Terrorists Armed With Rifles Stormed Mumbai - Nov 28, 2008

The global rating agency Standard & Poor's (S&P) today said the terror attacks in Mumbai were an isolated case and that it does not expect any negative implications on India's macro economic activities or the government's fiscal position from the attacks.S&P expects a short-term negative impact on the currency, and stock markets as well as a slowdown, in tourist arrivals but that such effects would recede with time if there were no further attacks.

Terrorists armed with grenades and rifles stormed into Mumbai city, India's financial capital, late on Wednesday, 26 November 2008. The battle between the police and terrorists was still going on at Nariman House and at Oberoi Trident in Nariman Point more than 36 hours after the attacks.

Fruits And Sea Fish Declined During The Eases Further - Nov 28, 2008

The inflation slipped for the third successive week to over a five-month low of 8.84% for the week ended Nov 15 as against 8.90% of previous week, raising the hopes for further cut in key rates by the central bank. The inflation declined by 0.06 per cent from the previous week on account of drop in prices of metals, fruits and some manufactured items such as imported edible oil and rubber.The inflation was 3.35 per cent during the corresponding period a year ago.

The index of ''fuel, power, light and lubricants'' remained unchanged during the week, while the prices of fruits and sea fish declined during the week. Among the food items, prices of moong, rice and vegetables firmed up during the week. The prices of items in the textile group and some chemicals items, too, became expensive. RBI has injected Rs 2,75,000 crore since October through various policy instruments such as cut in mandatory deposits that banks keep with the central bank and reduction of funds that banks park in government securities.

In addition, it has also reduced the short-term (repo) lending rates indicating soft interest rate regime. The industry as well as the banks are demanding further cut in key rates to fuel growth and declining inflation may prompt the RBI to further ease monetary policy to arrest economic slowdown.

Lender Hdfc Bank May Cut Rates Up To 50 Bps - Nov 28, 2008

The Reserve Bank is expected to cut policy rates up to 50 basis points shortly as inflation has been on way downward for past three consecutive weeks, bankers said. Due to the reduction in global commodity prices and crude oil, there is scope for reduction in benchmark interest rates, according to Director M V Nair, the Union Bank of India Chairman and Managing.Private sector lender HDFC Bank''s Treasury Head Sudhir Joshi said RBI has scope to slash rates.

The apex bank could cut short-term lending (repo) rate in between 25-50 basis points. Drop in inflation for the third straight week is giving rise to the expectation of rate cut by the RBI. The rate of price rise is at six-month low of 8.84 per cent for the week ended November 15 against 8.9 per cent in the previous week.

RBI has already shifted its focus from price management to growth as commodity and fuel prices have come down substantially in the last one-month. The decline in inflation may prompt RBI to cut policy rates or reserve ratios as demanded by bankers to enable them to cut interest rates to give a fillip to growth rates. Earlier, ICICI Bank CEO and MD K V Kamath had demanded that the RBI should ease money supply further to enable cut in interest rates by 200-300 basis points.

Dalal Street Is Expected To Heading For Opening - Nov 28, 2008

Dalal Street is expected to have gap down opening on 28th Nov, even as it may rebound later in the day due to the terror attacks that shook the country''s financial capital, analysts say. The market will most probably open in negative terrain but national fervour could help it in closing better, said Arun Kejriwal, director, Kejriwal Research and Investment Services.

Global research firm Moody''s Economy.com said, although the terrorist attacks are expected to affect market sentiment, local investors in Mumbai are well acquainted with terrorism and unlikely to engage in panic selling.

In addition to this, in the July 2006 Mumbai train bombings, which killed more than 150 people, the benchmark Sensex had continued to rise in the days following the blasts, Moody''s report stated. But with the economic climate very different from 2006 and the current attacks aimed explicitly at foreigners, there is a chance that markets may react sharply when they open next, it added. Ashika Stock Brokers research head Paras Bothra said that with the markets remaining closed today the investors have already discounted the impact of the attacks.Terror attacks, which have rocked Mumbai since last night, included incidents of shooting at the Taj Hotel and Oberoi Hotel and have claimed at least 100 lives.

Under The Liquidity Adjustment Facility Auctions - Nov 27, 2008

Call rates ended down at 6-6.10 per cent, against the previous close of 6.6-6.7 per cent. Under the Liquidity Adjustment Facility, in the first one-day auctions, RBI received and accepted one repo bid for Rs 1,600 crore and eight reverse repo bids for Rs 5,505 crore. RBI received and accepted two repo bids for Rs 1,500 crore and nine reverse repo bids for Rs 6,475 crore under the second one-day auctions. In the 14-day special repo auction scheme for mutual funds and NBF Cs, there was one bid for Rs 600 crore. In the CBLO market, there were 467 trades amounting to Rs 33,665.9 crore in the rate range of 5.5-6.25 per cent.

FICCI For Rolling Back Monetary Policy - Nov 27, 2008

Industry body FICCI on November 26 said the monetary policy should be rolled back to 2004 levels to ease the credit flow to the system. Rajeev Chandrasekhar, president of FICCI told reporters that so far inflation was concerned, the monetary policy did not work.He said inflation had come down to due to fall in commodity prices. The FICCI President said to spur growth, the government should adopt a ''big bang'' approach instead of a gradual and calibrated one.

About the national executive meeting held here, Chandrasekhar said the members were of the view that the government view about the current economic scenario was not in sync with reality. He said there were crisis of confidence among the members and an increasing sense of worry. He also criticised the government for not arriving at a solution to the crisis in the country, and suggested that the government should immediately start infrastructure projects to spur growth. Chandrasekhar said the next fiscal year was crucial in determining the future of the coming years.

India To Recover Faster Than China From Global - Nov 27, 2008

India will recover faster than China from the impact of current global financial crisis as China’s heavy dependence on exports, a latest report by the Organisation for Economic Cooperation and Development (OECD) said.As per the OECD projections, Indian economy will start recovering from the crisis in 2009 itself, while China will have to wait for one more year. The growth projections of the OECD reveal that economic growth rate in India.

Will improve from 7.0 per cent in 2008 to 7.3 per cent the next year and went up further to 8.3 per cent in 2010. India recorded a growth rate of 9 per cent in 2007-08. However, in case of China the economic growth rate would fall from 11.9 in 2007 to 9.5 in 2008. The downward trend would continue throughout the next year with growth rate sliding further by 1.5 percentage points to 8 per cent in 2009.Chinese economy, as per the data, will recover only in 2010 with a growth rate of 9.2 per centExport growth is weakening and, with slower capital formation, domestic demand is lso projected to ease, the OECD forecast on China said.

Govt Readies Rs 4000 Cr Bailout For Exporters - Nov 27, 2008

The commerce ministry has finally submitted its export sector bailout package after more than two months of protests and brainstorming, to the committee headed by the Prime Minister Manmohan Singh. It is believed that the package that was submitted to the PM''s apex committee on Thursday is worth Rs 4,000 crore and is loaded with fiscal incentives to ease out the export sector that is already neck-deep into loans.The bailout package includes refunding of central sales tax and terminal excise duty of about Rs 1000 crore.

The relief package also includes interest subsidies of Rs 600 crore which is basically bringing back the 4 per cent subvention that was withdrawn on September 30. The government is also looking to provide export credit guarantee in case of defaults of Rs 350 crore and a textile upgradation fund of Rs 800 crore. The project is specifically meant for the textile sector that may see five lakh job losses within five months on account of the ongoing economic crisis. The export relief package also includes recommendations to increase the market development assistance and market access initiatives for venturing into new markets to a total of Rs 400 crore. Exporters, who are suffering from the effects of the present world economic crisis, can now hope some cheer in the New Year.

India May Grow At 7% This Fiscal: Montek - Nov 26, 2008

The Planning Commission said the GDP growth rate would be a shade lower at seven per cent against nine per cent in 2007-08, even though RBI estimated India''s economy to grow at 7.5-8 per cent in the current fiscal.

However, he expected that inflation, which came down to 8.9 per cent, would decline further giving RBI a scope to go for softening interest rates to spur growth. RBI has injected around Rs 2,75,000 crore into the system through cuts in reserve ratios and policy rate, Repo, but there is demand for more money supply by the corporates.

Bond Prices Slip By 13 Paise - Nov 26, 2008

Booking profits by market participants in a range bound market led decline in bond prices by 13 paise on Nov 25. The markets rallied in the first half of trade as rate cut expectations continued. However, profit booking by market players pulled down the prices of the benchmark security. Total traded volumes on the order matching system were substantially lower at Rs 6,400 crore (Rs 15,213 cro re). The 8.24 per cent-10 year-2018 paper opened at Rs 106.75 (7.23 per cent YTM) and touched an intra-day high of Rs 107.34 (7.15 per cent YTM).

It ended at Rs 106.87 (7.21 per cent YTM), as against the previous close of Rs 107.0 (7.20 per cent Y TM). The 7.95 per cent-24 year-2032 paper opened at Rs 101.9 (7.77 per cent YTM) and closed at Rs 101.7 (7.79 per cent YTM).

Call Rates Close Marginally Lower - Nov 26, 2008

The inter-bank call rate ended slightly lower at 6.60-6.70 per cent, as against the previous close of 6.90-7 per cent. There was 1 bid for Rs 1,600 crore in the one-day repo auction under the first liquidity adjustment facility (LAF). In the reverse repo auction, the RBI received and accepted 3 bids for Rs 805 crore. The RBI received and accepted 4 bids for Rs 2,175 crore in the one-day repo auction under the second LAF.

In the one-day reverse repo auction under the sec ond LAF, the RBI received and accepted 8 bids for Rs 3,690 crore. In the 14-day special repo auction scheme for mutual funds and NBFCs under the LAF, there were no bids. In the CBLO market, there were 495 trades amounting to Rs 34,747.35 crore in the rate range of 5.75-7 per cent.

Rupee Slips Below 50-Mark, Ends At 49.93 - Nov 26, 2008

The Indian rupee on Nov 25 dipped below 50-mark against the greenback by turning dearer by 14 paise as the weaker position of Dollar against some other currencies helped Rupee to gain. It, closed off a high of 49.70, but still ended stronger by 0.3% at 49.93/95 per dollar, against Monday''s closing at 50.09/10. It had hit a record low of 50.60 last week.

The domestic unit gained about 30 paise at 49.70 a dollar in early trade in line with the surge in equity markets and anticipation of portfolio investments. The opening quote for the rupee was 49.80 a dollar, a dealer with public sector bank said.

