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Archive for the tag “Reserve Bank of India”

The Battle Of Three Centuries

Twenty years ago next month, the British government gave the Bank of England the freedom to set interest rates. That decision was part of a trend that made central bankers the most powerful financial actors on the planet, not only setting rates but also buying trillions of dollars’ worth of assets, targeting exchange rates and managing the economic cycle. Although central banks have great independence now, the tide could turn again.

Read Here – The Economist

In Defence Mode

Mr. Rajan, the governor of the Reserve Bank of India, has been honored with awards this winter for his role in helping to bring momentum back to the country’s economy. His unexpected interest rate cut on Thursday helped strengthen emerging market stocks around the world.

At home, the view is less favorable, as Mr. Rajan finds himself caught in a political struggle.

Read Here – The New York Times

India’s Proverbial Frog In The Pot

Banking reforms alone, however, aren’t going to bring foreign investors back or prevent the rupee from falling further. This is (Raghuram)  Rajan’s real challenge: He is stepping into a stew of financial chaos, missed opportunities and political paralysis that has been simmering for years. It’s no longer inconceivable that India could become the first of the BRIC economies — BrazilRussia, India and China — to lose its investment-grade rating. And Rajan may not be able to do anything about it.

Read Here – Bloomberg

Th Elephant Needs To Dance Bold Steps

Not so long ago India was celebrated as an economic miracle. In 2008 Manmohan Singh, the prime minister, said growth of 8-9% was India’s new cruising speed. He even predicted the end of the “chronic poverty, ignorance and disease, which has been the fate of millions of our countrymen for centuries”. Today he admits the outlook is difficult.

Read Here – The Economist

India Joins Indonesia Facing Heightened Policy Dilemma

Central banks in Indonesia and India, with the worst-performing currencies among Asian emerging markets this year, will face more challenges in 2013 as they balance inflation risks with the need to boost growth.

The Reserve Bank of India must deal with “conflicting cues” from elevated prices and an economic slowdown, complicating policy decisions even after it recently signaled there is room to lower interest rates, Mizuho Corporate Bank Ltd. economist Vishnu Varathan said. Indonesia’s inflation may be at the upper end of the central bank’s targeted range, forcing it to raise borrowing costs “aggressively,” according to HSBC Holdings Plc.

Read Here – Businessweek

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