“The job of the Central Bank is to worry.” ~ Alice Rivlin.
Almost a year back the Thai central bank did a vault and our own RBI closely followed with a somersault to create hiccup in the capital markets and thus have established their presence. Though, this time around the RBI Governor has not gone for such a notoriety, has wisely put his words for the reasons for the action/inaction.
The acronym of GOPI, is a translation of Telugu phrase “GOda meeda PIlli” which means ‘cat on the wall’. The latest move by RBI in maintaining the status quo on the rates is reminiscent of the above expression.
It was clearly mentioned by Mr. Reddy that there are not much of inherent problems within the domestic markets but the global outlook doesn’t seem to be positive. While the measures are taken keeping in view of controlling the inflation at around 4.5% and maintaining the GDP growth rate at 8.5% for the year ahead till Jan ’09, he commented that the US and its policies are indicating a recession or efforts to avert such a situation. So, with this perspective in view, it’s too early for India to move either ways in determining the rates and also wanted to wait ‘n watch before jumping forward.
This disappointed many analysts who’ve anticipated a slight reduction in the interest rates. With the central government going for polls next year, the mood is currently to rule in the inflation as a higher growth rate might not win elections but surely a higher inflation can undo the power. Though, most predict a change by the coming quarter, it would be too early to take a guess any sooner. So, a there might be a long wait for all those awaiting for cheaper home loans.
The other problem at hand would be to control the excessive inflows as the US Fed reduced the interest rates and further more are likely to seen. With talk of impending recession in the US, depreciating dollar and appreciating oil prices; we are certainly in troubled times.
“Central banks don't have divine wisdom. They try to do the best analysis they can and must be prepared to stand or fall by the quality of that analysis.” ~ Mary Kay Ash.
Almost a year back the Thai central bank did a vault and our own RBI closely followed with a somersault to create hiccup in the capital markets and thus have established their presence. Though, this time around the RBI Governor has not gone for such a notoriety, has wisely put his words for the reasons for the action/inaction.
The acronym of GOPI, is a translation of Telugu phrase “GOda meeda PIlli” which means ‘cat on the wall’. The latest move by RBI in maintaining the status quo on the rates is reminiscent of the above expression.
It was clearly mentioned by Mr. Reddy that there are not much of inherent problems within the domestic markets but the global outlook doesn’t seem to be positive. While the measures are taken keeping in view of controlling the inflation at around 4.5% and maintaining the GDP growth rate at 8.5% for the year ahead till Jan ’09, he commented that the US and its policies are indicating a recession or efforts to avert such a situation. So, with this perspective in view, it’s too early for India to move either ways in determining the rates and also wanted to wait ‘n watch before jumping forward.
This disappointed many analysts who’ve anticipated a slight reduction in the interest rates. With the central government going for polls next year, the mood is currently to rule in the inflation as a higher growth rate might not win elections but surely a higher inflation can undo the power. Though, most predict a change by the coming quarter, it would be too early to take a guess any sooner. So, a there might be a long wait for all those awaiting for cheaper home loans.
The other problem at hand would be to control the excessive inflows as the US Fed reduced the interest rates and further more are likely to seen. With talk of impending recession in the US, depreciating dollar and appreciating oil prices; we are certainly in troubled times.
“Central banks don't have divine wisdom. They try to do the best analysis they can and must be prepared to stand or fall by the quality of that analysis.” ~ Mary Kay Ash.
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