Reserve Bank of India Sends a Mixed Message

December 16, 2010

The Reserve Bank of India left its policy interest rates unchanged but announced measures to release some primary liquidity in the money market system to alleviate some strains caused by rupee appreciation and sluggish bank deposit growth among other things.  In a new statement, monetary officials admonished that such steps as plans to buy government […] More

A Fifth Rate Hike in India

November 2, 2010

The Reserve Bank of India raised both its repo rate and reverse repo rates by 25 basis points to 6.25% and 5.25% and released a statement outlining the latest thinking of policymakers.  Four earlier increases were announced on March 9, April 20, July 2, and July 26 all of this year and, along with today’s […] More

Shifting Geographical Sources of Global Growth

October 7, 2010

The IMF’s October 2010 World Economic Outlook released in conjunction with this week’s IMF/World Bank meetings in Washington contains useful information for sorting world growth trends over the past two decades.  Growth rates in the table below are expressed in annualized terms, that is percent per annum.  Figures in the right-most column embody IMF growth […] More

Reserve Bank of India Implements Fifth Rate Hike Since March

September 16, 2010

As on July 27, India’s repo rate was raised 25 basis points, but the reverse repo rate was increased by 50 basis points.  Analysts had only predicted a 25-bp advance in each rate.  The new levels are 6.0% and 5.0%, respectively.  Reserve ratios were not changed.  Rates were also raised by 25 bps each on […] More

Monetary Policy Tightened Again in India

July 27, 2010

The Reserve Bank of India raised interest rates for the second time this month, lifting its key borrowing repo rate by an as-expected 25 basis points to 5.75% but ratcheting its reverse repo rate up by an unexpectedly large 50 basis points to 4.5% in hopes of enticing commercial banks to keep more funds at […] More

Reserve Bank of India Tightens Further

April 20, 2010

India, Asia’s third largest economy, has an intensifying inflation problem.  In response, the Reserve Bank of India (RBI) lifted its key lending and borrowing rates on March 19 by 25 basis points each to 5.0% and 3.5% and followed those moves with a second 25-bp increase today to 5.25% and 3.75%.  The reserve requirement was […] More

India’s Central Bank Rate Hike Not a Mere Policy Normalization

March 19, 2010

The Reserve Bank of India’s first rate increase since July 2008 was motivated by accelerating price increases for non-food manufactured goods, rising costs for fuel and other commodities, higher-than-expected overall inflation, and the risk that all this will boost expected inflation against the backdrop of a broadening domestic demand-led economic recovery.  Wholesale prices for nonfood […] More

Reserve Bank of India Boosts Reserve Requirements But Leaves Key Interest Rates Alone

January 29, 2010

India’s cash reserve requirement of 5.0% is being raised to 5.5% on February 13 and further to 5.75% on February 27.  The combined 75-bp increase surpassed analyst expectations and is meant to help manage the economic recovery, cut excess liquidity, anchor price expectations, and help align policy instruments with the evolving state of the economy […] More