At the Interbank Foreign Exchange (forex) market, the rupee moved in a range between 49.70 and 50.12 during the day. It had closed at 50.09/10 a dollar yesterday. The rupee has been under pressure ever since foreign institutional investors began pulling out funds from equity markets since the beginning of 2008 after emergence of US mortgage problems. They had pumped in a record $17 billion during last calendar year.

Meet The Liquidity Requirements Of Non Banking - Nov 25, 2008

The Reserve Bank of India (RBI) with a view to enabling banks to meet the liquidity requirements of Mutual Funds (MFs) and Non-Banking Financial Companies (NBFCs) either on incremental or on rollover basis, shall conduct a special fixed rate term repo at 7.5% per annum against eligible securities for Rs.55,255 crore on 25 November 2008, due for reversal on 10 December 2008.

The RBI had announced on 14 October 2008 that it would conduct the special fixed rate term repo under Liquidity Adjustment Facility daily till end-March 2009 up to a cumulative amount of Rs.60,000 crore on outstanding basis and that additional liquidity support to the extent of up to 1.5% of their NDTL, can be availed by banks exclusively for the purpose of meeting requirements of MFs and NBFCs.Of the outstanding amount of Rs.4,945 crore as on 24 November 2008, Rs.200 crore is due for redemption today.

Rupee Opened At 50.03 And Touch An Depreciates - Nov 25, 2008

The rupee fell a tad against the dollar on Nov 24, losing 6 paise against the greenback. It moved in the narrow range of 25 paise. The rupee opened at 50.03 and weakened to touch an intra-day low of 50.22. It then recovered to fall below 50 at 49.97 before closing at 50.09/10, as against the previous close of 50.04/05. In the global markets, the dollar weakened against the euro and the pound. In the forward market, the 6-month premium closed slightly higher at 2.82 per cent (2.61) and the 12-month ended at 1.96 per cent (1.79).

India Is Nowhere Near A Recession In New Delhi - Nov 25, 2008

At an annual event in New Delhi Finance Minister P Chidambaram said that India is nowhere near a recession. The event brought together economic editors and other members of the media from across the country for a dialogue with the government,He also spoke about liquidity, inflation and his expectations on GDP growth, as he has done earlier on several other occasions. The Finance Minister on 24th Nov, tried to explain the journalist community about his plans to try and keep recession far from India''s shores. Chidambaram said, I hope the worst is over.

For over two hours, the he patiently conveyed his ministry''s plans to a number of financial journalists. India is nowhere near recession. The growth estimate for the first quarter of 2008-09 is 7.9 per cent and the second quarter undoubtedly will show high positive growth, he said.The Finance Minister reiterated that increased liquidity should mean increased flow of credit and that he would personally meet the chiefs of banks from across the country after their meet with the RBI governor.

Chidambaram said, If inflation continues to decline, policy rates may also moderate with a bias towards growth. However, for the first time, Chidambaram admitted that fiscal deficit will take another year to drop to three per cent of the total GDP, but he ruled out an immediate infrastructure fund. Instead, he stressed on speedy completion of existing projects.

Call Rate Closed A Little Lower At 6.90-7 Per Cent - Nov 25, 2008

The inter-bank call rate closed a little lower at 6.90-7 per cent, as against the previous close of 7-7.10 per cent. In the one-day repo auction under the first liquidity adjustment facility (LAF). There was 1 bid for Rs 2,400 crore in the reverse repo auction, the RBI received and accepted 1 bid for Rs 80 crore. In the one-day repo auction under the second LAF, the RBI received and accepted 4 bids for Rs 2,825 crore. In the one-day reverse repo auction under the second L AF, the RBI received and accepted 8 bids for Rs 6,635 crore.

In the 14-day special repo auction scheme for mutual funds and NBFCs under the LAF, there were no bids. In the CBLO market, there were 491 trades amounting to Rs 34,299.80 crore in the rate range of 5.50-6.40 per cent.

Provide Some Relief To The Domestic Steel - Nov 24, 2008

The government on Tuesday, 18 November 2008, announced imposition of 5% import duty on specified iron and steel items to protect the domestic steel industry from cheaper imports, especially from China where inventories are building up. The duty will applicable to steel items such as pig iron, semi-finished, flat and long category of products. These will now be subject to a basic customs duty of 5% ad valorem.

The move will provide some relief to the domestic steel players as it will bring down import of cheap steel products in India.

PM Says India Will Emerge Strong From Economy - Nov 24, 2008

Prime Minister Manmohan Singh today, 21 November 2008, said India will emerge strong from the global economy crisis and global institutions must be made more representative of developing nations. Global problems require global solutions, he said adding that this is the most important lesson of the past century for the present century.

Singh said the government will ensure that the shortage of demand from the global slowdown is neutralised to the maximum possible extent through the use of fiscal and monetary policies and through the use of public investment.

Surged By Rs 700 On Heavy Buying Gold - Nov 24, 2008

Gold prices zoomed by a whopping Rs 700 to Rs 13,100 per 10 gram in the national capital on 22nd Nov, second such surge in less than a month on mounting economic uncertainties and a strong physical buying support on account of the ongoing wedding season.The precious metal recorded a heavy gain in a month after a rise of Rs 660 on October 25. Buying activity also picked up after the precious metal in New York spurted to $802.70 an ounce, recording a rise of over $60 in a day, traders said.

The gold became a safe haven after investor confidence was shaken as shares of Citigroup, the second-largest US bank by assets, tumbled for a fifth straight day.Falling equity markets also pushed the gold prices as some investors shifted their funds from melting stock markets to rising gold, as considered it a safe hedge. While the Bombay Stock Exchange index suffered a loss of 25 per cent in the last seven days, the US stocks on Wall Street slid to 11-year lows. Silver also firmed up on emergence of buying by stockists and commodity.

Investors, as it recorded a gain of 6.9 per cent to $9.57 a ounce in the US markets on Nov 21. Standard gold and ornaments shot up by Rs 700 each to Rs 13,100 and Rs 12,950 per 10 gram, respectively. Sovereign also rose by Rs 75 to Rs 10,550 per piece of eight gram. Silver ready spurted by Rs 450 to Rs 16,700 per kg and weekly-based delivery by Rs 595 to Rs 16,545 per kg. Silver coins were higher by Rs 100 to Rs 26,500 for buying and Rs 26,600 for selling of 100 pieces.

RBI Mulls Enhancing Credit Flow To Smes - Nov 24, 2008

The government and the RBI are considering to open a Rs 20,000 crore special refinance window to enhance growth of small and medium enterprises (SMEs), which are facing credit crunch. The special refinance window will encourage banks to lend funds to SMEs as the facility would be made available at a concessional rate, a finance ministry official said.The details of the scheme including the interest rate are being worked out and are likely to be announced by the central bank in the next 10-15 days.

The facility would help meet the twin objectives of giving much required liquidity boost to the sector and at the same time help banks in meeting the mandatory 40 per cent priority sector lending target. In addition to lack of credit, the SME sector is also suffering from low demand of their goods in the domestic market as well as for exports which have fallen by 15 per cent in October. Besides, helping the small and medium enterprises in getting funds at cheaper rates, the scheme will ensure that banks maintain their interest margin even after lending the funds to SMEs below the benchmark Prime Lending Rates (PLRs).

Under the refinance facility, the banks can borrow funds from the central bank concessional rates to on lend funds to the small enterprises. Since the beginning of the liquidity crisis in middle of September, banks have shown their reluctance in providing credit to the SME sector on fears that loans would turn bad.

Rural Job Scheme Yet To Gain Momentum In Districts - Nov 22, 2008

Karnataka is lagging behind in the implementation of the National Rural Employment Guarantee Act (NREGA), a flagship programme of the Union Government, as compared to the performance of the three other southern States where the programme has also been implemented. In fact, the scheme is yet to take off in 18 districts, some of which have been categorised as backward.The scheme, which was extended to 29 districts in the State in 2008-09, has not lived up to its potential for transforming livelihoods in rural Karnataka.

In terms of fund utilization, Karnataka ranked the last among the southern States. The State had spent only 27 per cent (Rs. 131.78 crore) of the available funds (Rs. 468.08 crore) as on October 31, 2008. This is lower than the 68 per cent spending achieved by Andhra Pradesh, 59 per cent by Tamil Nadu and 49 per cent by Kerala. Among the four States, Andhra Pradesh has spent the largest sum of Rs. 1,879.85 crore.

A directorate for NREGA has been set up in Karnataka. But the scheme is yet to pick up momentum in a majority of the districts. The Comptroller and Auditor General of India has, in a 2007 report, criticized the Government for laxity in the implementation of the scheme, and for the non-distribution of job cards.

Rupee Crossed The Psychologically Important Level - Nov 22, 2008

For the week ended November 14, 2008 the foreign currency reserves touched $246.349 billion as dropped by $5.015 billion. In the previous week, the foreign currency assets had fell by $1.519 billion to touch $251.364 billion. For the week under consideration, the foreign currency assets fell by $5.006 billion to $237.521 billion. Foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies (such as Euro, Sterling, Yen) held in reserves.

The euro had touched a two-week low of $1.290 against the dollar, as Germany, Europe''s biggest economy, was in recession. This may be a reason of fall in the value of the country''s foreign currency assets, said a bank official. During the week, FIIs sold a net of $324.9 million in the equity market. For the week under review, gold was unchanged at $8.382 billion. SDRs fell by $6 million to $3 million. The country''s reserve position in the IMF fell by $3 million to $443 million. This week the rupee crossed the psychologically important level of 50.60 against the dollar despite intervention by the central bank.

Preparing Financial Plan For Infra Sector - Nov 22, 2008

Ashok Chawla, department of Economic Affairs secretary has said that the country could expect more sops and interest rate cuts. He said the government is also very close to finalize a relief package for industry like for infrastructure companies as well as exporters.All sectors are affected by the financial crises and the next line of measures from the government would be addressed to exporters and infrastructure companies. Monetary measures are something that the government is open about, top officials in the Finance Ministry say that at present RBI''s steps are sufficient.

However, it is still unclear whether the government will agree to set up a dollar fund for this purpose as the RBI governor is not very inclined towards using India''s forex. Instead, it is likely that a rupee line of credit would be provided for infrastructure companies through banks.

