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RBI on why rate hike is 'good' for India


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PO
And
by PO on May 04, 2011 02:29 PM

Because of Ambedkar's clueless constitution, useless Pranab is India's Finance Minister though voters have rejected The Italian Congress in West Bengal


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Nirav Joshi
Stupid Congress & RBI
by Nirav Joshi on May 04, 2011 02:14 PM  | Hide replies

Congress is getting it wrong. Infaltion is because of food products. Remove sharad pawar and improve distribution channel. Prices will come down.Rising rates is not a solution. There were only 2 sectors which were booming since last 6 months, auto and bank. Thanks to congress and RBI they halted thier growth. Stupid people.

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Lal Popat
Re: Stupid Congress & RBI
by Lal Popat on May 04, 2011 10:09 PM
very true as far as food prices are concerned. Remove the likes of sharad pawar and improve distribution channel. i was told the same by a private cab driver in Mumbai who also has family farms in Satara. as per him, when onion was Rs.40/kg - in market place, the farmers were only getting Rs.5/kg.

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kiran ddasdsadsa
My portofolio is down 10% becoz of SUBBBBA
by kiran ddasdsadsa on May 04, 2011 01:47 PM

My portofolio is down 10% becoz of Mr. SUBBBBA..rates hiked and market crashed..SUBBBA sksss

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Hashmet Hussain
How it benefit a common man
by Hashmet Hussain on May 04, 2011 01:27 PM  | Hide replies

Dear Commenter,I am a common man and don't understand all about all this Inflation and all those related words..Just anybody please tell if i deposit Rs 1 Lakh in the bank ..How much Intrest i will get for a month?

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Shaunak
Re: How it benefit a common man
by Shaunak on May 04, 2011 01:32 PM
You will get a nominal interest of 9% or so, but inflation will reduce the purchasing power of your money by an equal amount. The real interest that you get will be either zero or negative. That's the price we pay for using government controlled fiat currency. To get genuine returns you must speculate in commodities, stocks or real estate. Unfortunate but true.

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Hashmet Hussain
Re: Re: How it benefit a common man
by Hashmet Hussain on May 04, 2011 01:39 PM
Dear Mr Shaunak,Thank you so much for your comments,as mentioned earlier,i don't have in depth knowledge of Commodities,Stock etc..You mean if i deposit Rs 1lakh i will get Rs 9000/- as interest..is that i am Right or Wrong

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Shaunak
Re: Re: Re: How it benefit a common man
by Shaunak on May 04, 2011 02:12 PM
Yes, you get about 9000 per year. My point is that in a year's time, the value of your capital is down by 10% in terms of purchasing power due to inflation. So actually you get negative 1% return.

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dinesh pandian
Re: Re: Re: Re: How it benefit a common man
by dinesh pandian on May 04, 2011 02:20 PM
Mr Hashmet,

mark the price of gold today, check after one year. can you buy the sam e amount of Gold witht the amount of you have now?
this is inflation or my understanding abt purchasing power of rupee

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pradeep agarwal
How would a bureaucrat know pains of middle class?
by pradeep agarwal on May 04, 2011 12:47 PM

This guy has no vision & long term plan for economy.He has brought the growth to a halt with his interest hike regime & has put housing dream well beyond the realms of even above middle class.The puppet occupying 7'Race Course is mostly enjoying siesta post his by pass & all his cronies are bypassing him by meeting real power in 10'Janpath.We are in for difficult time as this government has amassed so much wealth that it will be difficult to displace them from power unless people get vigilant.

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Shaunak
Real Story
by Shaunak on May 04, 2011 12:46 PM

Inflation is defined as 'Increase in the Money Supply'. Period. Raising benchmark rates recklessly is not the solution. RBI must stop printing money and buying government bonds, in other words, monetizing government debt. Since 1971, the rupee has lost 99.5% of its purchasing power when measured in gold, which is real money. Our fiat currency is abused by the politicians and RBI is their partner in crime. The constant money-printing and monetization of government debt destroys the value of our savings and helps borrowers.
Also, interest rate is not an arbitrary number, it is an important parameter that coordinates production over time. When there is a glut of saving, the interest rates should fall and encourage interest rate-sensitive industries (like capital goods) to expand and invest. When there investments become productive, the society has the means to consume that produce because they have real savings (which is deferred consumption). However, if the desire of the society is to consume now, the interest rates should rise and discourage long term investments, as such investments would be unsustainable. This is an inherent market mechanism to eliminate misallocation of assets and resources so that they are most productively used. This is possible only if we allow interest rate to be determined by the market forces and not determined arbitrarily by any body, since no matter how smart these people are, they cannot decide what's good for a billion people.

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Data Server
Sham Subbarao
by Data Server on May 04, 2011 12:34 PM

Subbarao is a moron. He can not curb inflation by just increasing the interest rates. He is doing the same thing from last 2 years and you all know the inflation figure now. He is only making life of middle class as hell. Instead of only playing with the interest rates, govt. should ban exports of all the commodities and shut down of these commodity exchanges like MCX. But this impotent govt cannot to it because these exchanges are running by another moron Sharad Pawar.

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viswanath n
This Decision is Fully Biased Towards The Govt Comfort
by viswanath n on May 04, 2011 12:21 PM

Of the 62 Rs/litre petrol, its costs govt only 21 Rs, rest is all tax. Same case with Diesel. Ofcourse international crude prices are rising up. Now in advance of raising prices, the Fin.Min has given indication to the Governer who now a days is more proactive. He is not just weighing the inflation data, but also the events surrounding the govt actions. He has really gone mad, should be removed immediately. Let him check with Bernarke how to keep interest rates. He is not bothered about the employment that will get shaken by his irrate action. He is more conservative because he is a stupid old idiot.

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viswanath n
Adding Fuel To Fuel Price Hike In Advance
by viswanath n on May 04, 2011 12:07 PM

So the RBI Governer is now a days not just acting on the inflation data but to adjust for the proposed fuel price hike in advance. The Fin. Min idiot has informed that the Govt is proposing the Fuel price hike. So this idiot felt that not just 0.25 but 0.5 is necessary. What these idiots are failing to understand is the employment market is getting shaken, with more NPAs with the banks. These stupids should be removed and replaced with more dynamic young people who have more sense and respond more swiftly.

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I
how it will support?
by I on May 04, 2011 12:04 PM  | Hide replies

To RBI Governor
Interest rate hike 0.50% how it support for growth, if your increase rate all price will go up and also loan based marketing auto,car,contruction,homeloan etc.. effected and also if you are reduce privat bank not reduce and no of control private bank,fuel,food, backmoney Please tell me how it support for growth.

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kiamia
Re: how it will support?
by kiamia on May 04, 2011 11:01 PM
By increasing rate the lending of bank will comedown and hence money flow will come down which will eventually reduce the price of everything.
This is the theoretical reason but practically God knows....

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