NEW DELHI:Union Minister of Commerce & Industry Kamal Nath has stated that the infrastructure development is a vital area for India’s economic growth.
During his interaction with Douglas Alexander, Secretary of State for Department of International Development, UK, here last evening, Nath emphasised that there is an excellent opportunity for UK expertise as well as investments In India. “We need to generate interests in the large number of PPP projects being explored in India”, he added. Both sides also discussed about the present global financial crisis and the impact on trade. The meeting was also attended by G.K. Pillai, Commerce Secretary apart from senior officials from both the countries.
Both sides discussed the possibilities for early conclusion of the Doha Round Negotiations of the WTO. Kamal Nath explained that India continues to believe strongly in a rule-based, transparent and fair multilateral trade regime. “One of the factors which will have an important bearing on the conclusion of the Round is whether the developed countries would be willing to show the necessary flexibility for finalizing a multilateral deal. However, India has been engaging constructively and actively with other fellow member countries of the WTO in the expectation that this would be forthcoming. A conclusion would of course depend on whether the WTO members are faithful to the mandate and the final outcome reflects a clear balance between market opening and the development needs of the majority of the membership”, he added.
Both sides agreed that there is a huge potential for bilateral trade and investment in view of shared interests and a long history of relations. It was felt that the potential area for growth in trade and investment are agri-business, healthcare, infrastructure, high-technology, legal services, accountancy services and financial services. Shri Kamal Nath informed the visiting Secretary of State that Indian healthcare industry is keen for tie-ups with the UK health insurance industry for offering healthcare facilities in India.
The cumulative foreign direct investment (FDI) inflows from the UK during 1991-2008 was to the tune of US $ 5.03 billion. The top sectors that attracted FDI from the UK were: telecommunications, fuels (power & oil refining), chemicals (other than fetillisers and services sector (financial & non-financial). The top investment areas by Indians in the UK are: software development services, pharmaceuticals, textiles and handicrafts.
The total bilateral trade between India and the UK during the year 2007-08 was US $ 12 billion (exports - $ 7 billion and imports - $ 5 billion). During 2006-07, the bilateral trade was US $ 9.8 billion (exports - $ 5.6 billion and imports - $ 4.2 billion). The main exports to UK were: readymade garments, petroleum, machinery & instruments, gems & jewellery, footwear etc. The main imports from the UK were: precious & semi-precious stones, electronic goods, silver, transport equipments, metalifers ores and metal scrap etc.
The present Indo-UK Joint Working Groups is in the sectors of hi-tech, IPR (intellectual property rights), accountancy, legal services, infrastructure, healthcare, financial services and company affairs. The 5th Meeting of the Indo-UK JETCO (Joint Economic and Trade Committee) is scheduled to be held in New Delhi on a date to be decided mutually.
Tuesday, November 18, 2008
Monday, November 17, 2008
Dont't run away from India, Kamal Nath tells investors
NEW DELHI: Union Commerce Minister Kamal Nath today said that world would benefit tremendously from a stable, large and growing consumer market provided by India and added that this is not the time for foreign investors to give up on India.
"Foreign investors who withdraw equity investments or shelve FDI plans in India will find themselves behind the curve as our economy picks up its 9-10% pace once again," he said addressing the Plenary Session on “Securing Opportunities for Inclusive Growth in India” at the India Economic Summit here.
Kamal Nath pointed out that India’s reform process has allowed millions of poor people to cross the poverty threshold and added that there is still a lot of room for further reforms in key areas such as public private partnerships, financial sector, and taxation, among others. He said that much action remains on the agenda table for integrating further with the global economy and becoming a vital link in the international supply chain of goods and services, funds and capital, and resources and talent.
The 3-day (16-18 November) Summit is being jointly organized by the Confederation of Indian Industry (CII) and World Economic Forum.
Kamal Nath emphasised that inclusive growth ultimately depends on the productivity of the overall workforce, which in turn is dependent on its education, skill development, technical and professional education, and talent resource levels. India’s workforce numbers around 500 million people and is expected to expand by about 20 million each year for the next ten years. “But 600 million people continue to depend on agriculture as a source of livelihood. While agriculture has been expanding at close to 3% annually, there is need to move people off the land in order to enhance their productivity and increase their incomes”, he added.