The timing of such announcements might possibly be clubbed with the export package. Under it, the government is actively examining the re-installment of interest rate subvention for cheaper credit and a hike in the duty drawback rates, as well as enhancing the DEPB benefits. Along with this, it is also examining a proposal to hike the priority sector lending cap for housing from the present Rs 5 lakh to a bracket of Rs 15-20 lakh.

But the corporates are planning to pick up more dollar loans from abroad, as external commercial borrowings might be disappointing. However, neither the RBI nor the Finance Ministry is in favour of such a move. So, while the relief story is expected to unfold by the end of next week sometime it still remains unclear as to when would RBI cut rates again.

India To Sustain 8% Growth Rate PM - Nov 22, 2008

According to Prime Minister Manmohan Singh, India will sustain a growth rate of eight per cent despite the fears of the global financial crisis. Exuding confidence that India had the "resources and the wisdom to grapple and deal" with the crisis, Singh said all instruments of public policy like monetary, fiscal, public investment and exchange rate "will be deployed" to tackle it.

Observing that the global economy was passing through a "deep crisis", the economist-turned-politician said "we cannot pretend that we are not affected by it. Noting that global problems required global solutions, he said there was a need for a global safety net.

Government On Cabinet Meeting Chaired Scales Govt -Nov 21, 2008

The government on 20th Nov announced a hefty 50 to 300 per cent increase in pay-packages for the officers of PSUs with effect from January 1, 2007.A Cabinet meeting, chaired by Prime Minister Manmohan Singh, approved the new scales for 1,20,000 non-unionized supervisory staff and 2,58,000 board level officers in 216 operational Central PSUs.It approved uniform fitment of 30 per cent of basic pay plus dearness allowance for profit making PSUs with effect from January 1, 2007.

For weak and non-profitable PSUs, the fitment will depend on their affordability and will range between 10 per cent and 20 per cent. The package would include revision in other allowances like house rent allowance, besides performance related incentives, Minister of State in Prime Minister''s Office Prithviraj Chavan told reporters in New Delhi. While the new pay structure would be implementable from January 1, 2007, the new allowances would accrue to employees only after the decision is notified by individual units.

The Cabinet relied on the Committee of Secretaries recommendations to classify PSUs into four categories - A, B, C and D, instead of five categories - A+, A, B, C and D recommended by the Rao Committee in May. The chairman of ''A'' category PSU will now be eligible for Rs 80,000 to 1,25,000 pay scale as against current Rs 18,500 to 23,900.

Gold Continues To Rise As Precious Wilt - Nov 21, 2008

Gold prices rose for the third straight day as increased by Rs 180 to close at Rs 12,350 per ten gram in the bullion market on reports of the precious metal''s steep rise in the Asian region as investors shifted their funds from the melting bourses. Buying activity in gold also picked up in the view of marriage season amid report of rising trend in overseas market.

Standard gold and ornaments which had gained Rs 80 each in last two trading session, surged by Rs 180 each to Rs12,350 and Rs 12,200 per ten gram respectively. Sovereign followed suit and traded higher by Rs 50 to Rs 10,450 per piece of eight gram. In the overseas markets gold rose to 746.00 dollar an ounce against last close of 740.50-741.50.

On the other hand, silver ready lacked necessary buying support and declined by Rs 100 to Rs 16,550 per kg and weekly-based delivery by Rs 80 to Rs 16,370 per kg. Its coins, however, remained steady at Rs 26,400 for buying and Rs 26,500 for selling of 100 coins.

Rupee Hits New Record Low Economic Forecast - Nov 21, 2008

Intervention by the Reserve Bank through state-owned banks notwithstanding, the Indian rupee on Thursday ended at yet another record low of 50.18/22 lower against the greenback due to exodus of foreign investments and descending equity markets.According to the dealers, heavy dollar selling caused high level of volatility at the interbank foreign exchange (forex) market even as the Indian unit moved widely in a range of 49.88 to 50.60 during the day.

They said unstoppable capital outflows and bearish local stocks were the main factors for the rupee''s downfall. Fears of more portfolio outflows from emerging economies in the light of the current financial crisis, which seems to be blowing out of control, heightened worries that it may pull global economy deeper into recession. There was a virtual meltdown in global equity markets on Thursday after the release of a dismal US economic data and the Federal Reserve lowered the US growth forecast for 2009.

Second Straight Week To 8.90 Per Cent Lowest - Nov 21, 2008

Inflation eased for the second straight week to 8.90 per cent, the lowest in five months, led by fall in prices of crude oil, metals and other manufactured items. Reduced inflation giving RBI the legroom needed to cut policy rates to fuel economic growth.Inflation declined by 0.08 (rpt) 0.08 percentage points during the week ended November 8 from 8.98 per cent a week ago, prompting analysts to predict that the rate of price rise would come down to around 5.5 per cent this fiscal end, much lower than the Reserve Bank''s expectation.

Even as falling international crude prices and abolition of basic customs duty on Aviation Turbine Fuel by the Government softened fuel prices and metal rates came down simultaneously, primary food articles such as vegetables and fruits turned expensive. The index for fuel, power, light and lubricants declined by 0.9 percentage points, as prices of ATF, light diesel oil, furnace oil and naphtha came down quite a bit.It was the hike in administered prices of petrol, diesel and LPG in June that had pushed inflation to double figures.

It remained in double digits till almost the end of October, returning to single figure only after crude prices fell - giving the government a breather just ahead of assembly polls in a number of states, including Delhi. RBI has already injected around Rs 2,75,000 crore in the system by taking a slew of cuts in policy rates and reserve ratios.

Economic Said Real Estate To Boost Demand - Nov 20, 2008

Finance Minister P Chidambaram today, 18 November 2008, said the government may consider cutting excise duty on some items as a part of efforts to boost factory output and lift economic growth. But he said companies in the real estate, airline, hotel and two-wheeler sectors must cut prices to boost demand.India's economy is slowing down after growing at an annual rate of 9% or more in the past three years.

The economic growth slumped to 7.9% in the April-June 2008 quarter from 9.2% in the same period last year. The Reserve Bank of India has downgraded its growth forecast to 7.5% to 8% for the current financial year. Some private sector economists expect an even lower rate of growth.

Government On Imposition Specified The Cheaper - Nov 20, 2008

The government on Tuesday, 18 November 2008, announced imposition of 5% import duty on specified iron and steel items to protect the domestic steel industry from cheaper imports, especially from China where inventories are building up. The duty will applicable to steel items such as pig iron, semi-finished, flat and long category of products. These will now be subject to a basic customs duty of 5% ad valorem.

The move will provide some relief to the domestic steel players as it will bring down import of cheap steel products in India.

Rupee Fell Sharply To Closed At Dollar All Time Low - Nov 20, 2008

New Delhi: The rupee fell sharply to its all time low of 50.02/03 against the greenback after losing 35 paise on relentless capital outflows, promoted by heavy demand for US dollar and weak equity markets.The rupee, which has been on losing-spree for the past two days, has fallen by a hefty 101 paise or 2.06 per cent. However, the loss is a mind-boggling Rs 10.61, or 26.92 per cent, since January this year.

Dealers in foreign exchange said there was strong demand for the US currency on Wednesday from oil refiners for their import payments against very little dollar sales. Dollar supply was scarce for the past one-year or so, it has been further squeezed ever since the economic crisis emerged in the US.

Though dollar has been on a declining trend against its major rivals, experts were baffled at its appreciation even took a heavy toll on US economy.The domestic currency moved in a wide range between 49.54 and 50.04 during the day after early signs of a recovery in sync with an initial surge in equity markets on fresh hopes of further monetary measures by the central bank.

Infrastructure Firms Are In A Tight Spot Is Working - Nov 20, 2008

Mumbai: With dollars having dried up due to the global credit crunch and infrastructure firms are in a tight spot, RBI is now working on a package for this sector. India desperately needs better roads, improved power supply and bigger ports but infrastructure companies being in mayhem as liquidity dried up due to global crunch. There seems to be no clear end in sight to the global credit crunch, the infrastructure companies, which have large long-term financing needs, have taken a significant hit.

However, at the same time, a slackening growth in the core sector demands a greater focus on infrastructure spending. Some believe that although India may not have the room for a large fiscal package like China, even a smaller dollar boost may help stimulate demand.

According to sources, the Central Bank may carve out a 10 billion dollar fund from its forex reserve and route it through a SPV or a nodal agency like IIFCL. This money would then be lent to infrastructure companies as an unsecured loan with strict restrictions on end use and the tenor of loan. However. Even as RBI continues to debate on the pros and cons of the plan, experts opine that the timing is perfect to spur infrastructure growth.

Economy As A Whole Including Agriculture Sector - Nov 19, 2008

Amid fears of large-scale lay-offs by companies in the wake of economic disturbance, Planning Commission Deputy Chairman Montek Singh Ahluwalia said that the number of jobs in the country will not go down despite the economic growth of 7 per cent or less.For economy as a whole, including agriculture sector, I don''t believe that the total number of jobs will go down even if GDP growth is at 7 per cent or less than 7 per cent, Ahluwalia said at India Economic Summit.

However, he said, it was quite possible that in some sectors of industry, which were badly affected, there could be some contraction of jobs. On inflation, which has come down to single digit for the first time in the last five months, Ahluwalia said it was expected to go down further. Momentum of inflation in the last six to eight weeks, if deseasonalised, was not a problem, he said, adding, given the slowdown and commodity prices coming down, it is not going to be a problem. During 2007-08, GDP growth was a little over 9 per cent and the average growth in the last four years remained at 9 per cent.

Reverse Repo Auction Under The First LAF - Nov 19, 2008

Call rates ended lower at 6.50-6.75 per cent, as against the previous close of 6.90-7 per cent. The RBI received and accepted 1 bid for Rs 2,000 crore in the one-day repo auction under the first LAF in the one-day reverse repo auction under the first LAF, the RBI received and accepted 2 bids for Rs 2,500 crore. In the one-day repo auction under the second LAF, the RBI received and accepted 3 bids for Rs 2,700 crore.

In the one-day reverse repo auction under the first LAF, the RBI received and accepted 11 bids for Rs 13,600 crore. In the 14-day special repo auction scheme for mutual funds and NBFCs under the LAF, there were no bids. In the CBLO market, there were 473 trades amounting to Rs 29,483.35 crore in the rate range of 5.81-6.25 per cent.

