• Met office sees below-average monsoon in 2014Reuters-14 hours ago

    India is likely to have below-average monsoon rainfall in 2014, raising the possibility that drought could stoke inflation and hit a sluggish economy dependent on the elements because half the country's farmland lacks irrigation. To cut dependence on rains, India plans to expand irrigated farmland by at least a tenth by 2017. The Indian Meteorological Department's (IMD) first monsoon forecast on Thursday was in line with the outlook of the World Meteorological Organisation that predicted mostly below-average rains in much of South Asia, including India. Below-average monsoons would have a negative impact on production of sugar, edible oil and pulses, potentially pushing up retail food inflation by one percentage point, he said.

  • Deserving the honourIndia Today Group-Wed 23 Apr, 2014 12:04 AM IST

    How do the winners of the two new banking licences - microfinance lender Bandhan Financial Services and infra institution IDFC Ltd - measure up to the challenges of operating as full-fledged banks?

  • A star abroad, RBI boss riles bond traders at homeReuters-Thu 17 Apr, 2014 2:12 PM IST

    Since taking the helm of the Reserve Bank of India, Raghuram Rajan's agenda to reform markets has put the noses of Mumbai bond traders firmly out of joint by upending practices that provided them with a relatively secure rate of return. Benchmark 10-year bond yields have risen more than half a percentage point since Rajan took office on Sept. 4, as the RBI has sharply restricted bond purchases and announced an unexpected shift in the focus of monetary policy to consumer inflation from wholesale prices. While the dealing community in India's financial capital concedes that Rajan's reforms are necessary for the longer term, many traders complain that he has gone too far too quickly, and without consulting the markets. Their gripes stand in contrast with the high-profile central bank chief's glowing global reputation as a capable technocrat who has been instrumental in guiding the rupee through its worst turmoil since India's balance of payments crisis in 1991.

  • Big business and election: Time to decouple the twoIANS-Wed 16 Apr, 2014 10:28 AM IST

    Politics has been integral to the Indian business milieu as building political connections is part of doing business in the country. But it is for the first time some of India's corporate tycoons are being named openly in a charged election campaign and their close links have become part of the popular conversation, stuff of the national political discourse. "Would the 2014 election be fought between the Aam Aadmi Party and Mukesh Ambani, with Rahul (Gandhi) and (Narendra) Modi being agents of Mukesh Ambani?", Arvind Kejriwal asked on Twitter at the very start of the campaign. Days later, Manish Tiwari, Congress spokesperson, added more grist saying that India is seeing its "Rockefeller moment" -- a reference to the business houses backing the Bharatiya Janata Party prime ministerial candidate Narendra Modi just as the Rockfellers in the US at one time did.

  • Food prices push inflation up, limit RBI's room to actReuters-Tue 15 Apr, 2014 7:57 PM IST

    Rising food prices drove inflation in India up more than expected in March, reversing a slowdown and leaving the RBI with less room to support the economy amid fresh signs of slowing growth. The pick-up ...

  • Tensions over money flows bode poorly for global economyReuters-Sun 13 Apr, 2014 11:11 AM IST

    For a bunch of people who just agreed the global economy is doing better, top officials from the world's rich and poor nations sound rather worried. For poor nations, the easy monetary policies in advanced economies are leading to big swings in capital flows that could destabilize emerging markets. For rich countries, the hoarding of currency by developing nations is blocking progress toward a more stable global economy. Those tensions, which have been brewing for years, seemed to be rising as finance ministers and central bank chiefs from the Group of 20 economies gathered last week in Washington, as evidenced by harsh words from Washington and Delhi.

  • Cool reception for RBI chief urging global cooperationReuters-Fri 11 Apr, 2014 5:33 AM IST

    The head of the Reserve Bank of India (RBI) ran into a wall of resistance on Thursday when he urged some counterparts in developed economies to more formally consider the effects their domestic stimulus has on emerging markets. Alongside central bankers from the United States, Europe, and Brazil, Raghuram Rajan took the stage at a high-profile event here to list his proposals for better monetary cooperation and a global "safety net" that could provide funds for countries in case of economic emergency. He has grown increasingly vocal for change given how hard the currencies and stocks of emerging economies such as India have been rocked by big shifts in capital flows brought on by the unprecedented monetary accommodation in rich nations. Emerging markets absorbed a flood of investment in the wake of the global recession as central banks in developed nations sharply depressed interest rates, sending investors scrambling for higher yields in countries like Turkey, Argentina and India.

  • RBI governor Rajan urges global crisis 'safety net'Reuters-Thu 10 Apr, 2014 10:23 PM IST

    Reserve Bank of India (RBI) Governor Raghuram Rajan on Thursday proposed the creation of a global "safety net" administered by a multilateral body such as the International Monetary Fund (IMF) that could provide funds for countries in case of economic emergency. The RBI governor went on to propose the appointment of "an impartial international assessor" who could examine the effects of unconventional central bank monetary policies on the global economy, although he did call this recommendation "a little too idealistic." "We have to design a better multilateral liquidity safety net so that countries do not feel they are on their own in managing market turmoil, and so that they do not build enormous stockpiles of reserves," the text of the speech read. The Fed's policies, adopted gradually in the aftermath of the 2008 global financial crisis, had propped up emerging market assets, but hit India hard last year when investors feared the U.S. central bank would start unwinding its programme.

  • Centre seeks EC nod for RBI deputy gov appointmentContify Banking-Thu 10 Apr, 2014 4:20 PM IST

    April 10: The Government of India has sought approval from the Election Commission on the appointment of a new successor to the Reserve Bank of India's deputy governor position, Business Line reported. ...

  • Consumer inflation rate forecast to edge up in MarchReuters-Thu 10 Apr, 2014 9:56 AM IST

    India's consumer inflation rate is forecast to have edged up slightly in March due to higher food prices, and factory output in February is expected to have risen at its fastest annual pace in five months, a Reuters poll shows. The data comes as voting gets underway in India's general election. The Reuters poll found consumer price and wholesale price measures of inflation are expected to rise, but not by enough to prompt a policy response from the Reserve Bank of India.

  • FinMin says no to RBI's proposal to split CMD post in PSBsContify Banking-Wed 9 Apr, 2014 4:09 PM IST

    April 9: The ministry of finance has denied international experts' claim that the post of chairman and managing director (CMD) in state-run banks enjoy absolute powers and refused to implement the proposal of the Reserve Bank of India to bifurcate the position. "The board is headed by CMD (but that) does not mean that CMD enjoys absolute power and the board of the bank is subservient to CMD", the ministry told the central bank governor Raghuram Rajan.

  • Rupee upside capped at 57-58 against the $IANS-Tue 8 Apr, 2014 10:16 AM IST

    Last May, after the US Federal Reserve first announced a likely roadmap for Quantitative Easing (QE) taper, Morgan Stanley labelled India as a "fragile five" club member with other emerging economies like Turkey, South Africa, Brazil and Indonesia. Going forward, the European Central Bank and the Bank of Japan are widely anticipated to add monetary stimulus as has been written in this column in previous weeks.