Speaking about India’s engagement with the world, he said that India’s total exports in 2004-05 was at $ 83.5 billion, whereas in 2007-08, it exceeded the targets and achieved a doubling of trade to $163 billion and this year, for the period April to September export growth was 31% over the same period last year. At the same time, we continue to be a solid market for overseas goods, he underlined and added that India’s imports have gone up from $ 112 billion in 2004-05 to $ 251 billion in 2007-08 and non-oil imports increased at a rapid clip of 43%. “When we include export and import of services, our external engagement can be placed at over $ 525 billion for the past year, which adds up to more than half of GDP. This is unprecedented in India’s modern economic history”, he said
"Foreign investors who withdraw equity investments or shelve FDI plans in India will find themselves behind the curve as our economy picks up its 9-10% pace once again," he said addressing the Plenary Session on “Securing Opportunities for Inclusive Growth in India” at the India Economic Summit here.
Kamal Nath pointed out that India’s reform process has allowed millions of poor people to cross the poverty threshold and added that there is still a lot of room for further reforms in key areas such as public private partnerships, financial sector, and taxation, among others. He said that much action remains on the agenda table for integrating further with the global economy and becoming a vital link in the international supply chain of goods and services, funds and capital, and resources and talent.
The 3-day (16-18 November) Summit is being jointly organized by the Confederation of Indian Industry (CII) and World Economic Forum.
Kamal Nath emphasised that inclusive growth ultimately depends on the productivity of the overall workforce, which in turn is dependent on its education, skill development, technical and professional education, and talent resource levels. India’s workforce numbers around 500 million people and is expected to expand by about 20 million each year for the next ten years. “But 600 million people continue to depend on agriculture as a source of livelihood. While agriculture has been expanding at close to 3% annually, there is need to move people off the land in order to enhance their productivity and increase their incomes”, he added.
Speaking about India’s engagement with the world, he said that India’s total exports in 2004-05 was at $ 83.5 billion, whereas in 2007-08, it exceeded the targets and achieved a doubling of trade to $163 billion and this year, for the period April to September export growth was 31% over the same period last year. At the same time, we continue to be a solid market for overseas goods, he underlined and added that India’s imports have gone up from $ 112 billion in 2004-05 to $ 251 billion in 2007-08 and non-oil imports increased at a rapid clip of 43%. “When we include export and import of services, our external engagement can be placed at over $ 525 billion for the past year, which adds up to more than half of GDP. This is unprecedented in India’s modern economic history”, he said
Saturday, November 15, 2008
Indian Railways to pump in $62 billion for development
by Harish Kunwar(Assistant Director, Press Information Bureau, New Delhi)
Over the decade, private sector participation in the railway sector has increased, though it remains limited. The public-private partnership (PPP) model is becoming increasingly popular in order to mobilize capital and improve operation and management skills. In the past, IR made several attempts to involve the private sector through works or management contracts in areas such as catering wagon ownership and leasing, and joint ventures (JVs) for rail infrastructure projects. As a result, several initiatives were taken up on a PPP basis. These included commercial utilization of railway land, private operation of container trains, catering services, warehouses and wagon procurement. A number of PPP projects are also on the anvil. These include construction of dedicated freight corridors, modernization of railway stations, manufacture of rolling stock, utilization of vacant railway land, development of railside warehouses, construction of passenger terminals and development of VSAT hubs.
It has been assessed that Indian Railways would need to spend around Rs. 2,51000 crore (US$62 billion) on various capacity enhancement measures over the next five year period. A major part of the investment would come from internally generated resources. Budgetary support to the extent feasible would also come forth. However, to meet the massive investment needed, these would need to be leveraged to mobilize adequate level extra budgetary resources. Around Rs. 1,00,000 crore is expected to come from extra budgetary resources including Public Private Partnership (PPP). PPP would, thus, play a crucial role in the attainment of the strategic goals outlined above.
Construction of DFC
It has been planned to construct a new Dedicated Freight Corridor (DFC), initially covering about 2700 route kms. equivalent to around 5000 track kilometers at an approximate cost of Rs. 28000 crore (US$6 billion) linking the ports of western India and the ports and mines of Eastern India to Delhi and Punjab. The construction of this corridor will be implemented through an SPV being created for the purpose through a mix of Engineering Procurement and Construction (EPC) and PPP methods. Ministry of Railways is in the process of selecting a global consultant to advise on the concession agreement, principles of track access charges and other financing and bidding issues. It is envisaged that innovative ideas on design, construction and maintenance of railway to achieve optimal life – cycle costs would be forthcoming through PPP especially as the work progresses on the initial two corridors and further corridors are taken up. The concessionaire could also tap additional ancillary revenue streams through commercial exploitation of and, construction of freight terminal/logistic park/ICDs etc.