Reserve Bank Is Continuously At Right Time Subbarao - Nov 19, 2008

The Reserve Bank is continuously watching the liquidity situation and would decide on its future course of action on interest rates at an appropriate time, Governor D Subbarao said.We are hearing what everyone is saying and the decision will be taken at an appropriate time, Subbarao told reporters after his meeting with Finance Minister P Chidambaram, when asked about the RBI’s planning about rate cuts.

Subbarao is believed to have discussed the current liquidity situation in the country''s banking system at a meeting with the Finance Minister here, where private sector banking giant ICICI Bank CEO and CII President K V Kamath was also present. According to the RBI Governor, the RBI is constantly and continuously monitoring the situation. Asked if ICICI Bank would cut interest rates, Kamath said that interest rate is a play of demand and supply. Yesterday Commerce Minister Kamal Nath said after a meeting of the Prime Minister-chaired committee on tackling the global turmoil that the RBI might look at fresh measures to inject more funds into the cash-starved banking system.

Finance Minister Said On India Will Satisfactory - Nov 19, 2008

Finance Minister P Chidambaram said on Nov 18 that India will record satisfactory growth this fiscal and growth will rebound next year. The government will continue to balance the growth and inflation but the bias now is towards stimulating growth. Speaking at the India Economic Summit in New Delhi, Chidambaram said that the global recession threatens to be longer than earlier estimated and India is facing spill out effects of global recession. He added that there is no risk of recession in India though he admitted that a decline in world output would affect India''s exports.

The government will take steps to motivate the domestic economy, Chidambaram said. It would be ''good'' if interest rates trend down, he added. The finance minister also expressed hope that the direction of FII flows could reverse next month.

Governor Says The Central Bank Action Right Time - Nov 18, 2008

The Reserve Bank of India (RBI) governor D Subbarao today, 18 November 2008, said the central bank is monitoring the economic situation and will take action at the right time. The RBI government today met Finance Minister P Chidambaram and senior finance ministry officials.India's economy is slowing down after growing at an annual rate of 9% or more in the past three years.

The economic growth slumped to 7.9% in the April-June 2008 quarter from 9.2% in the same period last year. The Reserve Bank of India has downgraded its growth forecast to 7.5% to 8% for the current financial year. Some private sector economists expect an even lower rate of growth.

Makers And Two Wheeler Must Cut Prices Chidambaram - Nov 18, 2008

Finance Minister P Chidambaram asks auto companies, realty firms, airlines to cut prices. He say''s "airlines must cut prices; real estate must cut rates of apartments and homes they sell; car makers and two-wheeler makers must cut prices. In the recent G-20 meet, Chidambaram told the United States to put their economy in order for sure, but warned India Inc that they are not doing their bit to keep India''s growth on track, in these tough times.

FM said that, what needs to be done is that Corporate India should cut prices. Instead, they are cutting production and that''s wrong. It''s evident that the Finance Minister knows that times are tough and so all that''s needed beyond global action is local stimulus and a consensus to keep the growth going at any cost.

Economy Chidambaram Added The Country Export - Nov 18, 2008

Finance Minister P Chidambaram today said the government will take steps to stimulate the domestic economy to compensate for the downside caused by the downturn in the world economy. Chidambaram added the country could miss its annual export target of $200 billion for this fiscal year as the slowdown in developed nations trims overseas demand. He said the rupee will strengthen again once capital starts flowing in.

Government Would Not Hesitate To Tariffs Sharply - Nov 18, 2008

New Delhi: During the meeting of the Prime Minister-chaired committee on tackling the global turmoil the RBI is expected to announce fresh measures to infuse more funds into the cash-starved banking system. The meeting considered certain steps and RBI would look at them... Various methods of injecting liquidity through repo and reverse repo (short-term) rates were discussed, The meeting was attended by Finance Minister P Chidambaram, Commerce Minister Kamal Nath, Reserve Bank of India (RBI) Governor Duvvuri Subbarao and senior government officials, including Finance Secretary Arun Ramanathan and Commerce Secretary Gopal K Pillai.

To a question on the job cuts, he said the government would not hesitate to raise tariffs sharply wherever cheap imports were causing injury to the domestic industry.The meeting looked at liquidity issues, especially in housing, construction and non-banking financial sectors.The RBI has unlocked Rs 2.75 lakh crore during the last a few weeks through cuts in various mandatory deposits that banks need to keep with the central bank. It also allowed housing finance companies to borrow short-term funds from overseas sources.

Steps To Improve Liquidity In Money Market - Nov 17, 2008

The Reserve Bank of India on Saturday, 15 November 2008, announced measures to improve money market liquidity and help exporters. The measures include extension of a special repurchase facility to provide liquidity for mutual funds and non-banking finance companies. till March 2009, increase in the limit on export credit refinance available to banks, allowing housing finance companies to raise funds.

Through short-term overseas borrowings, reduction in provisioning on standard assets of banks to a uniform level of 0.4%, and reduction in risk weights for banks on commercial real estate and on unrated claims on corporates.The central bank also said it would consider proposals from local firms to buy back foreign currency convertible bonds early.

Real Economy Is Clearly Industrialized Countries - Nov 17, 2008

Prime Minister Manmohan Singh said while he was addressing the Group of 20 meeting in Washington, there is a need to take urgent steps to strengthen the global trading system and forestall any protectionist tendencies which always surface in times of recession. We are meeting at a time of exceptional difficulty for the world economy. The financial crisis, which a year ago seemed to be localized in one part of the financial system in the US, has exploded into a systemic crisis, spreading through.

The highly interconnected financial markets of industrialized countries, and has had its effects on other markets also. It has choked normal credit channels, triggered a worldwide collapse in stock markets around the world. The real economy is clearly affected. Industrialized countries were expected to slow down in 2008. They are now projected to be in a recession in the second half of the year, and there is as yet little prospect of an early recovery. Many have called it the most serious crisis since the Great Depression.

India is experiencing this negative impact. After growing around 9 per cent per year for four years, our growth rate is expected to slow down to between 7 per cent to 7.5 per cent in the current financial year. The pace of growth next year will depend, in part, upon how long the global recession lasts and how quickly global capital flows return to normal. India''s growth is mostly internally driven and can maintain a strong pace of growth in the coming years, though many developing countries will be hit harder.

A slowing down of growth in developing countries will push millions of people back into poverty, with adverse effects on nutrition, health and education levels. These are not transient impacts but will impact a full generation. If we are to prevent a slide back and ensure that Millennium Development Goals are achieved, we need to ensure that growth in developing economies is not affected.

RBI May Cut Repo Rate By 50 Bps Experts - Nov 17, 2008

Experts are feeling that receding inflation has raised hope for a further cut in the short-term lending (repo) rate by at least 50 basis points. For the week ended November 1, inflation slipped to single digit of 8.98 per cent for the first time in the last five months. RBI has already reduced repo rate by 150 basis points to 7.5 per cent from earlier level of 9 per cent last month. Following reduction in the repo rate and other benchmark rates, several banks have reduced their benchmark lending rate by 75 basis points, leading to cheaper home, commercial, auto and personal loan.

At the same time, RBI has infused liquidity in the last one month to the tune of Rs 2,70,000 crore by cutting the Cash Reserve Ratio by 350 basis points and Statutory Liquidity Ratio by 100 basis points. Measures to inject liquidity as well as nudge interest rate lower in the near term is likely as inflation concerns rapidly recede, said Yes Bank Chief Economist Subhada Rao. Even corporate India has stepped up its demand for cut in lending rates as the inflation dipped to single digit at 8.98 per cent for the week ended November 1. In view of falling prices, Ficci has asked RBI for further cut in the interest rates and easing of credit policy to tackle slowdown in the industrial sector.

Worldwide Many People Are Losing Their Jobs - Nov 17, 2008

Worldwide many people are losing their jobs on deteriorating economic condition, India has a reason to cheer as in just one week, firms have disclosed plans of hiring 40,000 people in the country, while nearly 30,000 jobs fell on the firing line elsewhere.Private insurer MetLife India is planning to recruit about 2,000 managers and a whopping 30,000 advisors in the coming months.Further, global management consultancy firm Deloitte Touche Tohmatsu is looking to hire 3,500 employees in the country.

On the contrary, in just less than a week, corporates, right from the US to UK have announced job cuts amounting to nearly 30,000. According to MetLife India''s Managing Director Rajesh Relan, MetLife India is planning to hire about 2,000 sales managers and 30,000 financial advisors by March, which would nearly double the two workforces.

At present, MetLife India has about 2,220 sales managers and more than 30,000 financial advisors working for it, which would grow to a strength of about 60,000 advisors and more than 4,200 managers by March 2009.Last month, the unemployment rate in the world''s largest economy - US - touched a 14-year high of 6.5 per cent, which is an indication of the deepening economic turmoil. Moreover, global management consultancy firm Deloitte Touche Tohmatsu is planning to hire 3,500 employees in India, aiming to take the firm''s total headcount to 12,000 in the next three years.

Financial Remain Under Severe Strain Says Bernanke - Nov 15, 2008

Federal Reserve Chairman Bernanke said that financial markets remain under severe strain" and that part of that stress has been the "strong demand for dollar funding." He also said that policymakers will remain in close contact, monitor developments closely, and stand ready to take additional steps should conditions warrant.

Forex Reserves Fell By US $ 1.52 Billion During The Week - Nov 15, 2008

India foreign exchange reserves declined by US $ 1.52 billion during the week ended 7th November 2008, as per the RBI’s Weekly Statistical Statement. However, fall in reserves was bit moderate during the week compared to sharp fall of US $5.53 billion and US $15.47 billion dollar in the previous two weeks. The aggregate foreign exchange (including foreign currency assets, Gold, SDRs, and reserve position in IMF) reserves stood at US $ 251.36 billion compared to US $ 270.18 billion year ago and US $ 309.72 billion as on end March 2008.

As per the RBI’s monthly bulletin for November 2008, total foreign investment inflows into the India dipped 46.16% to US $13.8 billion in April-September 2008 compared to strong inflows of US $25.66 billion inflows in the same period last year. During this period, FIIs have made a net withdrawal of US $5.5 billion compared to net inflow of US $15.51 billion in the corresponding previous half-year period. Fortunately, FDI inflows more than doubled to $19.29 billion during April-September this year from US $7.25 billion in the same period a year ago.