  • Five key challenges a Modi government would faceReuters-Tue 8 Apr, 2014 2:43 AM IST

    NEW DELHI/MUMBAI (Reuters) - From convincing sceptical bond investors that the fiscal deficit can be contained to concerns that El Nino will devastate agricultural crops, any new government in India will face urgent and critical challenges with no easy solutions. Expectations the Bharatiya Janata Party (BJP) and its leader Narendra Modi will win elections that started this week with a new approach to India's economic problems have helped send shares to record highs and the rupee to an eight-month peak. Should Modi win the elections, his government will face its first credibility test with markets when he delivers a budget by June or July that will need to show the country can realistically contain its fiscal deficit.

  • Bracing for ChallengesIndia Today Group-Tue 8 Apr, 2014 12:04 AM IST

    Raghuram Rajan is preparing to deal with concerns that may arise when a new government takes charge.

  • Post-election showdown looms for Raghuram RajanReuters-Fri 4 Apr, 2014 2:44 AM IST

    India's high-profile RBI governor is likely to come under political pressure to retreat from his hawkish stance on inflation if opposition leader Narendra Modi wins power in the general election. Strategists ...

  • Rupee hits one-week low on importer demand; seen rangeboundReuters-Thu 3 Apr, 2014 5:47 PM IST

    Traders said the rupee was also hit after Reserve Bank of India Governor Raghuram Rajan was quoted by Mint newspaper as saying the rupee was "too strong" at 55 to the dollar. The RBI governor's comments irked importers who bought today, but largely the rupee will remain rangebound," said Vikas Babu Chittiprolu, a senior foreign exchange dealer with Andhra Bank, who sees the unit in a 59.60 to 60.80 range this week.

  • Gold premiums seen falling further on any ease in trade curbsReuters-Thu 3 Apr, 2014 4:25 PM IST

    Gold premiums in India are expected to fall from current levels of about $30 an ounce after the Reserve Bank of India (RBI) indicated it is considering removing some of the curbs to trade that have crippled imports. India, the second biggest consumer of gold after China, last year imposed a record 10 percent import duty on the metal and said a fifth of all shipments should be re-exported as finished product to help narrow its current account deficit (CAD). But the recent easing of the CAD has given Finance Minister P. Chidambaram and the head of the central bank, Raghuram Rajan, the space to consider lifting the restrictions on gold. "I think what we have to do is slowly and steadily take actions to remove some of these curbs," Reserve Bank of India (RBI) Governor Raghuram Rajan told analysts on Wednesday.

  • Rupee to weaken slightly over next year - Reuters pollReuters-Thu 3 Apr, 2014 2:40 PM IST

    The rupee's recent rally is set to reverse course later this year as upbeat sentiment ahead of a general election wears off and economic growth remains slow, a Reuters poll found. Expectations that the pro-business opposition Bharatiya Janata Party (BJP) will win the election and, in turn, attract more investment is in part responsible for the benchmark BSE Sensex hitting a new lifetime high of 22,620.65 on Thursday. That sell-off was mostly in reaction to the U.S. Federal Reserve's plan to taper its massive stimulus programme, which made investors dump riskier assets, including the rupee, combined with a slowdown in India's economic growth to a four-year low. While investor sentiment has since improved, strategists do not expect the rupee's strength to continue.

  • Rupee at 55/dollar would be too strong - RajanReuters-Thu 3 Apr, 2014 2:12 PM IST

    Reserve Bank of India Governor Raghuram Rajan said the rupee at 55 to the dollar would be too strong, the Mint newspaper reported on Thursday, a day after the rupee touched an eight-month high. In the summer of last year, I said 70 (against the dollar) would be too weak," Rajan said in an interview. On Wednesday, Rajan had said the rupee strengthening to 45 or 50 per dollar could hit exports, in an interview to CNBC-TV18, and added saying the RBI was fine with a "certain amount of leeway" in the currency.

  • RBI grants IDFC, Bandhan Financial bank licencesReuters-Thu 3 Apr, 2014 9:19 AM IST

    The Reserve Bank of India (RBI) on Wednesday granted two preliminary licences to set up new banks in a country where only one household in two has access to formal banking services. The approval of licences for IDFC Ltd (NSI:IDFC.NS - News) and Bandhan Financial Services marks the start of a cautious experiment for a sector dominated by lethargic state lenders, many of which are reluctant to expand into rural areas or towns where banking penetration is low. No new Indian bank has been formed since Yes Bank (YESB.NS) in 2004. RBI Governor Raghuram Rajan said in a television interview earlier on Wednesday that banking licences will be an on-tap facility, meaning the central bank will keep issuing new licences to applicants it deems fit as and when required.

  • RBI grants IDFC, Bandhan Financial bank licences in cautious experimentReuters-Wed 2 Apr, 2014 9:47 PM IST

    The Reserve Bank of India (RBI) on Wednesday granted two preliminary licenses to set up new banks in a country where only one household in two has access to formal banking services. The approval of licences for IDFC Ltd (NSI:IDFC.NS - News) and Bandhan Financial Services marks the start of a cautious experiment for a sector dominated by lethargic state lenders, many of which are reluctant to expand into rural areas or towns where banking penetration is low. No new Indian bank has been formed since Yes Bank (YESB.NS) in 2004. RBI Governor Raghuram Rajan said in a television interview earlier on Wednesday that banking licences will be an on-tap facility, meaning the central bank will keep issuing new licences to applicants it deems fit as and when required.

  • RBI says banks do not need to cut HTM holdings for nowReuters-Wed 2 Apr, 2014 8:39 PM IST

    The Reserve Bank of India clarified earlier remarks by Deputy Governor H R Khan to note that only the time limit for spreading bond losses held under banks' mark-to-market portfolios had lapsed on March 31, and not the waiver on bringing down the ratio of debt under the held-to-maturity segment. "In response to some media reports, Reserve Bank has clarified that as indicated in its circular dated August 23, 2013, the option for spreading the Mark to Market losses over the three quarters has ended on March 31, 2014, and no further extension has been allowed," the RBI said in a filing on Wednesday. Earlier in the day, Khan had created confusion in markets after he was asked by an analyst during a teleconference about a temporary waiver from a rule that banks bring down the ratio of debt under the held-to-maturity (HTM) category to 23 percent. He had responded by saying the waiver had lapsed, and traders had believed the remark meant that banks would need to cut down their ratio of debt under the HTM category to 23 percent.

  • RBI to take steps for curbing high level window dressing by banksContify Banking-Wed 2 Apr, 2014 3:55 PM IST

    The Reserve Bank of India is likely to take steps in order to curb on the high levels of window dressing practiced by banks, which enhances the yearend liquidity pressures on the system, reported The Economic Times. Raghuram Rajan, governor, RBI, said that the banking regulator is currently in discussions with banks on the ways to generate more liquidity during the yearend. Yearend window dressing by banks has led to a liquidity crunch in March this year but RBI's capital infusion eased the lenders out of the cash tightened situation, stated an RBI bi-monthly report.

  • Rajan says call rate should hover near repo rateReuters-Wed 2 Apr, 2014 3:53 PM IST

    The Reserve Bank of India will try to manage short-term liquidity to ensure the overnight call money rate is closer to the policy repo rate, the central bank governor Raghuram Rajan said on Wednesday. ...

  • RBI deputy says banks should cut HTM holdingsReuters-Wed 2 Apr, 2014 3:47 PM IST

    Reserve Bank of India Deputy Governor H.R. Khan said banks needed to bring down the ratio of debt under the held-to-maturity category to 23 percent to comply with a previous mandate asking lenders to do ...

