Current Account in India averaged -1.65 USD Billion from 1949 until 2014, reaching an all time high of 7.36 USD Billion in the first quarter of 2004 and a record low of -31.86 USD Billion in the fourth quarter of 2012. Current Account in India is reported by the Reserve Bank of India.
rbi is being saluted by repo rate cut; industry is happy so is fin minister and those who have fat wallets; no body is hearing the wales of poor ordinary retired persons and persons who painstakingly make savings in right spirit in the country's banks. does govt think every body in india is an enterpreneur and must take bank loan? where is the balance between two? not good of rbi.
It is the Depositors who face the heat whether is high or low inflation. If it is high inflation, the RBI is pressured not to raise beyond a point by Industrial Sheningans and the Government in the name of not killing growth thereby resulting in negative real rate of returns and when the vicious cycle turns for the worse and inflation declines due to the high base effect phenomenon as is natural in free market and capital economies where growth rates are topsy turvy,then too the Savers have to bear the heat in the form of low interest rates which doesn't keep pace with the rate of inflation. So, either way, they face the heat. Primarily, it is their investment which saved our Public and Private sector banks from the contagious effect of global liquidity crisis which engulfed the World but they are always given a raw deal and the Government sides with the borrowing class because it is the biggest reckless borrower and stand to gain a lot by low interest rates.
Re: Good decision by RBI!
by Vascado on Jan 16, 2015 03:39 PM
Well it is cheap money policy which precisely caused the global economic crisis in the first place in the form of Lehmann and Mortgage crisis and European liquidity crisis. It is crazy that the World is resorting to the same stimulus to kick start the economy what caused its fall in the first place. This would have frightful consequences in the future in the form of hyper inflation.
His mentor might have instructed him to save his position. Peculiarity with RBI chief is he always raises interest rates when the economy was weak.Lay men cannot understand his intelligence except suffering.Let us see when he i going to quit KJN Prasad
these measures are to make cat cats even fatter. deposit rates will fall causing hard ships to millions of honest non pensioners depending on deposit interest which was anyways always below double digit inflation and even now the retail prices for most consumables remain high
PSBs are starving due to lack of genuine borrowers & if they reduce the interest rates,surely they may axe the deposit rates too andthis will definitely jeopardise the domestic savings.
The fall in inflation is primarily due to the high base effect of spiralling and back breaking inflation over the last many years and the precipitious crude price fall in international market. It is a big question mark as to whether this optimism of fall in inflation is shared by the average consumer who still find that the price level of most the commodities rising at the retail level especially, vegetables, oil, pulses etc. The problem in India and even all over the Globe is that inflation data is not comprehensive and many question marks remain over its mode of computation. The irony is that retail inflation ticked upwards at 5% in December despite the high base effect and the RBI Governor betrayed his own statement of not willing to respond to piece meal data month-on-month. He probably was pressurised by the Industrial and Government lobbies to do what he did. This cut is only tokenism and a symbolic cut and might not prod Bank to cut their borrowing rates and rather it will only induce them to set right the asset-liability mismatch due to the distressed assets that are piling up in Banks in the form of NPAs. Alas, it is the savings class who are the worst hit. During times of high inflation statistically, they have to be contend with negative rate of returns and even if inflation relatively falls due to base effect, still their returns might not turn positive as the RBI will keep cutting rates whereby they are in a lose-lose scenario.