Meanwhile India’s merchandise trade deficit for the first half of 2008-09 has zoomed 52.87% to US $ 59.77 billion, compared to $39 billion during April-September 2007, due to slowdown in exports growth and higher growth in imports. Soaring crude oil prices and sharp depreciation of rupee helped in exaggerating the import bill. In the wake of sharp fall in capital inflows India’s dependence on capital inflows to finance its trade deficit is a major concern.

The partially convertible Indian rupee continues to be volatile despite slew of measure, and weakened in line with the stock market. Indian rupee depreciated by 4.52% in just 4 trading days to Rs 49.46 per dollar (RBI reference rate) on 14 November from its recent strong position of Rs 47.32 a dollar as on 10 November, due to heightened outflows from the local share market.

Prospective Home Loan Buyers Not Ease Burden Soon - Nov 14, 2008

Prospective home loan buyers could be disappointed if they are thinking that banks will now reduce interest rates as inflation surprisingly has come down to single digit. Bankers, including country''s largest housing finance company HDFC, have indicated that interest rates on home loans are unlikely to fall in the wake of a decline in inflation.Pointing out that cost of funds, a determining factor in deciding lending rates, remains high, HDFC Chairman Deepak Parekh literally.

Ruled out slashing home loan rates. Inflation for the week ended November 1 fell by by 1.74 per cent to 8.98 per cent. Public sector Union Bank''s chief M V Nair also hinted that lending is likely to continue at the same rate as it (interest rate) is affordable now. Lending rates had gone up significantly after a series of measures adopted by the Reserve Bank to tighten the money supply in a bid to bring down inflation which was hovering around over 12 per cent in September.

PM Leaves For G20 Meet On Global Washington - Nov 14, 2008

The world leaders are meeting in Washington on Saturday to discuss rescue measures for the current global downturn. Prime Minister Manmohan Singh, who left on Thursday night for the G20 meet, is ready with his prescription to tackle the global meltdown.He said, "Our message to G20 will be that they must do everything in their power to ensure that the process of development and millennium development goals are not adversely affected.

International financial institutions like the IMF and World Bank should be strengthened to ensure that the fallout on developing countries is minimal.The Prime Minister further added that since India wants a bigger say in multilateral agencies like IMF and the World Bank and in setting up a new international financial architecture, the IMF and multilateral financial institution need to be strengthened. He also stressed that in a coordinated approach towards monetary and fiscal policies, India plans to work in tandem with China, Brazil, Mexico and South Africa within the G20.

Finally, the Prime Minister pushed for special packages from the IMF and WB to fund India''s infrastructure projects. This, he said, will help India revive its growth momentum. India is certainly worried that the financial crisis is now affecting its real economy, threatening exports as well thousands of jobs in the private sector. However, most experts opine that although one meeting of the G20 countries cannot turn around the economy, it can show them the path to recovery.

Dollar Slumped And Advanced Increasing Concerns - Nov 14, 2008

Gold may jump above $1,000 an ounce in 2011 as global mine output drops, mining costs rise and demand increases, Morgan Stanley said. Mining production actually peaked in 2001 and has since been declining, the bank''s commodity analyst Hussein Allidina said in Singapore. "When I look at the demand side, as income growth accelerates, the consumption of gold for jewellery purposes increases.Gold climbed more than double in the past six years and reached a record $1,032.70 an ounce on March 17 as the dollar.

Slumped and oil advanced, increasing concerns that inflation would accelerate. In the past eight months, the precious metal plunged 31 per cent as the dollar rallied, oil collapsed and the global credit crisis pushed the world toward a recession.

Back To Single Digit Inflation Dips To 8.98% - Nov 14, 2008

Falling commodities prices continued to cool India''s inflation, which has been running near a 13-year high, the Ministry of Commerce said on Nov 13. The wholesale price index - India''s most-watched inflation measure - eased to 9 percent for the week ended Nov. 1, down from 10.7 percent for the prior week.It was the first time inflation has slipped to a single-digit rate since hitting a high of 12.4 percent in the week ended Aug. 2. This time last year, inflation was 3.4 percent.

Policy-makers have been watching inflation rates closely, as they seek to reinvigorate growth without letting prices run out of control in the build up to national elections.Business groups have been pushing for further interest-rate cuts to stimulate India''s economic growth, which has faltered as foreign investment drained from the country.This week, Goldman Sachs downgraded its economic growth forecasts for India, to 6.7 percent from 7.5 percent for fiscal year 2009, and to 5.8 percent from 7 percent for fiscal year 2010.

Goldman said the shock to India''s financial sector from Wall Street''s convulsions has been "larger than expected" and predicted a continuing slowdown in capital expenditure, domestic consumption, and exports.Tushar Poddar, vice president of Goldman''s Asia economics research team, also warned that nation could be at the precipice of a downward credit spiral even though Indian banks are well-capitalized and the country''s consumer credit boom is just four years old.

Gold Futures Rise On Firm Global Cues - Nov 13, 2008

Gold futures on Nov 12 increased by up to 0.50 per cent on the Multi Commodity Exchange, on cues from firm global markets, as the dollar weakened against the euro, and added to the bullion''s sheen as an alternative investment.

The most-active December contract increased by 0.50 per cent to Rs 11,682 per 10 gram at MCX, while February contract gained 0.37 per cent at Rs 11,717. Similarly, April contract moved up by 0.12 per cent at Rs 11,780 per 10 gram. Globally, gold for immediate delivery gained 7.58 per cent to USD 739.38 an ounce as yesterday''s decline encouraged buying of the metal, and as the dollar weakened against the euro, bullion became more attractive as an alternative investment option. Market experts said gold generally moved in the opposite direction to the dollar, which weakened by 0.9 per cent against the euro.

Industrial Growth Slips To 4.8% - Nov 13, 2008

It was a poor show by the manufacturing sector once again that pulled down the industrial growth rate to 4.8 per cent in September from a much healthier seven per cent growth reported in the same month last year. Surprisingly, while experts tended to analyse the index of industrial production (IIP) data released here on Wednesday as a clear signal of an economic slowdown to correct, which would require a fiscal stimulus along with a further cut in key rates by the Reserve Bank of India, Finance Minister P. Chidambaram dubbed the growth figures as ''encouraging,'' especially when compared to the dismal performance in August.

As for the first six months of the current fiscal, the industrial growth rate stands halved at 4.9 per cent as compared to 9.5 per cent during April-September 2007-08. In a statement, Mr. Chidambaram viewed that the IIP data for September were encouraging, mainly because the overall growth for the month was significantly higher than the provisional estimate of 1.3 per cent and the subsequently revised figure of 1.42 per cent.

FM Considers September IIP Output Encouraging - Nov 13, 2008

Finance Minister P Chidambaram described September IIP data as more encouraging the industrial growth of 4.8 per cent. Although he felt data collection must be improved and made more relevant, contemporary and universal.

After the poor results reported for the month of August 2008, the quick estimates of IIP for September 2008 are more encouraging. I say even while I maintain that data collection must be improved and made more relevant or more contemporary and universal, he said.

According to data released by the government today, the industrial output for August was revised upwards to 1.42 per cent against the provisional estimate of 1.3 per cent, which many experts had described as aberration.

Call Rates Closed Slightly Lower - Nov 13, 2008

The call money market witnessed a fall as Cash rates ended lower at 7.30-7.40 per cent, as against the previous close of 7.40-7.50 per cent. There were 5 bids for Rs 3,490 crore in the two-day repo auction under the first liquidity adjustment facility (LAF). There were no reverse repo bids. In the two-day repo auction under the second LAF, the RBI received and accepted five bids for Rs 7,500 crore.

In the two-day reverse repo auction under the second LAF, the RBI received and accepted one bid for Rs 15 crore. In the 14-day special repo auction scheme for mutual funds and NBFCs under the LAF, there were three bids for Rs 895 crore. In the CBLO market, there were 536 trades amounting to Rs 34,479.25 crore in the rate range of 6.80-7.45 per cent.

Excise Revenue Collections Fell By 8.7% In Period - Nov 12, 2008

In another sign of sharp deceleration, India's excise duty collections fell by 8.7% to Rs 9399 crore in October 2008. Customs duty collections also eased by 0.9% to 9265 crore during this period. As a result, the total customs and excise duty collections fell by 5% to Rs 18664 crore in October 2008.In the seven months ended October 2008, our customs duty collection zoomed by 15.2% to Rs 66621 crore, but excise duty collections inched up by only 0.6% to Rs 65322 crore.

During this period, the total customs and excise duty collections grew by 7.5% to Rs 131943 crore.Service tax collections grew by 18% to Rs 4752 crore in September 2008, and by impressive 28.7% to Rs 29867 crore in the first half of the current fiscal.

Concerns Drops By 1.6 Per Cent To Close At 48.1250 - Nov 12, 2008

Rupee closed at 48.1250 its lowest in a week on Nov 11, as steep drop in shares fuels concerns of more outflows, pressuring the currency lower. Rupee snapped it six day gain and closed at 48.1250/1400 per dollar, its weakest since November 4, and 1.6 per cent below 47.35/37 at close on Monday. On October 27, the rupee had fallen to a record low 50.29.

Prime Minister Economic Advisory Council Member - Nov 12, 2008

The Indian Industrial Production (IIP) numbers will be released today, for the month of September, and is expected to show a temporary rebound in the industry, mainly due to seasonality. Prime minister''s Economic Advisory Council member Saumitra Chaudhuri said, "I expect the industrial growth for September to be around 6%. The 1.3% growth in August was an aberration. I believe the growth is healthy, even though moderate."

Over the past few months, the industry has borne the brunt of the meltdown, but the IIP for September could bring in some respite, though for a brief time period. After a sharp dip in growth in August, the IIP is expected to rebound marginally in September to an estimated 3.2 per cent. However, some economists predict an upward surprise pegging growth at over five per cent, hoping that a seasonal revival in sectors like commercial vehicles and cement will push growth.

They feel that this would help to maintain the growth forecast. While Morgan Stanley estimates that growth in the financial year, 2010 will dip to 5.7 per cent, Goldman Sachs, too, mirrors those projections. Moreover, ratings agency Fitch also expects growth to slip below 6 per cent.

Ministry Exports In India Declined For The Backed - Nov 11, 2008

According to a senior Commerce Ministry official, exports in India, declined for the first time in October. This decline is backed by the global economic turmoil and recession fears. Director General of Foreign Trade R S Gujral said that for the first time in the last five years, in October, there has been a decline of over 15 per cent (in exports) in dollar terms. Export of the petroleum products declined by more than 20 per cent. Growth in April-October has been 21.5 per cent, down from 30.9 per cent for the April-September period.