  • Rajan says rupee gains to 45-50/dlr would hit exportsReuters-Wed 2 Apr, 2014 2:10 PM IST

    Reserve Bank of India Governor Raghuram Rajan told a TV channel a "substantial" strengthening in the rupee to 45 or 50 per dollar could hit exports, although he added the RBI was fine with "a ...

  • Rajan says RBI board committee to decide on bank licencesReuters-Wed 2 Apr, 2014 12:28 PM IST

    The Reserve Bank of India Governor Raghuram Rajan said on Wednesday a final call on issuing new bank licenses would only be given after a decision is reached by the central bank board committee, without ...

  • RBI chief says RBI board committee to decide on bank licencesReuters-Wed 2 Apr, 2014 12:25 PM IST

    The Reserve Bank of India Governor Raghuram Rajan said on Wednesday a final call on issuing new bank licenses would only be given after a decision is reached by the central bank board committee, without ...

  • EC nod for RBI to issue new bank licencesIANS-Tue 1 Apr, 2014 7:08 PM IST

    New delhi, April 1 (IANS) The Election Commission Tuesday allowed the Reserve Bank of India (RBI) to issue new bank licences before the completion of general elections next month. "The commission is of the view that Reserve Bank of India may take necessary action as deemed appropriate by the Bank," the EC said on its website. The RBI has sought the Election Commission's nod over the issue of grant of new bank licences as a matter of caution on not violating the poll code of conduct, which came into force with the March 5 announcement of general elections. Eralier Tuesday, Reserve Bank of India Governor Raghuram Rajan said the granting of new bank licences has no link with politics and the process is purely economic and regulatory.

  • RBI keeps key policy rates on hold; EMIs to remain unchangedIANS-Tue 1 Apr, 2014 6:56 PM IST

    Mumbai, April 1 (IANS) The Reserve Bank of India (RBI), as expected, left key interest rates unchanged in its first bi-monthly monetary policy review Tuesday and said near-term tightening is not expected if inflation continues to ease. The reverse repo rate, or the interest that the RBI pays to commercial banks when they park their surplus short-term funds with the central bank, has been adjusted to 7 percent. The Cash Reserve Ratio (CRR) is left unchanged at 4 percent. The status quo in key policy rates mean the equated monthly installments (EMIs) on home, auto and other loans would remain unchanged as these rates determine lending and borrowing rates of the commercial banks.

  • RBI leaves rates on hold; election, monsoon in focusReuters-Tue 1 Apr, 2014 6:19 PM IST

    With elections looming and an uncertain economic growth outlook, the Reserve Bank of India (RBI) left interest rates on hold on Tuesday, as expected, and indicated it will keep rates steady in the near term if inflation eases towards the bank's targeted level. The RBI kept its key repo rate at 8.00 percent, in line with the forecast of all 53 economists in a Reuters poll last week, although RBI Governor Raghuram Rajan warned of risks that inflation could rise even as risks to economic growth are to the downside. Since taking office in September, Rajan has raised the repo rate three times by a total of 75 basis points, but with India headed for elections starting next week and uncertainty over monsoon rains due to begin in June, all 53 economists in a Reuters poll had forecast Rajan would leave rates unchanged at its April meeting. India's consumer price index inflation eased to 8.10 percent in February - a 25-month low that brings it near the RBI's January 2015 target of 8 percent, while the wholesale price index slowed to a 9-month low of 4.68 percent.

  • RBI chief says current policy rate appropriately setReuters-Tue 1 Apr, 2014 4:38 PM IST

    The Reserve Bank of India should not be in the business of bailing out banks by infusing cash to make up for year-end distortions and the current policy rate has been appropriately set, the central bank chief said post the policy review on Tuesday. We believe the rate is appropriately set right now given our anticipation of events for the next few months," Raghuram Rajan told reporters at the post policy press briefing. The central bank left its policy interest rate unchanged, as expected, and said it does not expect further near-term policy tightening if headline inflation continues to ease towards the bank's targeted level.

  • RBI bars foreign investors from short-term local debtReuters-Tue 1 Apr, 2014 4:37 PM IST

    The Reserve Bank of India (RBI) on Tuesday barred foreign investors from buying government debt with less than one-year maturity to encourage longer-term fund inflows and reduce the country's dependence on hot money. The steps had been expected given RBI officials have expressed concern that foreign institutional investors (FIIs) are excessively invested in treasury bills, creating concerns about the sturdiness of these flows. Regulatory data showed foreign funds have utilised almost 90 percent of the permissible limit of $5.5 billion in treasury bills, whereas overall debt limit utilisation stands at just about 60 percent. Existing investments in treasury bills would be allowed to taper off.

  • Issuing bank licences has nothing to do with politics: RBIIANS-Tue 1 Apr, 2014 1:16 PM IST

    Mumbai, April 1 (IANS) The granting of new bank licences has no link with politics and the process is purely economic and regulatory, Reserve Bank of India Governor Raghuram Rajan said Tuesday. "This (issue of bank licence) is not in any way a political process, it is an economic and regulatory process and is to be seen as distant and different (from politics)," Rajan told media persons here after announcing the RBI's monetary policy.

  • RBI keeps key policy rates unchanged; pegs growth for 2014-15 at 5.5% (Update:RBI)ANI-Tue 1 Apr, 2014 1:02 PM IST

    Mumbai, Apr 1 (ANI): The Reserve Bank of India (RBI) today kept the repo rate unchanged at 8 per cent and pegged 2014-15 GDP growth at a central estimate of 5.5 per cent.

  • RBI leaves policy rates unchanged in first bi-monthly reviewIANS-Tue 1 Apr, 2014 12:28 PM IST

    Mumbai, April 1 (IANS) The Reserve Bank of India (RBI), as expected, left key interest rates unchanged in its first bi-monthly monetary policy review Tuesday and said near-term tightening is not expected if inflation continues to ease. The reverse repo rate, or the interest that the RBI pays to commercial banks when they park their surplus short-term funds with the central bank, has been adjusted to 7 percent. The Cash Reserve Ratio (CRR) is left unchanged at 4 percent. The status quo in key policy rates mean the equated monthly installments (EMIs) on home, auto and other loans would remain unchanged as these rates determine lending and borrowing rates of the commercial banks.

  • RBI keeps repo rate unchanged at 8% in monetary policy reviewANI-Tue 1 Apr, 2014 12:21 PM IST

    Mumbai, Apr 1 (ANI): The Reserve Bank of India (RBI) on Tuesday kept its key policy interest rate unchanged at eight percent.

  • RBI leaves key policy rates unchangedIANS-Tue 1 Apr, 2014 11:30 AM IST

    Mumbai, April 1 (IANS) The Reserve Bank of India (RBI) left key interest rates unchanged in its first bi-monthly monetary policy review Tuesday. The repo rate or the interest that banks pay when they borrow money from the RBI to meet their short-term fund requirements, has been left unchanged at 8 percent, while the reverse repo rate, or the interest that the RBI pays to commercial banks when they park their surplus short-term funds with the central bank, has been adjusted to 7 percent. The Cash Reserve Ratio (CRR) is left unchanged at 4 percent. "The only thing that is surprising in the monetary policy today is lack of surprise," Governor Raghuram Rajan said while announcing the policy statement.

