Nobody will be surprised if the Reserve Bank of India (RBI) raises the repo or repurchase rate by 25 basis points (bps) to 7.75% on 29 October when it announces its second quarter monetary policy. It may do so to fight rising inflation and, more importantly, rising inflation expectations.
As expected by a large segment of the market, Reserve Bank of India (RBI) governor Raghuram Rajan has raised the repurchase, or repo rate—the rate at which the Indian central bank infuses short-term liquidity in the system—by a quarter percentage point to 7.75% and cut the marginal standing facility (MSF) rate by an identical margin to 8.75%.
Reserve Bank of India (RBI) governor Raghuram Rajan’s recent statement in Washington that the Indian banking regulator would soon release norms for a larger role by foreign banks in India and that it could be one “big, big opening” as “one could even contemplate taking over Indian banks”, led to two things last week. Shares of small and mid-sized private banks surged on expectations that foreign banks may soon be able to take over local lenders. Also, senior executives of some large foreign banks have seriously started discussing their game plan in the new regime.
US President Barack Obama last week nominated Janet L. Yellen to head the US Federal Reserve Board. If her appointment is confirmed by the Senate, Yellen would be the first woman to head the US central bank since the Fed became operational in 1914 after then president Woodrow Wilson signed the Federal Reserve Act into law on 23 December 1913.
Will Reserve Bank of India (RBI) governor Raghuram Rajan increase the policy rate again when the Indian central bank announces its quarterly review of monetary policy on 29 October? The wholesale inflation number for September suggests so but Rajan said in an interview last week that he would look at inflation in the context of economic growth while taking a call on interest rates. Wholesale inflation, in September, accelerated to 6.46% from a year earlier, higher than the expectation of most analysts, and a significant increase over August’s 6.
Mumbai: The news on the economy will only start getting better from now, Reserve Bank of India (RBI) governor Raghuram Rajan said in an interview on Tuesday, his first to an Indian newspaper since he took charge at the central bank on 4 September. Rajan listed the factors behind his assessment—rising exports in the second quarter, the possibility that the problems in US would be temporary and that lawmakers in that country would arrive at a fiscal deal, stronger agricultural production, and the revival of many projects that were stalled. Rajan added that the first signs of revival would likely surface in the sector that went down first—large infrastructure projects.
Mumbai: The news on the economy will only start getting better from now, Reserve Bank of India (RBI) governor Raghuram Rajan said in an interview, reflecting a growing view in many quarters that the Indian economy has bottomed out. He listed the factors behind his assessment: rising exports in the second quarter; the possibility that the US’s problems would be temporary and that lawmakers in that country would arrive at a fiscal deal; stronger agri production; and the revival of many projects that were stalled. Read the full interview here.
Indian microfinance industry’s poster boy Vikram Akula wants to come back to the industry. His return to the board of listed SKS Microfinance Ltd, a company which he had to leave after a bitter battle with the top management in late 2011, may not be a cakewalk but, at the same time, the current SKS management and board will not find it easy to block his return for long. What is the provocation for the SKS Trust, the original promoter of the company, pushing for Akula as its representative on the board? This has something to do with the creation of Telangana as the 29th state of India in a backward region lacking development, mostly the areas of the erstwhile princely Nizam state where opportunities are enormous.