State Bank of India chairman Pratip Chaudhuri, yet again, took on the Reserve Bank of India (RBI), saying saying CRR is a “waste” for the economy and successive interest rate cuts by central bank have failed to contain inflation.
The CEO caused a flutter in the banking community by demanding the abolition of the Cash Reserve Ratio (CRR) in SBI vs RBI round II. RBI did promptly appointed a committee to look at this issue. The reserve ratios, CRR and SLR (Statutory Liquidity Reserve), are an important feature of Indian banking regulation. View full article »
The combined output of emerging-market economies now accounts for more
than half of world GDP and energy consumption. The emerging countries also hold 70% of the world’s foreign-exchange reserves. As a result, rich countries no longer dominate either the global economy or the global economic-policy agenda. Emerging countries’ global integration, demand for View full article »
Economy always passes in different phases could be classified as the boom phase, the downside or the burst phase . Central bankers are the key players in the economy with limited power in their hand.
Alans Greenspan ( former Chairman of the Federal Reserve) and YV Reddy ( Former Chairman of RBI) were credited with far greater power then they ever had and with responsibility for outcomes largely beyond their control. Central bankers actually have very limited tools and hence limited powers.
Reddy in India understood View full article »
Before the market opens there are 3 main issues that is going to determine this week ahead. Result of the Greek elections , Reserve Bank of India (RBI) credit policy review later today — if a rate cut is not going to stimulate investment, but has the potential to stimulate inflation. Not to forget clarity on the likely successor to finance minister Pranab Mukherjee.
From Greece‘s pro-euro conservatives win election, official estimate says which looks positive to the Asian markets. The Euro cup 2012 also lands in to the irony Germany vs Greece View full article »
Yesterday was an event full day despite the nationwide strike by the NDA and other political parties against the petrol price hike by the ruling government. The losses of yesterday India closed yet to be ascertained, but definitely a day close loss in the Indian economy would be much more than the oil companies made it. The Indian economy grew at 5.3% in the fourth quarter of the last fiscal. Impacting the expectation of India growth story of growing more than 7% .
Bit surprised to see lot of statements has been made towards the RBI on account of tight monetary policy View full article »
When INR touched the level of 56 against 1$, the first sms I received “Ab Tak – 56″. One of the thriller movie in Bollywood. The other msg that I received which is now trending in twitter the famous dialogue of an Indian flick “Amitabh Bachchan has demanded at all payments to him be made in dollars instead of INR. Kyunki main aaj bhi gire huye paise nahi uthaata”
The Rupee has been trapped in a vicious circle, the free fall is on the roll, View full article »
When INR touched 55 versus 1 dollar it made the record, for some of the traders it was a key level. From the data on the RBI the dollar has appreciated by approximately 22 per cent in the last 1 year. This is a major move after the crisis of 1991.
Obviously the answer to above is difficult to analyze, because in the normal circumstances demand and supply decide the market determined rates. We do not have free market for the forex. The rupee has never been convertible on capital account. The Reserve Bank of India still has a variety of controls on who may buy foreign exchange and for what purpose in the market. View full article »
Last night I was a part of Bloomberg Next at Four Seasons Mumbai Worli organised by Bloomberg. The theme was based on emerging markets serve as the world’s economic growth engine amidst the global turbulence. The distinguish speaker was the CIO one of the leading mutual funds share his thoughts on the topic India beyond silk and spice. View full article »
I do not know why but somebody wanted me to define some basics on Yield spreads, that whether Yield spreads can judge the risk environment in an economy ?
Yield spreads are good tools to judge the risk environment in an economy a lower yield spread means that the issuer of debt is in a situation to demand loans at a lower spread above the yield of government security which in turn shows the presence of ample liquidity.
As far as economic growth is concerned a lower yield spread indicates greater amount of liquidity available for growth View full article »
This is the most event full day in the country,continuing from my last post the India Budget 2012 , the expectations are high because the world biggest democracy has more challenges on every front be it from the basic amenities like toilets. India has more cell phones than toilets Yesterday the Economic survey came out and The survey estimates that GDP will grow 7.6% in 2012-13 and expand at 8.6% in the year after that but the pace is dependable on reform to be optimistic.
Inflation remains the key : Even the survey projected danger of high inflation is not yet over and the government should work to gently bring it down below 5.Income distribution is the another challenge. View full article »