  • Status quo seen in Indian central bank's first bi-monthly reviewIANS-Mon 31 Mar, 2014 10:44 AM IST

    New Delhi, March 31 (IANS) The stage is set for the first bi-monthly monetary policy review of the Reserve Bank of India (RBI) Tuesday and the expectation in the financial world is for interest rates to be left untouched -- that is, no change in your EMIs towards housing, auto or consumer goods loans. Analysts said RBI Governor Raghuram Rajan would prefer maintaining a status quo on key rates considering the macro-economic data and the uncertainty over the new government's policy after the general elections. The RBI should maintain a status quo, given the inflation level and growth data and election," Arun Singh, a senior economist at Dun & Bradstreet, told IANS. The central bank has maintained a tight monetary policy during most part of the second term of the Prime Minister Manmohan Singh government, to reign in inflation that remain much above the comfort level of under 5 percent.

  • Rupee on a roll, but can it pierce through 60?CNBC-Fri 28 Mar, 2014 9:14 AM IST

    The Indian rupee has staged an impressive turnaround in the recent months, but analysts say it may struggle to break through the key level of 60.

  • RBI to keep rates on hold next week - Reuters PollReuters-Thu 27 Mar, 2014 12:04 PM IST

    REUTERS - The Reserve Bank of India (RBI) is expected to keep its key interest rate steady at 8 percent on April 1 as inflation has eased, according to all 53 economists polled by Reuters. In his fight to lower stubbornly high inflation, RBI chief Raghuram Rajan has hiked interest rates thrice since he took over in September, surprising markets on two of those occasions. But the RBI is expected to hold fire next week after February wholesale price inflation slowed to below the central bank's commonly perceived 5 percent comfort level for the first time in 9 months and retail price rises eased to a 25-month low. "A status quo looks likely, given that the RBI is under no immediate pressure to take action given the dip in both CPI and WPI," said Vishnu Varathan, an economist at Mizuho Bank.

  • EC to ask clarifications from RBI on new banking licensesContify Banking-Fri 21 Mar, 2014 3:54 PM IST

    New Delhi: The Election Commission of India may seek clarifications from the Reserve Bank of India on timing and the urgency to grant new banking licenses by the end of current fiscal, The Times of India reported citing a senior EC official. Anil Ambani-led Reliance group, Aditya Birla Group, India Post and IFCI were among the applicants.

  • RBI chief says haven't moved to targeting inflationReuters-Fri 21 Mar, 2014 12:26 PM IST

    Reserve Bank of India Governor Raghuram Rajan said on Friday the central bank has not yet moved to an inflation target, and was still exploring the suggestions on the subject drafted by a panel with the government. A panel headed by Reserve Bank of India deputy governor Urjit Patel recommended in January moving to an inflation target, with an aim to eventually bring down consumer-price based inflation to 4 percent with a 2 percent band on either side.

  • RBI to keep key rates unchanged in next monetary policy, say analystsContify Banking-Fri 14 Mar, 2014 6:00 PM IST

    Mumbai: The Reserve Bank of India is expected to unchanged key rates in the next monetary policy, which will be announced on April 1 despite decline in inflation rates. According to credit rating agency CARE Ltd, RBI governor Raghuram Rajan would ensure that the inflation rate continues to fall before the monetary policy looks to promote growth. Central Statistics Office Wednesday released a data showing that the consumer price inflation has slipped to 8.1% in February from 8.79% in the previous month. Since his appointment, the RBI governor has thrice increased rates to 8% keeping a hawkish stance at inflation rate.

  • Wholesale inflation eases to nine-month low of 4.68 pctReuters-Fri 14 Mar, 2014 1:28 PM IST

    The wholesale price-based inflation eased to a nine-month low in February as food and fuel prices moderated, raising expectations that the RBI would leave interest rates unchanged at its policy review next month. The wholesale price index (WPI), long regarded as India's main inflation measure, rose 4.68 percent last month, data showed on Friday, compared with a 4.99 percent jump forecast by economists in a Reuters poll. "For policy, CPI is more relevant and based on latest CPI reading, we expect RBI to keep rates steady in the April policy review," said A. Prasanna, an economist at ICICI Securities Primary Dealership Ltd in Mumbai. However, the next reading could go up on back of higher food prices and the base effect."

  • India Story: Industrial Growth At 0%, Inflation at 8%IndiaSpend-Thu 13 Mar, 2014 5:30 AM IST

    With the financial year 2013-14 coming to a close, it could be a matter of great relief for everybody, including the Aam Aadmi, that the economy is not contracting sharply.   The latest data on industrial production is another signal towards a slowdown but there is no contraction or recession. Yes, we are indeed focusing on the good news.   The index of industrial production (IIP), an indicator of industrial activity in the country, picked up marginal in January.

  • Economy performs better than forecast before electionReuters-Thu 13 Mar, 2014 12:37 AM IST

    India's flagging economy delivered rare good news on Wednesday with a slight expansion of industrial production and further cooling in consumer prices, offering some respite to the ruling coalition before next month's general election. Improved consumer demand helped industrial output expand 0.1 percent on year in January, the first growth in four months, data from statistics ministry showed on Wednesday. "Today's data show India's beleaguered economy moving in the right direction, but still far from healthy," said Miguel Chanco, India Economist at Capital Economics in Singapore. The data showed production of consumer goods, a proxy for consumer demand, contracted an annual 0.6 percent in January, an improvement from a 4.7 percent drop a month ago.

  • Economic data likely to point to slow growth, high inflationReuters-Wed 12 Mar, 2014 10:41 AM IST

    Consumer inflation and industrial output data on Wednesday will likely offer little evidence of a respite from high inflation and weak economic growth before a general election that begins next month. Asia's third-largest economy has been struggling to recover from a stagflation-type situation where economic growth has been stuck below 5 percent for the past seven quarters while prices continue to rise at a fast clip. Data for retail inflation and industrial output, due later on Wednesday, will likely show the same trend, according to a Reuters polls of economists. But industrial output is forecast to post a fourth straight fall in January, the longest phase of contraction that Indian factories have suffered in more than five years.

  • Economic data likely to point to weak growth, high inflationReuters-Wed 12 Mar, 2014 2:36 AM IST

    Consumer inflation and industrial output data on Wednesday will likely offer little evidence of a respite from high inflation and weak economic growth before a general election that begins next month. Asia's third-largest economy has been struggling to recover from a stagflation-type situation where economic growth has been stuck below 5 percent for the past seven quarters while prices continue to rise at a fast clip. Data for retail inflation and industrial output, due later on Wednesday, will likely show the same trend, according to a Reuters polls of economists. But industrial output is forecast to post a fourth straight fall in January, the longest phase of contraction that Indian factories have suffered in more than five years.

  • India halts plan to join global bond indexes, defers Euroclear - sourcesReuters-Tue 11 Mar, 2014 5:38 PM IST

    India has put on ice plans to join major emerging market bond indexes that would require removal of restrictions on capital inflows, two sources said, taking a decision that knocked the rupee, but showed balance of payments concerns were easing. A separate plan to explore joining Euroclear, the world's largest securities settlement system, has also been deferred until the next government takes charge after elections in April and May. That plan could have further opened up the market to portfolio capital inflows. Finance Minister P. Chidambaram and Raghuram Rajan, Reserve Bank of India governor, initiated talks with index compilers including JP Morgan in the hope of attracting billions of investment dollars after the rupee tumbled to a record low last August. "The plan for joining global bond indices has virtually been dumped over differences of abolishing investment limits on FIIs (foreign institutional investors) in government bonds," a senior official with direct knowledge of the matter told Reuters.