Partially Convertible Rupee Closed At Stronger Than - Nov 11, 2008

Indian rupee ended stronger on Monday due to the handsome gains in the domestic stock market that renewed hopes for fresh capital inflows. The partially convertible rupee closed at 47.35/37 per dollar, 0.6 per cent stronger than Friday''s close of 47.65/66.Domestic currency also gets hopes from the China''s $586 billion spending plan that is expected to investor confidence in Asian economies.

Maha Govt Will Build 10 Lakh Houses In Two Years - Nov 11, 2008

Maharashtra government is planning to build 10 lakh houses in two years as its commitment to provide affordable housing for every one, especially socially and economically weaker sections. For this purpose government is expecting support and participation of builders.

GST As An Transaction According Government - Nov 11, 2008

The Union finance ministry has taken the view that the proposed goods and services tax (GST) would not need to distinguish between goods and services. It looks merely look at the transaction value on which the tax is applied .The ministry also believes that the proposed single, comprehensive indirect tax would be beneficial only if exemptions are very sparingly allowed. Subsume as much extant taxes in it.

In general, the centre is for a more inclusive GST that is non-discriminatory between goods and services or among goods. States, on the other hand, are keen to ensure that their taxation powers won''t be undermined.

After Some Measures Taken By To Ease Liquidity - Nov 10, 2008

After some measures taken by RBI to ease liquidity in the markets, the inter bank demand for fund has lowered. The inter-bank call rate ended at 6.20-6.30 per cent, as against the previous close of 6.20-6.40 per cent. There were no bids in the three-day repo auction under the first liquidity adjustment facility (LAF). In the three-day reverse repo auction, there were 7 bids for Rs 3,395 crore. In the three-day repo auction under the second LAF, the RBI received and accepted 6 bids for Rs 7,300 crore.

In the three-day reverse repo auction under the second LAF, the RBI received and accepted 23 bids for Rs 23,255 crore. In the 14-day special repo auction scheme for mutual funds under the LAF, no bids were received. In the CBLO market, there were 429 trades amounting to Rs 19,317 crore in the rate range of 1-6.10 per cent.

Selling Dollars On A Sustained Basis After The Rupee - Nov 10, 2008

The foreign exchange reserves have continued to drop for the sixth consecutive week, down by $5.532 billion to touch $252.883 billion for the week ended October 31. The reserves have declined by over $31 billion in the past one month alone. For the week ended October 24, forex reserves fell by $15.47 billion-the largest fall in a single week ever--to $258.415 billion.The RBI has been selling dollars on a sustained basis after the rupee breached the 50 level against the dollar in October.

In the week under consideration, the dollar strengthened against the euro and the pound in the overseas markets, which had a revaluation effect on the reserves, partly causing the decline, said a dealer with a private bank.

The foreign institutional investors have been net sellers in the equity markets to the tune of $809.10 million for the week ended October 31. According to RBI''s Weekly Statistical Supplement, foreign currency assets decreased by $5.349 billion to $244.045 billion. While gold reserves fell by $183 million to $8.382 billion, SDRs remained unchanged at $9 million respectively.

Economic Outlook Update Released Last Projected - Nov 10, 2008

According to Chairman of the Prime Minister''s Economic Advisory Council, Suresh Tendulkar, India''s economic growth may slip to about 7 per cent in the current fiscal due to the present global financial turmoil. The counsel had forecasted a gross domestic product (GDP) growth of 7.7 per cent in August. The Reserve Bank of India, in its policy review on October 24, had projected a GDP growth of 7.5-8 per cent.

While Finance Minister P Chidambaram recently expressed confidence that economy would grow 8 per cent despite the crisis. Along with this, the International Monetary Fund (IMF), in its latest World Economic Outlook update released last week, projected a growth rate of 7.8 per cent for India, down by 0.1 per cent from its forecast in October.

Apparel Gems And Jewellery Diamonds Brassware - Nov 10, 2008

According to a report by an industry lobby, exports may all short of the targeted $200 billion in 2008-09 by about 20 per cent. As per the Associated Chambers of Commerce and Industry of India (Assocham), seven key export segments - textiles, apparel, gems and jewellery, diamonds, brassware, handicraft and leather, are reeling under economic crises, which in turn will affect the overall exports figures.

Statistical Supplement Report Released By The Deposit - Nov 08, 2008

Weekly Statistical Supplement (WSS) report released by the Reserve Bank of India, indicated that the investment-deposit ratio for the scheduled commercial banks (SCB’s) surged to 30.18% for the fortnight ended 24 October 2008 compared to 28.27% in the previous fortnight.The cut in CRR by 250 bps to 6.5% with effect from fortnight beginning on 11 October 2008, released approximately Rs 87156 crore, on a total deposit of Rs 34,86,221 crore, in to the banking system.

During the fortnight ended 24th October 2008, SCB’s invested about Rs 71,226 crore more in government securities (Rs 10,52,266 crore outstanding as on 24 October). However, bank credit (including food and non-food credit) struggled to expand by just Rs 7637 crore to Rs 26,15,041 crore during the fortnight.

Thus we find that while RBI has cut SLR by 100 basis points effective from 8th November 2008, banks have chosen to rather increase the same to 30.18% as of 24th October 2008. Also, the cut in CRR (totally 350 basis points across October and early November 2008) was to increase liquidity in the banking system, for on lending to the industry. Instead, the Indian banks have followed their US counterparts, and are shying away from credit, and dumping the excess liquidity into government securities.

The bank credit increased 29% to Rs 26,15,041 crore up to 24 October 2008 on y-o-y basis compared with mere 22.5% growth recorded during corresponding period last year. The bank credit in the current financial year up to 24 October 2008 accelerated by 10.7% compared with 4.9% growth posted in the corresponding period in the last fiscal. The non-food credit extended to agricultural & activities, industry, services and personal loans etc, having share of 98.15% in the total bank credit, increased by 28.93% to Rs 25,66,787 crore, while the food credit expanded 22.07% to Rs 45,175 crore on y-o-y basis.

Meanwhile, deposits of SCB have increased 21% to Rs 34,86,221 crore on y-o-y basis as of 24 October. The time deposits rose 15.09% to Rs 30,14,475 crore on y-o-y basis and 12.79% in the current fiscal up to 24 October. The demand deposits surged 15.09% to Rs 4,71,746 crore on y-o-y basis, but declined 10.03% in the current fiscal.

Reacting To The Taken By The RBI And Commercial Banks - Nov 08, 2008

Reacting to the measures taken by the RBI and Commercial banks, the inter-bank call rate closed down at 6.20-6.40 per cent, against the previous close of 6.75-7 per cent. In the one-day repo auction under the first liquidity adjustment facility (LAF) there were no bids. In the one-day reverse repo auction, there were 10 bids for Rs 14,240 crore. In the one-day repo auction under the second LAF, the RBI received and accepted 1 bid for Rs 1,200 crore.

In the one-day reverse repo auction under the second LAF, the RBI received and accepte d 13 bids for Rs 17,590 crore. In the 14-day special repo auction scheme for mutual funds under the LAF, two bids were received for Rs 1,250 crore. In the CBLO market, there were 433 trades amounting to Rs 23,935.10 crore in the rate range of 5.60-6.25 per cent.

Beginning Of Season And Market Softening Prices - Nov 08, 2008

With the beginning of marriage season and softening prices, gold purchasing is expected to climb more than usual in the days ahead as dealers feel that sales of gold jewelleries may go up by nearly 25%. The precious metal prices, which had touched a low of 686 dollars an ounce in the bullion market during the last week of October, was today placed at 737.65 dollars an ounce. In the domestic markets, gold price was seen at Rs 11,850 per 10 grams.

level against Rs 13,000 a month back. However, according to the dealers, the buyers have a feeling that the best is yet to come. "Most of the customers are still waiting for the right time and for the prices to decline further in the near future. As the season will proceed the sales will definitely pick up," added one of the Delhi-based jeweller. But Haresh Soni of Premji Jewellers, who have stores in Gujarat, Mumbai and Gurgaon, told, due to money crunch in the market, customers are not buying any extra items and limiting their purchases.

Direct Tax Collections Which Were Revised Upwards - Nov 08, 2008

Centre''s direct tax collections, which were revised upwards mid-way for this fiscal, rose by just 10.66% at Rs 19,708 crore in the month of October, mainly on account of last date for filing of corporate tax returns this year. The collections stood at Rs 17,809 crore in the corresponding fiscal last year. However, according to tax official sources the collection for October 2008 are not comparable with the previous year, since corporates paid shortfall in their tax liability in the month of September after the last date of filing. returns was advanced to September 30 this year from October 31.

Furthermore, according to sources, at the time of filing of returns corporates usually pay shortfall between their actual liability and taxes paid earlier. During the period of April-October, the direct tax collections surged by nearly 29.52% at Rs 1,66,905 crore. It was at Rs 1,28,864 crore in the same period a year ago, according to a Finance Ministry release. Corporate tax collections were grew by 33.49% at Rs 1,05,174 crore, while personal income tax rose by nearly 23.14% at Rs 61,433 crore during the period. Earlier this year, direct tax revenues targets were revised to Rs 3,95,000 crore from Rs 3,65,000 crore for this fiscal. The revised figures were over 25% higher than the direct tax collections of about Rs 3,14,000 crore last fiscal.

Halting Yield Advances On Oil Worries Prices - Nov 07, 2008

Halting a three day style, the Bond prices closed up. However, it lost about 45 paise in intra-day trade, as inflation went up marginally. Inflation for the week ended October 25, up 10.72 per cent from 10.68 per cent the week before. The market was expecting inflation to touch 10.45 per cent. Total traded volumes on the order matching system were Rs 4,725 crore. The 8.24 per cent 10-year 2018 paper opened at Rs 103.25 (7.75 per cent YTM).

And closed at Rs 103.50 (7.71 per cent YTM), against the previous close of Rs 103.18 (7.76 per cent YTM). It touched an intra-day high of Rs 103.85 (7.66 per cent YTM). The 7.56 per cent 6-year 2014 paper opened at Rs 100.51 (7.45 per cent YTM) and closed at Rs 100.6 (7.43 per cent YTM).

