An article of interest for you all.
Indian Central Bank Will Take Appropriate Action as Needed
March 3 (Bloomberg) -- Shyamala Gopinath, deputy governor of the Reserve Bank of India, said in Mumbai today that the central bank will take appropriate monetary policy action as needed, following a slump in the rupee to an all-time low.
"We are monitoring all market developments closely and we'll take appropriate action as and when necessary," Gopinath told reporters. The central bank is closely monitoring the movement of the rupee, she said.
The central bank has cut the overnight lending rate, or repurchase rate, four times since mid-October, to a record low of 5.5 percent, to help boost the slowing economy. It has also reduced the reverse-repurchase rate twice to 4 percent.
The nation's export growth fell the most in a decade, according to a government release yesterday. The statistics office said last month the economy may expand 7.1 percent in the year ending March 31, the slowest pace since 2003.
Indian commercial lenders need to cut interest rates to revive spending, Gopinath said.
"The financial system in India has been resilient in these trying times and the central bank doesn't expect systemic risk from loans extended by lenders for buying homes and other real- estate assets," she said.
The rupee slid as much as 0.5 percent to an all-time low of 52.185 a dollar before trading at 51.985 at the 5 p.m. close in Mumbai, according to data compiled by Bloomberg.
The central bank's exchange-rate policy remains unchanged, Gopinath said.
Overseas Orders
Declining overseas orders and shrinking local demand caused growth to slow for the third straight quarter, the government said Feb. 27. The $1.2 trillion economy grew 5.3 percent in the three months to Dec. 31, the weakest pace of expansion since the last quarter of 2003, after 7.6 percent growth in the previous quarter and 7.9 percent in the three months before that.
The government has cut taxes on consumer goods and services, announced higher borrowings from the market to subsidize fuels, food and fertilizers and raised spending on building infrastructure to protect domestic growth.
The government plans to borrow 3.06 trillion rupees ($59 billion) in the current fiscal year.
The central bank will ensure that the government's borrowing program is non-disruptive, Gopinath said.
"A constant process of consultation is needed between market participants and the central bank to ride the difficult period," she said.
To contact the reporters on this story: Anil Varma in Mumbai at avarma3@bloomberg.net To contact the reporter on this story: Kartik Goyal in New Delhi at goyal@bloomberg.net .
Find out more about Bloomberg for iPhone: http://bbiphone.bloomberg.com/iphone
Indian Central Bank Will Take Appropriate Action as Needed
March 3 (Bloomberg) -- Shyamala Gopinath, deputy governor of the Reserve Bank of India, said in Mumbai today that the central bank will take appropriate monetary policy action as needed, following a slump in the rupee to an all-time low.
"We are monitoring all market developments closely and we'll take appropriate action as and when necessary," Gopinath told reporters. The central bank is closely monitoring the movement of the rupee, she said.
The central bank has cut the overnight lending rate, or repurchase rate, four times since mid-October, to a record low of 5.5 percent, to help boost the slowing economy. It has also reduced the reverse-repurchase rate twice to 4 percent.
The nation's export growth fell the most in a decade, according to a government release yesterday. The statistics office said last month the economy may expand 7.1 percent in the year ending March 31, the slowest pace since 2003.
Indian commercial lenders need to cut interest rates to revive spending, Gopinath said.
"The financial system in India has been resilient in these trying times and the central bank doesn't expect systemic risk from loans extended by lenders for buying homes and other real- estate assets," she said.
The rupee slid as much as 0.5 percent to an all-time low of 52.185 a dollar before trading at 51.985 at the 5 p.m. close in Mumbai, according to data compiled by Bloomberg.
The central bank's exchange-rate policy remains unchanged, Gopinath said.
Overseas Orders
Declining overseas orders and shrinking local demand caused growth to slow for the third straight quarter, the government said Feb. 27. The $1.2 trillion economy grew 5.3 percent in the three months to Dec. 31, the weakest pace of expansion since the last quarter of 2003, after 7.6 percent growth in the previous quarter and 7.9 percent in the three months before that.
The government has cut taxes on consumer goods and services, announced higher borrowings from the market to subsidize fuels, food and fertilizers and raised spending on building infrastructure to protect domestic growth.
The government plans to borrow 3.06 trillion rupees ($59 billion) in the current fiscal year.
The central bank will ensure that the government's borrowing program is non-disruptive, Gopinath said.
"A constant process of consultation is needed between market participants and the central bank to ride the difficult period," she said.
To contact the reporters on this story: Anil Varma in Mumbai at avarma3@bloomberg.net To contact the reporter on this story: Kartik Goyal in New Delhi at goyal@bloomberg.net .
Find out more about Bloomberg for iPhone: http://bbiphone.bloomberg.com/iphone
Jagruti Fadia .
No comments:
Post a Comment