  • RBI may issue new banking licenses in next fiscalContify Banking-Tue 11 Mar, 2014 5:32 PM IST

    New Delhi: The Reserve Bank of India is evaluating the report submitted by a high level external committee headed by former RBI governor Bimal Jalan and is likely to issue new licenses in the coming fiscal, a CNBC-TV18 report stated. An RBI internal panel is scrutinizing the report and will hold a meeting with the Jalan panel starting on March 12 for three days, Rajan had said on Friday. The central bank board will seek nod from the Election Commission after the due diligence has been completed by the internal panel. The issue of licenses may take place in next fiscal, the channel stated.

  • Gathering StormIndia Today Group-Tue 11 Mar, 2014 12:03 AM IST

    The upheaval at United Bank of India once again highlights the disproportionately high non-performing assets of state-run banks. The situation is rapidly going out of control.

  • Retail inflation seen cooling, factory output contractingReuters-Mon 10 Mar, 2014 1:32 PM IST

    REUTERS - Moderating food prices are likely to have slowed inflation in India during February, giving the RBI some relief after it raised interest rates three times since September to dampen price pressures, a Reuters poll showed. Last year's economic growth of 4.79 percent was India's worst performance in a decade, and opinion polls show voters are likely to abandon the ruling Congress Party at a general election next month. The poll forecast annual retail price inflation likely eased to 8.35 percent in February, the slowest in two years, after standing at 8.79 percent in January. Core retail price inflation in January had remained sticky at around 8 percent, a level deemed uncomfortably high by Reserve Bank of India Governor Raghuram Rajan.

  • RBI to issue new banking licenses soon after EC's approvalContify Banking-Sat 8 Mar, 2014 4:47 PM IST

    New Delhi: The Reserve Bank of India governor Raghuram Rajan Friday said that new banking licenses will be issued in coming few weeks after receiving approval from the Election Commission as the model ...

  • Government to set up inflation target, RBI to implement - ChidambaramReuters-Sat 8 Mar, 2014 12:01 AM IST

    The government has the right to set the country's inflation target, while the Reserve Bank of India's (RBI) role is to implement the decision, Finance Minister P. Chidambaram said in a joint news conference with the RBI governor. The comment by Chidambaram comes after a RBI panel in January proposed moving to an inflation target of 4 percent in three years, with a 2 percent band on either side when setting monetary policy, sharply below current levels. But RBI Governor Raghuram Rajan has since publicly reiterated his agreement that the government and parliament would have the final say in any decision on whether to adopt an inflation target.

  • Recover Rs 10 mln bad loans daily till March-end: FinMin to United Bank of IndiaContify Banking-Fri 7 Mar, 2014 5:23 PM IST

    New Delhi: The ministry of finance has asked the beleaguered state-run lender United Bank of India to make loan recovery of Rs 10 million on daily basis from each circle till March-end, The Economic Times reported. United Bank is emphasizing on recovery of both retail and corporate loans and is confident of achieving the target, a senior bank official told ET. The bank has made a recovery of Rs 4 billion in cash and has upgraded accounts worth Rs 8 billion, Chidambaram had said on Wednesday after a quarterly performance review meeting with the chiefs of the state-run lenders. He further added that United Bank of India was not an alarming case and a discussion on the crisis with RBI governor Raghuram Rajan is scheduled on March 7.

  • FinMin to discuss United Bank issue with RBI on Mar 7Contify Banking-Thu 6 Mar, 2014 4:34 PM IST

    New Delhi: The ministry of finance will discuss with the Reserve Bank of India on the crisis being faced by the state-run lender United Bank of India on account of increased non-performing assets (NPAs). Finance Minister P Chidambaram Wednesday said that the Kolkata-based lender was not an alarming case and he will discuss the bad loan crisis with RBI governor Raghuram Rajan at meeting of the Financial Stability Development Council scheduled on March 7. The bank has made a recovery of Rs 4 billion in cash and has upgraded accounts worth Rs 8 billion, Chidambaram said adding that the bank has lowered its NPAs by Rs 12 billion. Speaking on the probability of a merger, Chidambaram said that he prefers consolidation in general but United Bank was a different case.

  • New deadline to exchange pre-2005 currency notesYahoo Finance India-Tue 4 Mar, 2014 11:30 AM IST

    The Reserve Bank of India has extended the date for exchanging currency notes that were issued before 2005 to 1 January 2015.

  • RBI chief says policy rate is appropriately setReuters-Wed 26 Feb, 2014 6:40 PM IST

    India's policy interest rate is appropriately set, said RBI Governor Raghuram Rajan, who has raised rates three times by a combined 75 basis points since September despite economic growth at a decade low. ...

  • Sluggish state auction exposes bond market reform hurdlesReuters-Wed 26 Feb, 2014 1:50 PM IST

    A move by India to make the pricing of roughly $30 billion in debt sold each year by individual states more market-based has met resistance from both issuers and investors, underscoring the difficulties it faces in deepening its bond markets. The Reserve Bank of India (RBI) this month proposed to scrap a 14-year-old system under which state debt is valued at a fixed spread of a quarter-percentage point over government bonds, though it has told Reuters the recommendation is not final. Two auctions of state debt held since the rule was proposed, including one on Tuesday, fell short of targets as investors, mainly state banks, worry that they will be forced to book losses if their holdings are subject to market pricing. If it becomes a rule, then investors are staring at losses on their existing portfolio," said Anindya Dasgupta, a managing director in Mumbai at UK-based lender Barclays.

  • Rajan says inflation views aligned with government - TVReuters-Mon 24 Feb, 2014 9:13 PM IST

    Reserve Bank of India (RBI) Governor Raghuram Rajan said the government and the central bank shared similar views on inflation management, while reiterating a call for the U.S. Federal Reserve to be more sensitive to emerging economies. Rajan's comments, in an interview with CNBC, come after Finance Minister P. Chidambaram last week chided the central bank over its focus on fighting inflation, saying the RBI needed to abide by government policy to promote economic growth. The RBI has raised interest rates by three-quarters of a percentage point since September to bring down consumer inflation, which fell to 8.79 percent last month from double digits in November, even as the government has traditionally preferred to focus on bolstering growth.

  • Inflation views aligned with government: RBI chief RajanReuters-Mon 24 Feb, 2014 5:53 PM IST

    Reserve Bank of India (RBI) Governor Raghuram Rajan said the government and the Reserve Bank of India (RBI) shared similar views on inflation management, while reiterating a call for the U.S. Federal Reserve to be more sensitive to emerging economies. Rajan's comments, in an interview with CNBC, come after Finance Minister P. Chidambaram last week chided the central bank over its focus on fighting inflation, saying the RBI needed to abide by government policy to promote economic growth. An RBI panel last month proposed the introduction of inflation targeting into monetary policy, with the specific aim of a consumer price index (CPI) of 4 percent, with a 2 percent band on either side. The RBI has raised interest rates by three-quarters of a percentage point since September to bring down consumer inflation, which fell to 8.79 percent last month from double digits in November, even as the government has traditionally preferred to focus on bolstering growth.

  • Box of SurprisesIndia Today Group-Sat 22 Feb, 2014 5:02 PM IST

    Raghuram Rajan has been mooting several radical ideas. How practical are they?

