Monday, November 1, 2010

Macroeconomic and Monetary Developments --RBI Second Quarter Review

RBI in its 2nd quarter review is more concerned about the inflation  and the capital inflows coming into EME which might lead to currency appreciation and asset price bubbles. Also talks about Current account deficit and Capital Account surplus and going forward how its going to be. One can get a Good understanding of Economics by reading this Report
The output growth of the Indian economy has started to consolidate around the trend
after a sharp recovery and the headline inflation also shows signs of peaking off. Going
forward, various forward looking surveys conducted in the recent period suggest strong
y-o-y growth. The Industrial Outlook Survey of the Reserve Bank also points to
continuation of the growth momentum. The professional forecasters’ survey of the Reserve
Bank registered a marginal upward revision in the GDP growth rate for 2010-11, on the
back of higher growth forecasts for agriculture and services sector. The overall outlook
suggests that notwithstanding some recent moderation in headline inflation, the level of
inflation remains above the comfort level. The Reserve Bank’s policy stance is likely to
be shaped by dual goals of maintaining the growth momentum in an atmosphere of
global uncertainty, while striving to moderate inflation further
Will the Reserve Bank of India (RBI) raise policy rates for the sixth consecutive time this year to tame inflation? Wait for Tomorrow...looks like they are bit uncomfortable in controlling inflation

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