Market hopes for early data release

Market participants have welcomed the Reserve Bank of India (RBI)'s move to release data on India's current account deficit (CAD) a month ahead of schedule. They hope this would be the beginning of a new trend under RBI Governor Raghuram Rajan.

Historically, the central bank has released external sector data for a particular quarter on the last working day of the following quarter. But for the last quarter, under Rajan's predecessor D Subbarao, CAD data were released a day earlier (instead of post-market closing hours on Friday, these were released before the markets opened on Thursday). The move was viewed as a step to boost the sentiment in the foreign exchange market amid the rupee's volatility, especially as the data were better than market expectations.

"If Rajan could release the numbers a month ahead of schedule, it means the data are available. But it's strange no one in RBI ever thought of releasing it early, despite the impact of the numbers on general policymaking," said a senior banker.

Market participants now expect the central bank to continue the trend of releasing data as soon as these are available. RBI releases a host of data, including those on foreign exchange reserves, intervention in the foreign exchange market, banks' credit-deposit growth, banks' efficiency and asset quality.

On September 4, the day Rajan assumed charge as the 23rd RBI governor, he had underscored the need for effective communication. "To the existing traditions of RBI, which will be the bedrock of our work, we will emphasise two other traditions that become important in these times---transparency and predictability. At a time when financial markets are volatile and there is some domestic political uncertainty because of impending elections, RBI should be a beacon of stability with regard to its objectives," he had said.