Rupee Opened And Weakened To Dollar Selling - Nov 07, 2008

The rupee trimmed its gains against the dollar in a volatile market on strong dollar demand and as it tracked the equity market. The rupee opened at 47.90 and weakened to a day''s low of 47.95/96. Dollar selling by some big corporates saw the rupee touch the day''s high of 47.49/50. It ended trade at 47.66/69, 0.4% weaker from 47.46/50 at close on Wednesday. In the overseas market the dollar was strong against other currencies.

Reverses From The Falling Streak In Past Few - Nov 07, 2008

Inflation reverses from the falling streak in past few weeks and rose to 10.72 per cent for the week ended October 25 on account of higher prices of cereals and vegetables. The annual rate of inflation, measured by movement in the wholesale prices, was 10.68 per cent a week ago.The annual rate of inflation stood at 3.11 per cent a year ago. After declining for five consecutive weeks, the inflation showed a marginal increase as certain essential items like butter in the manufactured category became expensive.

Among other articles in the manufactured group, prices of gur increased, while woolen clothes became expensive by one per cent.Further, prices of automobiles, including motorcycle and autorickshaw, increased in the last week.However, spices and cement prices showed a decline. Steel and fuel prices remained unchanged.The revised figure for inflation stood at 12.38 per cent for the week ended August 30 as against 12.10 per cent during the corresponding period last year.

PM Likely To Meet Up Veterans On Prevailing - Nov 07, 2008

Considering the abnormal situation prevailing in the domestic market, Prime Minister Manmohan Singh is likely to meet corporate veterans tomorrow to take stock of the current credit crunch and work out steps to deal with the problem. This move may help to neutralise the impact of the global meltdown on the country.After meeting some captains of Indian industry earlier this week the Prime Minister. has now called a meeting of a smaller group comprising doyens of the Indian corporate world to discuss the current economic scenario.

In the backdrop of the financial crisis in the US and European countries.Keshub Mahindra, who will be attending the meeting, is chairman of automobile major Mahindra and Mahindra and had served on various government committees including the Sachar Commission on Company Law and MRTP and Central Advisory Council of Industries.Veteran banker N Vaghul, who has been associated with the financial sector for long years, is currently chairman of ICICI Bank.ICI India Chairman Ashok Ganguly was chairman of the erstwhile Hindustan Lever and is currently a member of the Investment Commission.Meanwhile, Chief Economic Adviser Arvind Virmani held a meeting with chief financial officers (CFOs) of various companies to take stock of the current credit crunch and work out steps to deal with the problem.

Macquarie Expects To Remain Weak Against Dollar - Nov 06, 2008

The Indian rupee closed 1.9 per cent higher at 47.72 against the US dollar on November 4. During the day, it rose to 47.25-the most in a decade-as the stock markets extended its gains and some FII inflows into India. FIIs were net buyers $188.8 million in equity on November 3. The rupee had closed at 48.58 on Monday. Despite a rally today, Macquarie expects rupee to remain weak against the US dollar in the near term.

Greenback In Early Trade On Heavy Dollar Selling - Nov 06, 2008

The Indian rupee on Nov 5 appreciated to one month high against the greenback in early trade on heavy dollar selling by state-run banks and increased inflows by foreign funds on gains in equity markets. The domestic currency closed at 47.46/50 on Wednesday, 0.5% stronger than 48.69/70 at close on Tuesday. It opened strong at 47.19 and later moved up at 46.70 against the US dollar. The Bombay Stock Exchange benchmark Sensex on Tuesday rose by over 290 points. With this, it has gained over 2,100 points in the last five trading sessions.

October Gold Imports Fall By 27% Against Tones - Nov 06, 2008

Gold imports came down 27% to nearly 44 tones in October against 60 tones registered in the same period last year mainly due to a sharp fall in the value of Indian currency against the dollar. It was down by 45% compared to imports of 64 tones in September. During the month of October the value of rupee depreciated by nearly 9% against the dollar from 47.95 to 52.35. Prices fell from Rs 13,200/ 10 gm to Rs 11,795/10 gm on October 30, a drop of 11%. The annual gold demand in India is about 850 tones; it slid to 727 tones in 2007 due to a sharp rise in prices. Given the economic recession, the demand is expected to fall further in 2008.

Direct Tax Kitty Rose By Nearly The Month Of Stood - Nov 06, 2008

Direct tax kitty rose by nearly 11% in the month of October, 2008 and stood at Rs 19,708 crore, compared to Rs 18,809 crore in the corresponding period of last fiscal. The government had decided to raise the collection in budget from Rs 3,65,000 crore to a little less than Rs 4,00,000 crore and to achieve this initial budget estimate, direct taxes need to grow by nearly 16.07%.

During the period of April-October 2008, tax collections of corporate tax and personal income tax including fringe benefit tax, securities transaction tax and banking cash transaction tax rose by nearly 29.52% to Rs 1,66,905 crore. Corporate tax collections jumped by 32.74% at Rs 1,05,174 crore, while personal income tax up by 17.65 % in the first seven months of the current financial year. Fringe benefit tax grew by 47.43% at Rs 4061 crore in the same period. Due to economic turmoil and slowdown of stock market securities transaction tax collections has witnessed a negative growth of 1.6% at Rs 3724 crore. Banking cash transaction tax grew by 17.73% at Rs 366 crore.

Call Rate Ended Upbeat At 7.75 Pc - Nov 05, 2008

Call rate ended higher on 4th November, on the Overnight call money market on good demand from borrowing banks. The overnight call money rate finished higher at 7.75 per cent as against 7.25 per cent previously after moving in a range of 7.90 per cent and 7.00 per cent. On the other hand, government bond prices traded mixed due to some bouts of both buying and selling.

Cabinet Will Consider Easing FDI In Defense Production - Nov 05, 2008

As a thrust for manufacturing and to lift investor’s confidence, government will consider relaxing rules for foreign direct investment in defense production, Commerce and Industry Minister Kamal Nath said on Nov 4. The Union Cabinet would take up the issue in the near future.

India can become a great manufacturer of defense items and will concentrate more on that, the minister told reporters on the sidelines of a meeting organized by business chambers with visiting Belgian King Albert II. He said the Cabinet would consider options to provide new thrust to the manufacturing sector. In addition, concentration on FDI would also be on the government agenda. At present, 26 per cent of FDI is permitted in the defence sector. Nath said despite troubles in the world economy, India continued to attract FDIs and the target of $35 billion for 2008-09 fiscal would be achieved. In September this year, FDI inflows went up by 259 per cent to $2.56 billion, against $713 million in the same month last year. For April-September period this year, the inflows went up to $17.21 billion from $7.25 billion of the corrosponding period a year ago, showing a rise of 137 per cent.

PSU Banks Agree To Cut PLR, Says FM - Nov 05, 2008

According to the Finance Minister P Chidambaram, all PSU banks have agreed to cut prime Lending Rate by 75 bps. Chidambaram held a meeting with top executives of PSU banks on 4th November 2008, to review liquidity situation and performance of the lenders. He, however, maintained no directive has been given to banks to cut the rates.

He also informed that IBA (Indian Banks Association) has assured to review price of credit to sectors and also banks have been asked to assess additional capital needs. Liquidity has been considerably enhanced on RBI steps. The Finance Secretary and the RBI governor would meet the chiefs of private banks tomorrow. A few public sector banks have already announced their decision to cut rates. Bank of Baroda would reduce lending rates by 75 bps on November 5 while Vijaya Bank may cut lending and deposit rates later this week.

FICCI Is Formulating A Group To Engage With All Regional - Nov 05, 2008

Federation of Indian Chambers of Commerce and Industry (FICCI) is planning to set up a task force to work with the high level committee announced by the Prime Minister Manmohan Singh. The purpose of the committee will be to deal with the current economic crisis. FICCI is formulating a group to engage with all regional and other trade organizations covering SMEs and exporters and interface with the government committee to seamlessly communicate challenges of SMEs. In addition to this, the task force will carry out review all over the country to assess trends in production, sales, exports, and investments and will present the results to the government.

Gold Shed Some Ground As Investors Were Concerned - Nov 04, 2008

Gold prices dropped marginally on the bullion market on Monday as investors channeled their money into the stock market, while the marriage season led the silver prices moved upward. Gold prices fell marginally by Rs 10 to Rs 12,000 per 10 gram and silver rose by Rs 130 to Rs 17,130.

Gold shed some ground as investors were concerned for the quick gains in stock market. An adequate supply position further pulled down prices of the yellow metal. Standard gold and ornaments receded by Rs 10 each at Rs 12,000 and Rs 11,850 per 10 gram, while the sovereign ruled flat at Rs 10,500 per piece of eight gram.

Silver prices spurted on increased buying by the jewellery fabricators to meet the ongoing marriage season demand. Silver ready and weekly-based delivery moved up by Rs 130 and Rs 180 to Rs 17,130 each per kg on efficient buying on the back of a firm global trend. Its coins held steady at Rs 27,000 for buying and Rs 27,100 for selling of 100 pieces.

Govt To Set Up Special Cell To Address Industry - Nov 04, 2008

Government is planning to set up a high-powered committee to ensure the problems faced by the industry, including liquidity crunch and high interest rates, are resolved. Government also want to minimize the impact of the global credit crisis on the Indian economy and job cuts.

Finance Minister P Chidambaram, Commerce and Industry Minister Kamal Nath and Deputy Chairman of Planning Commission Montek Singh Ahluwalia are likely to be on the committee. Pillai said the government would react "positively" to the suggestions made to revive the housing and construction sectors, which were prime drivers of the economy.

For the five month period (April-August 2008-09), the industrial production growth rate stood at 4.9 per cent, down from 10 per cent during the corresponding period last year. Due to the slowdown in major economies, India''s exports growth has also declined to 10.4 per cent in September this year after showing a impressive expansion of over 35 per cent for the April-August period.

PM Appealed India Inc Not To Layoff Staffs - Nov 04, 2008

Prime Minister Manmohan Singh on Monday appealed to top Indian industrialists to not to go for large scale lay-offs which may have negative impact. Due to the current market condition and the impact of the liquidity crunch on Indian industry, the prime minister has set up a special cell to deal with the industry''s grievances, take their suggestions and implement them. The panel will have the finance minister, commerce minister and Planning Commission Deputy Chairman Montek Singh Ahluwalia.