  • How will economy evolve if BJP coalition wins in 2014 General Election?MoneyWorks4me.com-Fri 21 Feb, 2014 4:53 PM IST

    Today the most talked about topic is ‘2014 General Election’. If one were to switch on any news channel today, we can be certain of one thing, there are showing either Election debates or what was said ...

  • Emerging markets must do homework: German ministerReuters-Fri 21 Feb, 2014 1:02 PM IST

    Emerging markets should get their own houses in order before demanding solidarity from other nations, German Finance Minister Wolfgang Schaeuble said. The troubles in emerging markets would be the main topic discussed by finance ministers and central bank chiefs at the G20 summit in Sydney this weekend, Schaeuble told CNBC in an interview broadcast on Friday. Stock, bond and currency markets in developing countries have convulsed in recent months, hit by concerns over weaker economic growth and the winding down of stimulus in the United States. Everyone must first of all do their own homework and then countries can demand solidarity from others," Schaeuble said.

  • Chidambaram to attend G20 finance ministers' meet in AustraliaANI-Fri 21 Feb, 2014 10:26 AM IST

    New Delhi, Feb 21 (ANI): Finance Minister P. Chidambaram will embark on a five day trip to Australia beginning today during which he will attend the G20 Ministerial meeting and also meet international ...

  • RBI will need to keep raising policy interest rate - IMFReuters-Fri 21 Feb, 2014 9:24 AM IST

    The Reserve Bank of India will need to continue raising its policy interest rate given the sticky nature of inflation, the International Monetary Fund said on Thursday. "The ingrained nature of inflation and inflation expectations mean that reducing inflation — even over a protracted horizon — will require significant increases in policy rates, which will weigh on growth," the IMF said in a report. "Should high inflation expectations persist and inflation remain sticky, a more front-loaded path of interest rate increases may be needed," the IMF said. RBI Governor Raghuram Rajan, a former IMF chief economist, has raised the key repo rate by 75 basis points to 8.00 percent since becoming head of India's central bank in September.

  • Australia sees India playing strong role in Sydney G-20 deliberations: EnvoyANI-Fri 21 Feb, 2014 8:58 AM IST

    New Delhi, Feb.21 (ANI): Australia envisions India playing a strong contributing role in the Group of Twenty (G-20) Finance Ministers' and Central Bank Governors' deliberations to be held on February 22 ...

  • India will need to keep raising policy interest rate - IMFReuters-Fri 21 Feb, 2014 12:18 AM IST

    The Reserve Bank of India will need to continue raising its policy interest rate given the sticky nature of inflation, the International Monetary Fund said on Thursday. "The ingrained nature of inflation and inflation expectations mean that reducing inflation — even over a protracted horizon — will require significant increases in policy rates, which will weigh on growth," the IMF said in a report. "Should high inflation expectations persist and inflation remain sticky, a more front-loaded path of interest rate increases may be needed," the IMF said. RBI Governor Raghuram Rajan, a former IMF chief economist, has raised the key repo rate by 75 basis points to 8.00 percent since becoming head of India's central bank in September.

  • FM says RBI must abide by government focus on growthReuters-Tue 18 Feb, 2014 3:21 PM IST

    The finance minister chided the central bank on Tuesday over its focus on fighting inflation, saying the Reserve Bank of India (RBI) also needed to abide by the government policy to promote economic growth. The comments by P. Chidambaram came after a central bank panel last month recommended making managing inflation its main policy objective, with a goal to explicitly target consumer price inflation of 4 percent, with a 2 percent band on either side. Opinion polls ahead of upcoming national elections - expected between April and May - predict voters will oust Chidambaram's Congress-led ruling alliance, in part over its failure to tame high food prices and revive economic growth.

  • January rate hike overruled external committee membersReuters-Mon 17 Feb, 2014 9:56 PM IST

    Reserve Bank of India (RBI) Governor Raghuram Rajan's surprise decision to raise interest rates last month was opposed by most external members of an advisory committee, minutes released on Monday showed. The RBI hiked its key interest rate by 25 basis points to 8 percent on January 28, saying it would dampen inflation and leave it better prepared to deal with the risk of major capital outflows as the U.S. Federal Reserve withdraws stimulus. Minutes released by the central bank showed a majority of the seven external members of a panel that advises on monetary policy suggested that rates should be held steady. Four of the six external members of the RBI's technical advisory committee (TAC) who attended the meeting on January 20 suggested no change in the repo rate, while two recommended a rate hike by 25 basis points.

  • Poll call: Nitish again links special status to Bihar's developmentIANS-Sun 16 Feb, 2014 12:08 PM IST

    Patna, Feb 16 (IANS) With the Lok Sabha polls round the corner, Bihar Chief Minister Nitish Kumar has once again linked the grant of special status to development in the hope of the ruling Janata Dal-United (JD-U) sweeping the state's 40 seats in parliament's lower house. "Give us your support and votes to elect our candidates to all 40 Lok Sabha seats in the state for realising the demand of special category status," Nitish Kumar has been repeatedly appealing during his party's sankalp rallies all over the state for the last two weeks. Time and again, he has declared that he would support the party at the centre that would grant special category status to Bihar. "I will not sit quiet till I attain the special status demand for development of Bihar.

  • Jan WPI inflation eases more than expected to eight-month lowReuters-Fri 14 Feb, 2014 1:47 PM IST

    India's wholesale price-based inflation eased to an eight-month low in January as food prices moderated, offering some relief to policymakers who have long battled to get a handle on surging prices. The wholesale price index (WPI), long regarded as India's main inflation measure, rose 5.05 percent last month, data showed on Friday, compared with a 5.80 percent jump forecast by economists in a Reuters poll. But in a worry for new Reserve Bank of India (RBI) chief Raghuram Rajan, core WPI inflation inched up to 3 percent last month, which analysts said was its highest level since April 2013. "...the euphoria over the moderation in the headline number needs to be balanced by the core inflation number which has inched up," said Siddhartha Sanyal, India economist at Barclays.

  • RBI to facilitate fund transfer to non-account holdersContify Banking-Thu 13 Feb, 2014 9:10 PM IST

    Mumbai: The Reserve Bank of India Wednesday informed that it is planning to set up a payment system to enable fund transfer from bank account holders to those without any bank account via mobile phones to improve financial inclusion in the country. RBI will set up an intermediary to process the payment, RBI governor Raghuram Rajan said. Code will be sent on the mobile phone of the recipient. "Cashing out is important for remittances because we have a large recipient population in the country, most of whom do not have access to formal banking services," Rajan said at the 22nd edition of the Nasscom India Leadership Forum 2014 at Mumbai.

  • RBI governor says lower minimum support prices will help curb inflationReuters-Thu 13 Feb, 2014 7:06 PM IST

    Reserve Bank of India Governor Raghuram Rajan said a moderation in the minimum support prices for agricultural products would help curb inflation in the country. "Inadequate" or "inappropriate" ...

  • RBI pressures banks to trade bond futuresReuters-Thu 13 Feb, 2014 2:02 PM IST

    Determined to turn its third attempt at launching bond futures into a success, the Reserve Bank of India (RBI) is pressuring state-owned banks to trade the derivatives that provide hedges against the country's volatile interest rates, banking sources told Reuters. Interest rate futures allow market participants to bet on the direction of bond yields. Developing such a market is a key part of RBI Governor Raghuram Rajan's push to deepen markets, by providing hedging tools commonly found in more developed economies. India has long struggled to introduce these types of derivatives because of what traders say has been poor design.