World Class Railway Stations
Railway stations at metropolitan cities and important tourist centres need to be modernized to provide world-class passenger amenities and services to the large multitude of passengers using these stations. Indian Railways is planning to do so by attracting private investments in the area by leveraging the land around and airspace above the stations. The concessionaire would be expected to construct and maintain the operational and passenger areas free of cost, share the revenue earned from the real-estate created and hand over the same after the concession period. Altogether 26 stations have been identified in the first stage. These are CST Mumbai (Carnac Bunder), Pune, Howrah (Kolkata), Lucknow, New Delhi, Anand Vihar and Bijwasan at Delhi, Amritsar, Chandigarh, Varanasi, Chennai, Thiruvananthapuram, Secunderabad, Ahmedabad, Patna, Bhubaneshwar, Mathura, Agra, Gaya, Bangalore, Jaipur, Nagpur, Tirupati, Bhopal, Kanpur and Guwahati. Pre-qualification process for bidders for the pilot project for New Delhi Station has been initiated. Redevelopment of Patna, Secunderabad and Mumbai will also be taken up during the current year. Development of other stations and green field passenger terminals would also be taken up subsequently.
Commercial Utilization of Land
Indian Railways has approximately 43,000 hectares of vacant land. These are mostly alongside track in longitudinal strips, around railway stations, and in railway colonies especially in metro and other important cities/towns with potential of being used commercially to generate revenue as well as capital for modernization and capacity addition. A new body, namely Rail Land Development Authority (RLDA) has been set up under the Railway (Amendment) Act 2005 to pursue, interalia, the main objectives of generating revenue and up grading railway assets. 110 sites have already been entrusted to RLDA.
SPV for manufacturing
With sustained economic growth and the resultant demand for rail transport the requirement of rolling stock has increased manifold. The requirement of coaches/Electrical Multiple Units is projected at 22689 vehicle unit for the XI Five Year Plan The gap between the requirement and the combined capacity of the two Production Units at Integral Coach Factory, Perambur and Rail Coach Factory, Kapurthala (around 2500 per annum) is planned to be bridged by augmenting the existing capacity of these Production Units and setting up a new manufacturing unit through a JV under PPP.
Similarly, the requirement of Electric and Diesel Locomotives has been projected at 1800 each during the XI Five Year Plan i.e. 360 locos per year. The existing in – house capacity for the manufacture of these locomotives is presently 150 per annum for Electric and for Diesel. The gap between the requirement and capacity is also planned to be bridged by setting up two locomotive manufacturing units one each for diesel and electric locomotives through PPP. Possibility of PPP through long-term demand guarantee to prospective manufactures of modern wagons is also being explored.
High Speed Corridors
Pre-feasibility studies are being awarded for a few identified corridors to examine. Linking a few of our bustling metropolises with a high speed rail links to facilitate train travel over 600-1000 km within 2.5 to 4 hours. All options including PPP will be explored.
Operation of container trains and construction of Multi-modal Logistics Parks
Private operators have been allowed to manage rail-borne Container Services on Indian Railways. Concession agreement setting out the terms of such operation has been signed with 15 private operators. The scheme is also open for other operators to join. So far private operators have inducted 45 rakes and built three ICDs at Garihassru, Patli and Loni.
Policy framework to facilitate setting up of Multi-modal Logistics Parks (MLPs) in SEZs or private land with rail connectivity has been formulated. The policy also evisages utilization or surplus railway land available at suitable locations for development of MLPs and/or bulk or dedicated freight terminals.
Wagon investment Scheme
The Wagon Investment Scheme (WIS) with provisions for freight rebate and supply of guaranteed number of rakes over periods ranging from 7-15 years for various categories of wagons has been in operation for the past few years. The scheme is being replaced by a new scheme to broaden its appeal to investors providing high-capacity and special purpose wagons. A scheme to facilitate third-party leasing of wagons is also under finalization.
Port Connectivity works
Rail Vikas Nigam Limited (RVNL) has been mandated to undertake capacity augmentation works and port connectivity projects by establishing Special Purpose Vehicles (SPVs) Some of the projects taken up or under consideration of RVNL include Palanpur-Gandhidham gauge conversion project (linking Kandla and Mundhra ports to North India), Haridaspur-Paradeep New Line (linking iron ore mines of Orissa and Jharkhand to Pradeep port), Anugul-Sukinda (linking iron-ore and coal-belts of Orissa), Obulavaripalli-Krishnapatnam – New Line Project linking the Krishnapatnam port of Andhra Pradesh, Bharuch-Dahej and Surt-Hazira projects in the State of Gujarat and Penn-Rewas Port link (Maharashtra)
Catering etc.,
Indian Railway Catering and Tourism Corporation (IRCTC) has been mandated to develop catering services, budget hotels and food plazas at major stations through involvement of private entrepreneurs.
