Tag Archives: RBI

Financial Stability Report (FSR) 2013

The Financial Stability Report (FSR) for Dec 2013 is being released once again in uncertain times. The US Federal Reserve (Fed) having announced tapering of its QE-3 has finally laid to rest uncertainties on the timing of the initiation of exit, but the pace of exit and the market reaction and adjustment to the withdrawal of liquidity will have to be watched carefully. The commencement of taper should signal a calibrated return to normal liquidity and credit conditions in the global markets and also better pricing of risk. This will mean a repricing of certain assets with consequent volatility. In India, a potential additional source of uncertainty is the coming general election. A stable new government would be positive for the economy. With confidence in the financial system still fragile, six years into the crisis, policy certainty is something investors look for in the current environment.

Download report at http://rbi.org.in/scripts/PublicationReportDetails.aspx?UrlPage=&ID=725

CARE Research : Analysis of RBI Credit policy, September 2013

In a surprise move, the RBI increased the repo rate by 25 bps and also eased the liquidity tightening measures invoked earlier in July. While the immediate impact will be straightening of the yield curve, it also signals that inflation targeting will remain a major objective of RBI.

While policy will be shaped by the inflation number as well as the Fed actions, we are still hopeful of a cut in interest rates of 25 bps in Q4 if inflation is under control (good harvest expected this time) and clarity obtained on Fed’s tapering programme.

Click below for the detailed analysis on the RBI Credit Policy.

Mid quarter Monetary Policy Review – September 2013