  • January CPI inflation slows to 24-month low of 8.79 pctReuters-Wed 12 Feb, 2014 9:28 PM IST

    The retail inflation slowed to a two-year low in January, providing some relief to the ruling Congress party ahead of national polls, but a third straight fall in industrial output in December offered little hope for an economic rebound. But core retail inflation remained sticky at around 8 percent, which new Reserve Bank of India (RBI) chief Raghuram Rajan has deemed uncomfortably high. Persistently high inflation prompted Rajan to raise interest rates last month, the third hike since September, even though economic growth has been stuck around a decade-low of 4.5 percent for four quarters. Last month, a central bank panel proposed revamping its policymaking structure by setting a long-term retail inflation target of 4 percent, plus or minus 2 percent.

  • ATMs soon to fork out cash without bank account tooIANS-Wed 12 Feb, 2014 4:02 PM IST

    Mumbai, Feb 12 (IANS) People without a bank account in India would soon be able to withdraw cash from an automated teller machine (ATM) with the use of mobile technology, Researve Bank of India Governor Raghuram Rajan announced here Wednesday. At present, only bank account holders can withdraw cash from an ATM. "We have recently approved the in-principle setting up of a payment system which will facilitate the funds transfer from bank account holders to those without accounts through ATMs," Rajan said while speaking at the NASSCOM India Leadership Forum on financial inclusion and technology. "Essentially, the sender can have the money withdrawn from his account through an ATM transaction.

  • Govt cuts growth forecast to less than 5 pct before pollsReuters-Fri 7 Feb, 2014 8:30 PM IST

    India on Friday cut its estimate of annual growth for the fiscal year to 4.9 percent from 5 percent because of a contraction in the manufacturing and mining sectors. Last week, the Statistics Ministry revised down economic growth for the previous fiscal year to 4.5 percent - the slowest pace during the decade Manmohan Singh has been prime minister - from an earlier estimate of 5 percent. Farm output is expected to grow 4.6 percent in the fiscal year to March 31, against 1.4 percent growth a year ago, while the manufacturing sector is seen contracting by 0.2 percent compared with 1.1 percent growth in 2012/13, the Statistics Ministry said in a statement. Last year, Finance Minister P. Chidambaram had projected gross domestic product (GDP) growth of 6.1-6.7 percent in 2013/14 in his annual budget, but lately lowered the estimates to about 5 percent.

  • Rupee at one-week high ahead of U.S. jobs reportReuters-Fri 7 Feb, 2014 5:35 PM IST

    That confidence will be tested later on Friday when the United States is due to post monthly employment data, a key indicator in setting expectations about whether the Federal Reserve will continue its pace of steady cuts in its bond purchases. "The robustness or otherwise of the employment report will broadly set the rupee's directional trend in the coming weeks," said Param Sarma, chief executive officer at NSP Forex.

  • Govt braces for likely lower growth forecast before pollsReuters-Fri 7 Feb, 2014 3:10 AM IST

    India on Friday is likely to cut its estimate of 5 percent growth forecast for the fiscal year that ends on March 31, thanks to a slower-than-expected recovery by industries. Last week, the Statistics Ministry revised down economic growth for the previous fiscal year to 4.5 percent - the slowest pace during the decade Manmohan Singh has been prime minister - from an earlier estimate of 5 percent.

  • Congress denied Bihar special category status: Nitish KumarIANS-Mon 3 Feb, 2014 6:06 PM IST

    Patna, Feb 3 (IANS) Bihar Chief Minister Nitish Kumar Monday said the Congress party prevented his state being accorded special category status following pressure from its alliance partners. "Congress stopped the special category status to Bihar at the last moment," Nitish Kumar told media persons here. He said the Congress was behind the game to delay and deny the state its demand for special category status to keep its allies happy in Bihar as part of the politics ahead of the Lok Sabha elections.

  • Rupee gains on late dollar selling by foreign banksReuters-Mon 3 Feb, 2014 6:03 PM IST

    The rupee gained on Monday, snapping two sessions of losses, spurred by late dollar selling by foreign banks, likely for mobile phone operators bidding for spectrum in an auction. Emerging markets remained under pressure due to fears of the Federal Reserve's wind down in monetary stimulus and concerns about an economic slowdown in China, where data on Saturday showed manufacturing growth easing to a six-month low. Overseas funds have sold a net $523 million in shares over the past six sessions, sending the BSE Sensex on Monday to a nearly 2-1/2 month low. Dealers said likely spectrum action-related flows by a large foreign bank helped a sharp spurt in the rupee in late trades.

  • After rocky January, markets eye data and central banksReuters-Mon 3 Feb, 2014 8:36 AM IST

    A raft of global business surveys, jobs data from the United States and central bank meetings in Europe should offer a clearer view on how well the global economy is faring at the start of 2014. Emerging markets were down 6.6 percent for the month - their worst January since 2009 - after another turbulent day on Friday, when the Russian rouble slid and bond yields rose sharply across the board. While the PMIs from Europe and the United States are expected to show more growth, particular attention will be paid to those from China. The other key data will be Friday's jobs report from the United States.

  • Wall Street comeback fades as emerging market fears lingerReuters-Sat 1 Feb, 2014 3:38 AM IST

    "Given the concerns over the emerging markets and currencies, I think most traders are tending to close down their books so that they don't come in on Monday morning with a negative surprise," said Quincy Krosby, market strategist for Prudential Financial in Newark, New Jersey.

  • Fed draws criticism from abroad as emerging markets still reelingReuters-Sat 1 Feb, 2014 2:56 AM IST

    MUMBAI/NEW YORK (Reuters) - The Federal Reserve's decision to keep trimming its economic stimulus drew fire on Friday as the Reserve Bank of India's chief said Americans should be more attuned to the global impact of their policies, and the IMF called for vigilance given strains in financial markets. The push-back came on Fed Chairman Ben Bernanke's last day on the job and two days after the U.S. central bank reduced the pace of its huge asset purchase program. The Fed made the move on Wednesday despite a bruising selloff in emerging markets that was prompted in part by the prospect of less U.S. monetary support. With the turmoil in currencies and stocks spreading into more emerging markets on Friday, Fed officials, addressing the rout for the first time, offered no hint the sell-off would influence their policy stance unless the U.S. economy were threatened.

  • U.S. should be mindful of global policy impact: RajanReuters-Fri 31 Jan, 2014 9:35 PM IST

    The United States should be more aware of how its policies affect the rest of the world, the Reserve Bank of India (RBI) chief said on Friday, a day after complaining that global monetary policy coordination had broken down. Raghuram Rajan, a former chief economist at the International Monetary Fund, took charge at the RBI last September during the country's worst financial crisis since 1991. India's financial markets have boomed as U.S. Federal Reserve efforts to bolster economic growth at home with cheap money encouraged investors to seek higher returns in emerging economies. As the Fed began to talk of unwinding its policy last year, the money began to flow back out.