IRCTC is commissioning new Food Plazas in Railway premises with private participation. The license period for food plazas is of nine years with a provision of extension of three years. Already 53 such Food Plazas have been commissioned.
Indian Railways is also in the process of carrying out an examination of the scope of need-based ‘base kitchens’ and ‘launderettes’ with public private partnership to strengthen the infrastructure for on-board services. Call centers are also being planned under PPP by IRCTC to cater to the need for information dissemination to the railway customers.
Apart from the above projects, for which Indian Railway Catering and Tourism Corporation (IRCTC) would act as a nodal agency, Indian Railway is also planning to launch new services for the luxury tourism segment on the pattern of ‘Palace on Wheel’ in partnership with interested State Governments. (PIB Features)
Over the decade, private sector participation in the railway sector has increased, though it remains limited. The public-private partnership (PPP) model is becoming increasingly popular in order to mobilize capital and improve operation and management skills. In the past, IR made several attempts to involve the private sector through works or management contracts in areas such as catering wagon ownership and leasing, and joint ventures (JVs) for rail infrastructure projects. As a result, several initiatives were taken up on a PPP basis. These included commercial utilization of railway land, private operation of container trains, catering services, warehouses and wagon procurement. A number of PPP projects are also on the anvil. These include construction of dedicated freight corridors, modernization of railway stations, manufacture of rolling stock, utilization of vacant railway land, development of railside warehouses, construction of passenger terminals and development of VSAT hubs.
It has been assessed that Indian Railways would need to spend around Rs. 2,51000 crore (US$62 billion) on various capacity enhancement measures over the next five year period. A major part of the investment would come from internally generated resources. Budgetary support to the extent feasible would also come forth. However, to meet the massive investment needed, these would need to be leveraged to mobilize adequate level extra budgetary resources. Around Rs. 1,00,000 crore is expected to come from extra budgetary resources including Public Private Partnership (PPP). PPP would, thus, play a crucial role in the attainment of the strategic goals outlined above.
Construction of DFC
It has been planned to construct a new Dedicated Freight Corridor (DFC), initially covering about 2700 route kms. equivalent to around 5000 track kilometers at an approximate cost of Rs. 28000 crore (US$6 billion) linking the ports of western India and the ports and mines of Eastern India to Delhi and Punjab. The construction of this corridor will be implemented through an SPV being created for the purpose through a mix of Engineering Procurement and Construction (EPC) and PPP methods. Ministry of Railways is in the process of selecting a global consultant to advise on the concession agreement, principles of track access charges and other financing and bidding issues. It is envisaged that innovative ideas on design, construction and maintenance of railway to achieve optimal life – cycle costs would be forthcoming through PPP especially as the work progresses on the initial two corridors and further corridors are taken up. The concessionaire could also tap additional ancillary revenue streams through commercial exploitation of and, construction of freight terminal/logistic park/ICDs etc.
World Class Railway Stations
Railway stations at metropolitan cities and important tourist centres need to be modernized to provide world-class passenger amenities and services to the large multitude of passengers using these stations. Indian Railways is planning to do so by attracting private investments in the area by leveraging the land around and airspace above the stations. The concessionaire would be expected to construct and maintain the operational and passenger areas free of cost, share the revenue earned from the real-estate created and hand over the same after the concession period. Altogether 26 stations have been identified in the first stage. These are CST Mumbai (Carnac Bunder), Pune, Howrah (Kolkata), Lucknow, New Delhi, Anand Vihar and Bijwasan at Delhi, Amritsar, Chandigarh, Varanasi, Chennai, Thiruvananthapuram, Secunderabad, Ahmedabad, Patna, Bhubaneshwar, Mathura, Agra, Gaya, Bangalore, Jaipur, Nagpur, Tirupati, Bhopal, Kanpur and Guwahati. Pre-qualification process for bidders for the pilot project for New Delhi Station has been initiated. Redevelopment of Patna, Secunderabad and Mumbai will also be taken up during the current year. Development of other stations and green field passenger terminals would also be taken up subsequently.
