was one of the reasons for the economic buoyancy during early part of Subbarao’s stint.

“To some extent, the buoyancy which we saw in the economy in the previous two years, could be attributed to that,” Chaudhuri said