The improvement in global investor sentiments may ease the headache of managing risks on the external front for the Reserve Bank of India (RBI). The apparent stabilisation in advanced economies &ndash; visible over the past few weeks &ndash; appears to have improved global investor sentiment, resulting in a steady increase in capital inflows into emerging market economies (EMEs), including India.

Better sentiments may cut external risk

Business Standard

In the mid-quarter monetary policy review on Thursday, the Reserve Bank of India (RBI) raised the reverse-repo rate by 50 basis points (bps) to five per cent and repo rate by 25 bps to six per cent, effectively narrowing the Liquidity Adjustment Facility (LAF) corridor to 100 bps. The central bank justified the action, owing to a need to contain inflation pressures and normalising policy rates.

Comment: Gunit Chadha, CEO, Deutsche Bank (India)

The rupee fell, reversing earlier gains, after the latest inflation data fuelled concerns that the pace of price gains would erode returns on investments.

Rupee falls on high inflation

HDFC Bank on Tuesday became India's top lender in terms of market capitalisation, overtaking state-run State Bank of India (SBI).

HDFC Bank pips SBI in m-cap

Just a few years ago, Microfinance institutions were the lords of poverty, imperiously ruling over a new goldmine unearthed in corporate India, this one lying at the bottom of the pyramid. SKS Microfinance head Vikram Akula, posterboy of the industry claimed he wanted to be the &lsquo;google&rsquo; of microfinance, using his company&rsquo;s branding and reach to sell all kinds of goods through its pipeline to the poor.

Lords of poverty struggle to survive

According to the Bombay Stock Exchange, there were net fund outflows of Rs 409 crore on Tuesday, as the domestic equity markets fell by around 1.5 per cent.

Rupee nears all-time low

Government securities settled mixed on alternate bouts of buying and selling.

Bonds settle mixed

Press Trust of India

One of the biggest problems faced by banks and financial institutions is the failure of borrowers to repay loans. So, defaulters are offered incentives such as partial waiver of interest or a scheme for one-time settlement. Yet, surprisingly, banks often penalise a customer by levying charges for pre-payment of a loan account.

Banks can't penalise for prepayment of loan

High dollar demand from oil importers and fading hopes that intervention by the central bank would help arrest rupee depreciation pushed the Indian currency to end at the day's lowest levels. After appreciating to 50.60 levels in early trade, the rupee retraced its downward trajectory and lost 18 paise to close at 50.91 against the greenback on Thursday.

Rupee falls on strong demand from importers 

It is difficult to predict currency movements. Hence, it&rsquo;s best to encash.

Sell any dollars you hold

I know a bank account holder gets insurance of Rs 1 lakh for the money in the account.

Banking: Prashant Joshi

Since October, most banks have raised the base rate by 150 bps to 9.5 per cent.

Deposit rates may have peaked, but loans likely to cost more

The Reserve Bank of India (RBI) said the earthquake and tsunami in Japan, followed by the meltdown at a nuclear plant, may have implications for global oil prices.

Japan crisis may push up oil prices: RBI

A rise of 25 basis points each in the policy rates was expected, given the high level of headline inflation for February and the Reserve Bank of India&rsquo;s own estimates of inflation being around eight per cent by March-end. In the context of the evolving inflation scenario, RBI has decided to continue with its anti-inflationary stance in the interest of broader macroeconomic stability. A rise in policy rates is not likely to dent credit growth as the lean season would start from April.

Comment: M D Mallya

The rupee dropped for the second time this week as Japan&rsquo;s escalating nuclear crisis prompted investors to favour the relative safety of the dollar over regional assets.

Rupee falls as dollar gains ground

Hawkish RBI raises inflation forecast to 8%, increases key rates by 25 bps.

Rate hike season just got longer

The Reserve Bank of India&rsquo;s (RBI&rsquo;s) 25-basis points increase in rates has not come as a surprise. In our view, balancing growth and inflation has become very challenging, though the central bank does not explicitly say so. This is the first policy meeting wherein RBI has acknowledged downside risk to growth, owing to high commodity prices, particularly the risk of this impairing the investment climate.

Comment: Sonal Varma

While the funds raised will augment its capital and support expansion plans, analysts estimate the bank&rsquo;s margins to decline, capping upsides in the stock.

QIP issue improves Canara Bank's growth visibility

With interest rates likely to go up in the future, staying with liquid or liquid-plus funds will mean better returns and flexibility.

Stay short, or go for fixed maturity plans

Government securities recovered on renewed buying by banks and companies.

Bonds recover on renewed buying 

Government bonds closed mixed on alternate bouts of demand and supply.

Govt bonds fall slightly

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.

Page 480 - Finance News Analysis