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Market participants have welcomed the move by the Reserve Bank of India to release the current account deficit numbers one month ahead of schedule and hoped that this would be the beginning of a new trend in the Raghuram Rajan regime.
Historically, the central bank releases the external sector data of a particular quarter on the last working day of the next quarter.
But in the last quarter, under Rajan’s predecessor D Subbarao’s regime, CAD figures were released just a day earlier (instead of post market closing hours of Friday, it was released before markets opened on Thursday).
That was seen as a measure to boost sentiments in the foreign exchange market on the back of rupee volatility, as the numbers were better than what the market was expecting.
“If Rajan could release the numbers one month ahead of schedule, it means the data are available. But It’s strange no one in the RBI ever thought of releasing it early despite the impact of the numbers on general policy-making,” a senior banker said.
Market participants now expect the central bank to continue the trend of releasing data as soon as they are available. The RBI releases a host of data including, foreign exchange reserves, quantum of intervention in foreign exchange market, banks’ credit-deposit growth data, statistics related to banks efficiency, asset quality, etc.
On the day of assuming charge as the 23rd governor of RBI, on 4 September, Raghuram Rajan underscored the need of effective communication.
“To the existing traditions of the 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 market are volatile, and there is some domestic political uncertainty because of impending elections, RBI should be a beacon of stability as to its objectives,” he had said.