He met Mukesh Ambani, Anand Mahindra, K V Kamath, Sunil Bharti Mittal, Deepak Parikh, Shashi Ruia, K P Singh and Rajkumar Dhoot to discuss the state of economy. The prime minister asked business leaders to remain confident and keep its social obligations in mind and assured them the government will do all it can to protect the growth rate and said top priority currently for his government is to safeguard the Indian financial system.

Global Economic Slowdown Which To Billion Country - Nov 04, 2008

India''s export growth is impacted by the Global economic slowdown, which slowed to 10.4 per cent in September to $13.74 billion. Along with this, the country''s outward shipments had soured 26.9 per cent, in August. Imports in September jumped 43.3 per cent to $24.38 billion mainly due to more costly oil imports.

India To Present Wish List To Meeting Of Industry Leaders - Nov 03, 2008

India Inc will present its wish list at a meeting of industry leaders convened by Prime Minister Manmohan Singh on Monday to discuss the impact of global meltdown and explore options to bolster the economy.Preparing for the meeting, apex industry associations Confederation of Indian Industry (CII) and Federation of Indian. Chambers of Commerce and Industry (FICCI) held the meetings of their core group, including past presidents, to flag the issues that they should take up with the PM.

Ratan Tata, Anand Mahindra, Mukesh Ambani, Anil Ambani, K P Singh, Sunil Bharti Mittal and Deepak Parikh are among those expected to attend the meeting -- two days after RBI decided to inject another Rs 85,000 crore into the financial system by revising downward short-term lending rate and key deposit requirements for banks.

High on the agenda of the chambers is the spurting interest rates and drying up of liquidity for the industry, which recorded a dismal growth of 1.3 per cent in August this year.With the RBI providing Rs 2,65,000 crore in the last onemonth, one of the industry''s main demands has largely been met. However, industry sources feel more was required since the overnight inter-bank lending rates are still quite high.

However, the industry leaders would demand immediate steps by the government at the meeting, that comes a day before the Finance Minister P Chidambaram''s conference with heads of PSU banks where he would ask them to consider softening of interest rates. While the government has given assurances on the safety of Indian banks, high interest rates, which according to CII President K V Kamath have surged to ''high teens'', have particularly impacted sectors like real estate and automobile.

FM Pushes For Lower Lending Latest Policy Package - Nov 03, 2008

Terming as a right signal the RBI''s latest policy package to inject more liquidity in the system, Finance Minister P Chidambaram on Sunday said he will ask the PSU banks to consider lowering lending rates. In an exclusive interview to PTI, the Minister said he would take the issue of interest rate cut "forward" during a meeting with chairpersons of public sector banks in Delhi on November four.

I am happy with the policy package announced by the RBI.When it announced its (peak season) policy on Oct 24, the RBI had promised swift action in case it is necessary to infuse more liquidity.I am happy that the RBI has responded swiftly, he said in his reaction to yesterday''s policy package announced by the central bank.

In a slew of announcements, the RBI had yesterday cut the repo rate (the rate at which it lends to banks and is a signal to banks to reduce their rates) 50 basis to 7.5 per cent and the cash reserve ratio by 100 basis points to 5.5 per cent and the statutory liquidity ratio by 100 basis points to infuse an additional Rs 85,000 crore into the system.The central bank had already injected in October additional liquidity of Rs.1,85,000 crore in the wake of global financial crisis and depression in the US that had spread fears in India of a recession and brought in volatility in the stock markets.

Chidambaram said the RBI''s policy was also a signal to the banks that they should now now consider lowering their interest rates. When I meet the Chairmen of public sector banks on November four I will take this matter forward, Chidambaram said, adding that the RBI''s latest package would greatly benefit the industry and trade, especially the small and medium enterprises.

Foreign Exchange Reserves Slipped By Billion Fall - Nov 03, 2008

The foreign exchange reserves slipped by $15.47 billion - the largest fall in a week - to $258.415 billion for the week ended October 24. In the previous week, the reserves had dropped by $118 million to $273.886 billion. The forex kitty has been falling for the last few months with foreign institutional investors resorting to heavy selling in the equity market and the RBI trying to save the falling rupee.

In October alone, forex reserves have fallen by a total of $33.4 billion. The main reason for the fall in the reserves could be the aggressive selling of dollars by the RBI in the currency market, said Mr Moses Harding, Executive Vice-President, Head-wholesale Banking Group, IndusInd Bank. As per data from the Securities and Exchange Board of India, FIIs sold a total of Rs 2,524.5 crore in equities.

However, according to data from the Bombay Stock Exchange, FIIs were net sellers to the tune of Rs 3,853.42 crore in the same week. The SEBI data pertains to all the activities undertaken by FIIs in Indian securities market, including trades done in secondary market, primary market and activities involved in right/bonus issues, private placement, merger and acquisition etc.

India''s forex reserves had reached its peak of $316.17 billion, during the week ended May 23, 2008.According to the RBI data, for the week under review, foreign currency assets declined by $15.467 billion to touch $249.394 billion. Gold remained unchanged at $8.565 billion. SDRs increased by $5 million to $9 million. The country''s reserve position in the IMF fell by $9 million to $447 million.

Rupee Strengthened To Its Highest In A Week - Nov 03, 2008

Rupee strengthened to its highest in a week on Oct 31 against the greenback on the back of sharp rise in equity markets and expectations of fresh capital inflows after slashing of interest rates by US Federal Reserve. Rupee ended at 49.44/46 per dollar, its strongest since October 22, and 0.5 per cent above Wednesday''s close. The market was shut on Thursday for a local holiday.

In active trade at the Interbank Foreign Exchange (Forex) market, the domestic unit resumed strong at 49.45/47 and moved up further to quote at 49.34/35 a dollar in late morning deals from previous close of 49.67/68. It moved in a range of 49.52 and 49.29 a dollar. According to forex dealers, the rupee got support from sharp rise in Indian benchmark sensex, which was up by 756 points or 8.36 per cent at 1030 hrs.

They also expect fresh inflows from foreign funds after cutting of key interest rates by 50 basis points by the US Federal Reserve. In New York yesterday, the Dow Jones Industrial Average and the Nasdaq Composite Index ended higher while Asian indices were quoting mixed this morning. Lack of any dollar buying by oil refiners and importers also helped the rupee surge. Global crude oil was quoting lower at nearly USD 64 a barrel in Asian trade today.

Call Rates Increase To 13.5pc - Nov 1, 2008

The inter-bank call rates increased on Oct 29, as banks borrowed in the overnight market to meet their funds shortage. Call rates ended considerably higher at 13.5 per cent, as against Oct 27 close of 9.50-9.75 per cent. The Reserve Bank of India''s intervention in the forex market to stabilise the rupee is also drawing out liquidity in the system.

With the liquidity crunch in the markets, banks borrowed close to Rs 56,000 crore from the RBI under the liquidity adjustment facility on Oct 29. In the two-day repo auction under the first LAF, the RBI got and accepted 35 bids for Rs 27,125 crore. There were no reverse repo bids. In the two-day repo auction under the second LAF, the RBI received and accepted 33 bids for Rs 28,970 crore.

RBI Relaxes Forex Derivatives Accounting Norms - Nov 1, 2008

The Reserve Bank on Oct 29 relaxed the accounting guidelines for valuing derivatives, a move that will help the Indian banks with overseas branches to post better financial results. It has now been decided to confine the applicability of the principle of borrower-wise asset classification to only the overdue arising from forward contracts and plain vanilla swap and options", the central bank said, while modifying its earlier notification for off-balance sheet exposures of banks.

Under the borrower-wise classification norms, all other funded facilities given to defaulting clients are required to be shown as non-performing assets (NPAs). Earlier, the RBI had said borrower-wise classification norms would apply to all funded facilities of a client if the receivables representing mark-to-market value of a derivative contract remain unpaid for over 90 days.

With the modification of the earlier circular, the unpaid amount towards foreign exchange derivatives contract entered between April 2007 and June 2008 will have to be parked in a separate account in the same of client. RBI further said that amount overdue for more than 90 days will not make other funded facilities provided to the client as NPA as per the borrower-wise asset classification principle.

Inflation Drops Below 11%, Down To 10.68% - Nov 1, 2008

The annual wholesale price index-based inflation increased 10.68 per cent during the week ended Oct 18, slower than the previous week''s annual rise of 11.07 per cent, the Commerce Ministry said in a statement in New Delhi on Oct 30. Inflation has fell below the 11 per cent mark for the first time since May this year. The official WPI for ''All Commodities'' in the latest reported week fell by 0.2 per cent to 238.3 points, from 238.8 points in the previous week.

On a disaggregated basis, in case of the ''Primary Articles'' group, the annual inflation declined to 10.92 per cent in the latest reported week compared with 11.53 per cent in the previous week. Out of a total of 98 articles, 15 articles showed a decline in the current week. These comprised wheat, arhar, urad, moong, raw cotton, raw rubber, potatoes, groundnut seed, papaya, banana, apples, cashew nuts and corriander.

The fuel and power commodity group fell to 14.09 per cent in the current week compared to 14.49 per cent in the previous week. Manufactured products fell to 9.26 per cent compared to 9.53 per cent. Inflation of 30 essential commodities fell to 7.47 per cent in the latest week, from 7.80 per cent in the previous week.

Gold Rises On Retail Buying For Festivals - Nov 1, 2008

Tracking strong global cues gold prices surged by Rs 560 to close at Rs 12,570 per ten gram on the bullion market here on brisk buying by retail customers for the ongoing festival and marriage season. Standard gold rose by Rs 320 at Rs 12,570 per ten gram while Jewellery, which opened after two day''s break met with a rush of buyers for jewellery, quoted higher by Rs 560 at Rs 12,420 per ten gram. Sovereign gained Rs 100 at Rs 10,500 per piece of eight gram. Marketmen said, the precious metal which had remained in demand during recent festivals was boosted by customers buying jewellery for marriages.

The market also received support as all buying shifted to the national capital following closure of main bullion markets in Mumbai, they added. The bullion prices spiralled after commodity prices posted biggest surge in five decades on speculation reduced borrowing costs in US and China may help spur recovery in raw material demand. Also, the U.S. cutting borrowing rate pushed up the demand for the yellow metal.

In Asia, gold rose 2.1 per cent to 770.93 dollar an ounce and silver by 3.6 cents at 10.23 dollar an ounce. The yellow metal climbed for a third day in Asia as the dollar dropped against the euro, raising appeal of the metal as an alternative investment, after the U.S. Fed cut interest rates to match a half-century low, was a positive factor for gold.