Having taken a slew of steps to ease the liquidity deficit, Reserve Bank of India (RBI) Governor D Subbarao on Tuesday said there was a limit to what the central bank could do to infuse funds into the system.

Policy puts liquidity ball in banks' court

Business Standard

Reserve Bank of India Deputy Governor Subir Gokarn explains to Manojit Saha what prompted the central bank to go for a smaller rate increase and why it is concerned about the high incremental credit-deposit ratio.

Q&A: Subir Gokarn, RBI deputy governor

Banks prepared to wait and watch, as the policy is in sync with market expectations.

Interest rate increase not round the corner: Bankers

Amid concerns over rising global commodity prices, containing the widening current account deficit (CAD) and its financing were the major risks for the country&rsquo;s external sector, RBI said in its quarterly policy statement. The prices might gain further momentum in the event of a faster-than-expected global recovery, said RBI.

Faster global recovery may hit external sector

In line with expectations, the Reserve Bank of India (RBI) raised its key policy rates by 25 basis points (bps) on Tuesday. The repo (liquidity injection rate) now stands at 6.5 per cent, while the reverse repo (liquidity absorption rate) is at 5.5 per cent.

Comment: Rohini Malkani, Economist, Citi India

RBI&rsquo;s Macroeconomic Review published on January 24 clearly stated that a lower inflation regime was essential for sustainable high growth. By raising key policy rates by 25 basis points in its third quarterly review, it has understandably demonstrated the persistence of its anti-inflationary monetary stance. On Tuesday&rsquo;s increase has been the seventh since March.

Comment: M D Mallya, Bank of Baroda

In its latest monetary policy review, the Reserve Bank of India (RBI) has reiterated the focus of its policy on containing inflationary pressures. At the same time, it has acknowledged that its role in containing inflation is limited to preventing a generalised spread of inflationary pressures. The remedy for high inflation is no longer solely in the central bank&rsquo;s purview. A larger concerted effort needs to be made by fiscal authorities to ensure permanent solutions to structural supply-side bottleneck issues.

Comment: Ajay Srinivasan, Aditya Birla Group

This is what Tuesday&rsquo;s RBI&rsquo;s policy review said: Curbing inflation was the central bank&rsquo;s dominant policy concern. Despite better harvests, food inflation has been stubbornly high, as demand has consistently (in RBI&rsquo;s language &ldquo;structurally&rdquo;) outstripped supply.

Comment: Jahangir Aziz, India Chief Economist, JP Morgan


    Repo rate raised 25 basis points to 6.5 per cent
    Reserve repo rate increased 25 basis points to 5.5 per cent
    Cash reserve ratio left unchanged at six per cent
    Statutory liquidity ratio left unchanged at 24 per cent
    March-end inflation projection raised to seven per cent compared to the 5.5 per cent anticipated earlier
    Gross domestic product (GDP) growth projection for 2010-11 retained at 8.5 per cent, but with an upside bias
    Money supply growth retained at 17

Monetary policy 2010-11: In 2 minutes

Handling varied assignments is something public sector bankers typically manage with ease. For Deepak Chatterjee, the new managing director of SBI Mutual Fund, transferring to the domestic asset management unit from its international business appears virtually seamless.

BS People: Deepak Chatterjee

Many would have heard about Ketan Parekh and how he defrauded Gujarat&rsquo;s Madhavpura Mercantile Cooperative Bank to play the stock markets. But not many know about the man who worked to save the bank from collapse. Veteran chartered accountant M M Chitale not only played a key role in saving MMCB, but also refused to accept any fees for his services.

BS People: M M Chitale

The 11-year bonds gained for a second day on speculation yields near their highest level since 2007 will lure buyers. The Reserve Bank of India (RBI) raised the repurchase rate to 6.5 per cent from 6.25 per cent on January 25. Policy makers increased the repurchase rate six times last year, the most of any central bank in Asia.

Bonds up as 42-month-high yields attract investors

EMIs would rise if banks go for another rate hike.

Rate hike? Keep steady cash flows

The rupee suffered the worst fall in 16 years in November, plunging nearly seven per cent and hitting a record low, as persistent dollar demand from importers and portfolio outflows due to global risk aversion pounded the local unit.

Rupee fell record 7% in November

The rupee recorded an 18-month high intraday gain, as six central banks took concerted steps to increase dollar liquidity in the global financial system. on Thursday, the rupee gained 74 paise, or 1.4 per cent, to close at 51.46 against the dollar.

Rupee rises on improved risk appetite

For the fourth straight year, India has narrowly edged out China to emerge as the world&rsquo;s top recipient of officially recorded remittances. According to the latest issue of the World Bank&rsquo;s Migration and Development Brief released on Wednesday and containing estimates for 2011 remittances, India is expected to receive $58 billion this year, followed by $57 billion flowing to China, and $24 billion to Mexico.

India remains world's top recipient of remittances

The Reserve Bank of India will shortly issue Rs 10 denomination bank notes incorporating the new rupee symbol, with inset letter 'R', in the Mahatma Gandhi Series.

RBI to issue new Rs 10 notes

Press Trust of India

The rupee fell for the first time in three days on signs Europe&rsquo;s debt crisis was slowing economic activity in Asia and denting demand for emerging-market assets.

Rupee snaps two-day advance

Vikram Akula was the golden boy of microfinance when he launched his company SKS. How did things go so horribly wrong?.

Prince of poverty leaves behind questionable legacy

The rupee fell for the second day today losing 30 paise to close at 51.71/72 against the US dollar following sustained dollar demand from importers and late weakness in local stocks.

Rupee tumbles 30 paise against dollar

The rupee weakened the most in more than two weeks, as importers bought dollars to settle payments before a European summit this week, aimed at preventing the region&rsquo;s debt crisis from spreading.

Rupee drops ahead of Europe summit

Financial Analysis: Find the Latest Financial News Analysis & Research Updates from all top sources for the Indian Finance industry on Business Standard.

Finance News Analysis, Financial Analysis and Research | Business Standard

Find the Latest Financial News Analysis & Research Updates from all top sources for the Indian Finance industry on Business Standard.

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