HIGHLIGHTS -Fri Jan 29, 2010
RBI DEPUTY GOVERNOR SUBIR GOKARN SPEAKING TO REPORTERS:
"As far as rate hike goes there is also a signalling angle.
It might have indicated a greater degree of confidence in the
recovery." "Whereas we have been saying recovery is in place ... it is
still uneven. That is really what in our calculations was the
strongest argument against hike of rates." "Possibility of a mid-cycle action always exists, we have
never shut it but it is a matter of circumstances and there
must be a strong justification for acting out of schedule and
typically it is a crisis situation. Between now and April if
there is anything that warrants such an action, only then, but
not in the absence of such a provocation. "It is important to recognize that mid-cycle policy action
is only in response to an unforeseen situation and if it is
foreseen, then it would be a part of our schedule."
FINANCE SECRETARY ASHOK CHAWLA:
"In our assessment, the Reserve Bank has taken a very
balanced view of the situation and rightly acknowledged that
managing the recovery is as important as managing the crisis
was." "The CRR hike of 75 basis points is in our view
appropriate and adequate because it would only impact the
excess liquidity which is in the system." "Beyond that RBI has not taken any other steps on the
policy rates at this stage, which is a clear indication that
they intend to proceed in a very calibrated manner in handling
the recovery process." "So overall, the scenario as it seems is that the growth
process is certainly well on track. It has been handled in our
view appropriately, adequately by the Reserve Bank. This should
be a good signal for trade, industry." "The fact that they have not done it today clearly
indicates that they do not see the need for doing it in
foreseeable future," Chawla said when asked the whether he saw
a rate rise as imminent.
CHIEF ECONOMIC ADVISER KAUSHIK BASU:
"Inflation, which was completely sector-specific food,
there is small stirring of that in other sectors taking place.
To that extent, RBI has reacted correctly." "Inflation is not going to go out of control, but the small
step taken by the RBI is in the right direction to keep the
whole economy's demand more or less under wraps, and also the
expectation this is going to mop up little bit of excess
liquidity from the market."