Economy - News & Views

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Jan 26, 2012

RBI addresses liquidity concerns; keeps key policy rates and inflationary expectations firmly anchored...Responding to an acute and prolonged liquidity crunch, the RBI in its recent Review of Monetary Policy has reduced the CRR (Cash Reserve Ratio, the amount of cash that banks have to mandatorily park with it) by 50 basis points from 6 per cent to 5.50 per cent of deposits, infusing about Rs. 32,000 crore into the banking system to mitigate the effects of net liquidity drainage from the system. For the last 4-5 months, commercial banks put together were borrowing Rs. 1-1.5 lakh crores on a daily basis from RBI. Since mid-October 2011, pressures on liquidity were acute despite injection of liquidity worth Rs. 70,000 crore, exacerbated by the forex market operations conducted by the Reserve Bank in response to a sharp depreciation of the Indian currency...

Jan 17, 2012

Industrial production numbers do a 180 degree...India's industrial production growth rate was back in positive territory at 5.9 per cent yoy for November 2011 reversing the downtrend of the previous five months and rebounding from a 28-month low of -4.74 (revised from -5.09) per cent in the previous month. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for November 2011, registered yoy growth rates of - 4.4%, 6.6% and 14.6% respectively. The cumulative growth in the three sectors during this fiscal, April-November, 2011-12 over the corresponding period of 2010-11 was -2.5%, 4.1% and 9.5% respectively;over April-November 2011, IIP grew 3.8 per cent, as compared with 8.4 per cent growth seen in the same period in the previous year....

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News - Global Economy

RBI cuts CRR, key rates remain unchanged

In a bid to ease liquidity pressures in the banking system, RBI lowered the Cash Reserve Ratio, the amount of cash that banks have to mandatorily park with it, by 50 basis points from 6 per cent to 5.50 per cent of deposits. The move will inject Rs 32,000 cr into the banking system.

Food inflation remains in negative for fourth week at -1.03%

....onion prices fell steeply by 79.10 percent, year-on-year, for the week ended January 14, while potato prices were down 22.46 percent. However, pulses prices were 12.77 per cent higher, while milk grew dearer by 12.25 percent, while eggs, meat and fish prices were up 20.33 percent. Fuel and power inflation stood at 14.45 percent.

India's Apr-Dec Exports Up By 26%; Imports Rise By 30%

Investments plunge to 5 year low

RBI worried over rising bad loans in priority sector

RBI intervened heavily in currency market in
November

FDI up 56%; indirect tax kitty rises by 16.1%

In historic move Fed sets inflation target

The U.S. central bank, in its first ever longer-run goals and policy strategy statement, formalised an inflation rate target of 2 percent, which would be based on the broader personal consumption expenditure (PCE) index. However, the Fed would not make meeting its inflation target its top priority and put equal weight on price stability and maximum employment.

Britain's economy shrank by more than expected in the fourth quarter

GDP dipped 0.2 per cent, driven by weakness in the production and construction sectors as activity was hit by the eurozone crisis and austerity measures. Britain's unemployment rate stands at 8.4 per cent, the highest level for 17 years, following massive cuts to public sector jobs. Britain’s net debt hit a record £1 trillion in December.

Japan runs trade deficit of $32 billion in 2011

Japan announced its first annual trade deficit in more than 30 years as Japan's imports rose 12% and its exports fell 2.7%, compared to the previous year.

ILO Global Employment Trends 2012 report calls for urgency in jobs creation

….says an estimated 1.1 billion people, either unemployed or living in poverty.