Economy, Markets and Macro Views

Views of Various Brokerages on New RBI Governor and Policy

September 23, 2013September 23, 20134 min read

The rBI Governor announced his first Monetary Policy on Friday. Here are the Reactions coming from various Chief Economists of Brokerage / Research Houses.

Ritika Mankar Mukherjee of Ambit Capital said,

RBI governor’s first monetary policy review, the RBI normalised the MSF-repo rate corridor (effectively by 100bps) and increased the repo rate by 25bps. In view of the RBI’s explicit focus on inflation, we reiterate our view that repo rate increases of another 25-50bps are likely to be administered over the rest of FY14. This is likely to be accompanied by the continued stabilisation of the MSF corridor from September to October 2013, as the next Fed meeting is scheduled for end-October 2013. There is a high probability that the next round of intervention is administered in mid-October 2013 i.e. ahead of RBI’s early-November policy review and ahead of the Fed’s end-October policy review

Citigroup Analyst Anurag Jha made the following observation, (more…)

Economy, Markets and Macro Views

Dr Raghuram Rajan takes Charge as RBI Governor – Thugs & Politicians Don’t Mess

September 5, 2013September 23, 20133 min read

Dr Raghuram Rajan, world famous Economist has come to the rescue of the Indian Government as he assumed charges as the RBI Governor. The message from the Governor is straight – Progressive Reforms for India.

Highlighting the critical need for transparency and predictability in conveying and guiding monetary policy, governor Rajan appeared to draw a distinction with the frenetically paced and sometimes contradictory and counter-productive measures taken by the (more…)

Economy, Markets and Macro Views

Congress Governments Policy Failure & Corruption Puts RBI in Tough Spot as Rupee Hits Life Time Low

July 8, 2013July 8, 20132 min read

The Stagflation [Stagnancy of Reforms since Scams Broke Out + Inflation] prevalent in India, accelerated by Populist measures such as Free Food Security Bill for Votes [Costing the Nation Rs 125,000 Crore every Year] has put additional pressure on the Indian Rupee as it hit an all time low of Rs 61.53 against USD since independence in 1947. Indian Central Bankers, RBI is busy as it is caught between the Devil and the Deep Blue Sea and here is an excerpt of their strategies to protect Indians from the vested politics of Central Government.

Limited FX intervention RBI will intervene only to provide liquidity to FOREX markets and not to influence its direction. The central bank thinks (more…)

Economy, Markets and Macro Views

Indian Economy – Slow Reforms, Reluctant to Recover

June 13, 20132 min read

The government of India has pushed through numerous reform measures over the past nine months. However, Policy implementation and announcements have tapered off recently and could slow even further. For example, have a look at the Failure of the FDI Policy in Indian Multi Brand Retail

HSBC cut India’s growth forecast for FY2014 to 5.5% (vs 6.0%) and FY2015 to 6.6% (vs 7.1%). They expect further progress on reforms, it will only materialize slowly. Moreover, the global recovery is likely to come later. The recovery (more…)

Economy, Markets and Macro Views

Reading Between Lines RBI Governor Speech in London

March 15, 2013April 18, 20202 min read

The Indian StockMarket Turned Buoyant as RBI Governor gave some hints of Rate Cuts and Satisfcation over the Budget. We commend RBI Governor’s Daredevil steps not to bow down to illiterate Politicians of India and taking a stand which is in the interest of the nation so far. Here are the key highlights of the Speech @ London School of Economics.

Inflation
If the domestic petroleum sector was a free market and if global prices passed through to domestic prices, demand would arguably have declined in response to rising prices. (more…)

Economy, Markets and Macro Views

High Inflation – Lower Savings from Households

February 15, 20132 min read

Central Government Statistics Data indicate a sharp deceleration in savings to 30.8% of GDP from 34% in FY11, while investments slowed to 35% of GDP in FY12 from 36.8% in FY11. Despite growth slowing to a decade low, the substantial fall in savings relative to investments is key for India’s widening current account deficit (CAD).

Who Provide Funds by Savings to the Indian Economy ?
Indian Households are the main contributor (~73% of total), followed by (more…)

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