  • IMF says emerging market turbulence raises concerns over liquidityReuters-Fri 31 Jan, 2014 9:23 PM IST

    The International Monetary Fund urged central banks on Friday to ensure that a financial market rout in the developing world does not lead to an international funding crunch. An IMF spokesman said some emerging market countries need to take "urgent action" to improve their economies, which are under threat by a recent sell-off in markets from India and Turkey to Brazil. "The turbulence also underscores the need for vigilance among central banks over liquidity conditions in international capital markets," the spokesman said. Many investors have blamed the selloff on the U.S. Federal Reserve, which recently started winding down a bond-buying stimulus program.

  • RBI chief blames US stimulus withdrawal for fluctuations in emerging marketANI-Fri 31 Jan, 2014 4:34 PM IST

    Washington, Jan 31(ANI): The Reserve Bank of India Governor Raghuram Rajan.has reportedly blamed western nations, particularly the U.S for triggering financial fluctuations in the emerging markets.

  • Rajan slams lack of global monetary cooperationReuters-Fri 31 Jan, 2014 10:45 AM IST

    RBI governor Raghuram Rajan slammed what he said was a breakdown in global monetary coordination, as the prospect of continued withdrawal in monetary stimulus by the U.S. Federal Reserve threatens emerging markets. Concerns that foreign investors will exit from developing economies as the Fed scales back bond purchases, along with fears of a slower Chinese economy, have roiled markets from Turkey to South Africa and Brazil since last week. Turkey and South Africa responded by raising interest rates this week to help support their currencies. The Reserve Bank of India also tightened monetary policy, although that action was aimed at pushing down high consumer inflation.

  • Annual limit on subsidised LPG raised to 12 cylindersReuters-Fri 31 Jan, 2014 5:06 AM IST

    The UPA government on Thursday increased the subsidy on cooking gas, acceding to popular demand as it approaches a national election due by May. The decision to increase the cap on annual sales of subsidised cooking gas cylinders to 12 from 9 per household was made days after Rahul Gandhi, vice president of the Congress, demanded a raise in the ceiling.

  • Consumer inflation to ease in next two months: Raghuram RajanReuters-Thu 30 Jan, 2014 9:43 PM IST

    India's consumer inflation should ease in the next two months, and will fall to 8 percent by the end of the year, Reserve Bank of India (RBI) Governor Raghuram Rajan said in an interview with TV news channel CNN-IBN on Thursday. The comments came after the RBI unexpectedly raised interest rates by a quarter percentage point on Tuesday, marking its third hike in five months. The consumer price index eased to a three-month low of 9.87 percent in December. A central bank panel last week had recommended bringing down the retail inflation gauge to below 8 percent by January 2015.

  • RBI Governor says must prevent extreme volatility in rupee - TVReuters-Thu 30 Jan, 2014 6:42 PM IST

    The Reserve Bank of India (RBI) will prevent extreme volatility in the rupee, its chief Raghuram Rajan told Bloomberg TV on Thursday. "What I am intent on is to prevent extreme volatility of the rupee, though I am not averse to adjustments," Rajan said in an interview to Bloomberg TV. The rupee weakened on Thursday amid a global rout after the U.S. Federal Reserve decided to further prune its asset purchase programme. He also added that the Reserve Bank of India needs to be prepared for any volatility in financial markets arising out of a possible fractured mandate in the general elections due by May.

  • Rupee gives up most gains on caution ahead of Fed policy outcomeReuters-Wed 29 Jan, 2014 5:24 PM IST

    The rupee gave up most gains on Wednesday as investors covered their short dollar positions ahead of the outcome of the U.S. Federal Reserve's two-day policy meeting, while weaker local shares also hurt. The Fed is expected to cut monthly debt purchases by another $10 billion, after cutting it by the same amount in December. Continued reduction in U.S. stimulus could curb the waves of cheap money that had benefited emerging markets such as India in recent years. Uncertainty about Fed tapering, and concerns about an economic slowdown in China, had sparked a rout in emerging markets, although risk assets rebounded after Turkey sharply raised interest rates.

  • RBI quietly begins tryst with inflation targetingReuters-Wed 29 Jan, 2014 4:52 PM IST

    Without explicitly saying so, the Reserve Bank of India (RBI) has effectively begun to target inflation based on consumer prices, a dramatic shift in approach for a central bank that has struggled to manage the balance between growth and inflation. The RBI unexpectedly raised policy interest rates by a quarter percentage point to 8.00 percent on Tuesday. In doing so, it cited a "glide path" towards lowering the consumer price index (CPI) below 8 percent by next January and 6 percent a year later -- targets that were laid out in sweeping proposals released last week to revamp the way monetary policy is conducted in India. The core recommendation of the central bank panel headed by Deputy RBI Governor Urjit Patel was ultimately to bring down CPI inflation to 4 percent, plus or minus 2 percent.

  • RBI raises repo rate by 25 bps to 8%, mkts caught off-guardContify Banking-Wed 29 Jan, 2014 4:11 PM IST

    New Delhi: India's banking regulator Reserve Bank of India on Tuesday made an unexpected move by raising the key repo rate -- short term lending rate -- by 25 basis points to 8% in its third quarter review of monetary policy 2013-14, which caught the market off-guard and showed RBI's renewed focus on inflation. The RBI, however, said that if retail inflation eases as projected then it does not foresee a further near-term tightening of the monetary policy. "In fact, if inflation eases at a pace that is faster than we (RBI) currently anticipate, and that reduction is expected to be sustained, the Reserve Bank will have room to become more accommodative," RBI Governor Raghuram G Rajan said in a statement. Notably, the 25 bps hike in the repo rate was driven by expectations of a high but moderating consumer price index (CPI) inflation, it said.

  • No longer in eye of storm, yet caution abounds on IndiaReuters-Wed 29 Jan, 2014 3:55 PM IST

    Half a year after India's worst economic crisis since 1991 reduced the rupee to record lows, a government in the last months of its life faces a new moment of truth as emerging markets again show signs of buckling. This time round countries such as Argentina, Brazil, South Africa and Turkey have been in the firing line. Investors are less downbeat over India, thanks to actions taken since its mauling by the markets last summer. "From an FX perspective, a lot of adjustments that had to happen have been made," said Joel Kim, head of Asia Pacific Fixed Income at BlackRock Inc in Singapore.

  • Rajan says rate hike not in light of global contagionReuters-Wed 29 Jan, 2014 12:03 PM IST

    The Reserve Bank of India has not raised interest rates to fight off the recent global emerging market sell-off, but to tamp down inflationary pressures, Governor Raghuram Rajan said on Wednesday. "I think for (some) time we have been saying very clearly we are focused on preserving the value of the rupee, in the domestic context," he told analysts on a conference call a day after the central bank unexpectedly raised its key rate by 25 basis points. "Preserving it in the domestic context will preserve it in the international context. Preserving in the domestic context means bringing inflation under control.

  • RBI raises repo rate, says further tightening unlikely soonReuters-Wed 29 Jan, 2014 9:05 AM IST

    The Reserve Bank of India (RBI), however, said that if retail inflation eases as projected, it does not foresee further near-term monetary policy tightening. The rupee sank 11 percent last year as emerging markets sold off sharply after the U.S. central bank announced it would taper its aggressive bond-buying programme that had fuelled global demand for risk assets. Expectations the Federal Reserve will further scale back stimulus this week have renewed pressure on emerging economies although the rupee has fared better than other currencies this time. Turkey's central bank was expected to raise rates to defend the lira at an emergency meeting later on Tuesday.