Commercial Utilization of Land
Indian Railways has approximately 43,000 hectares of vacant land. These are mostly alongside track in longitudinal strips, around railway stations, and in railway colonies especially in metro and other important cities/towns with potential of being used commercially to generate revenue as well as capital for modernization and capacity addition. A new body, namely Rail Land Development Authority (RLDA) has been set up under the Railway (Amendment) Act 2005 to pursue, interalia, the main objectives of generating revenue and up grading railway assets. 110 sites have already been entrusted to RLDA.
SPV for manufacturing
With sustained economic growth and the resultant demand for rail transport the requirement of rolling stock has increased manifold. The requirement of coaches/Electrical Multiple Units is projected at 22689 vehicle unit for the XI Five Year Plan The gap between the requirement and the combined capacity of the two Production Units at Integral Coach Factory, Perambur and Rail Coach Factory, Kapurthala (around 2500 per annum) is planned to be bridged by augmenting the existing capacity of these Production Units and setting up a new manufacturing unit through a JV under PPP.
Similarly, the requirement of Electric and Diesel Locomotives has been projected at 1800 each during the XI Five Year Plan i.e. 360 locos per year. The existing in – house capacity for the manufacture of these locomotives is presently 150 per annum for Electric and for Diesel. The gap between the requirement and capacity is also planned to be bridged by setting up two locomotive manufacturing units one each for diesel and electric locomotives through PPP. Possibility of PPP through long-term demand guarantee to prospective manufactures of modern wagons is also being explored.
High Speed Corridors
Pre-feasibility studies are being awarded for a few identified corridors to examine. Linking a few of our bustling metropolises with a high speed rail links to facilitate train travel over 600-1000 km within 2.5 to 4 hours. All options including PPP will be explored.
Operation of container trains and construction of Multi-modal Logistics Parks
Private operators have been allowed to manage rail-borne Container Services on Indian Railways. Concession agreement setting out the terms of such operation has been signed with 15 private operators. The scheme is also open for other operators to join. So far private operators have inducted 45 rakes and built three ICDs at Garihassru, Patli and Loni.
Policy framework to facilitate setting up of Multi-modal Logistics Parks (MLPs) in SEZs or private land with rail connectivity has been formulated. The policy also evisages utilization or surplus railway land available at suitable locations for development of MLPs and/or bulk or dedicated freight terminals.
Wagon investment Scheme
The Wagon Investment Scheme (WIS) with provisions for freight rebate and supply of guaranteed number of rakes over periods ranging from 7-15 years for various categories of wagons has been in operation for the past few years. The scheme is being replaced by a new scheme to broaden its appeal to investors providing high-capacity and special purpose wagons. A scheme to facilitate third-party leasing of wagons is also under finalization.
Port Connectivity works
Rail Vikas Nigam Limited (RVNL) has been mandated to undertake capacity augmentation works and port connectivity projects by establishing Special Purpose Vehicles (SPVs) Some of the projects taken up or under consideration of RVNL include Palanpur-Gandhidham gauge conversion project (linking Kandla and Mundhra ports to North India), Haridaspur-Paradeep New Line (linking iron ore mines of Orissa and Jharkhand to Pradeep port), Anugul-Sukinda (linking iron-ore and coal-belts of Orissa), Obulavaripalli-Krishnapatnam – New Line Project linking the Krishnapatnam port of Andhra Pradesh, Bharuch-Dahej and Surt-Hazira projects in the State of Gujarat and Penn-Rewas Port link (Maharashtra)
Catering etc.,
Indian Railway Catering and Tourism Corporation (IRCTC) has been mandated to develop catering services, budget hotels and food plazas at major stations through involvement of private entrepreneurs.
IRCTC is commissioning new Food Plazas in Railway premises with private participation. The license period for food plazas is of nine years with a provision of extension of three years. Already 53 such Food Plazas have been commissioned.
Indian Railways is also in the process of carrying out an examination of the scope of need-based ‘base kitchens’ and ‘launderettes’ with public private partnership to strengthen the infrastructure for on-board services. Call centers are also being planned under PPP by IRCTC to cater to the need for information dissemination to the railway customers.
Apart from the above projects, for which Indian Railway Catering and Tourism Corporation (IRCTC) would act as a nodal agency, Indian Railway is also planning to launch new services for the luxury tourism segment on the pattern of ‘Palace on Wheel’ in partnership with interested State Governments. (PIB Features)
Wednesday, November 12, 2008
Hi Manmohan, this is Obama calling....
NEW DELHI: President-elect of the United States Mr. Barack Obama called the Prime Minister this morning. The Prime Minister congratulated him warmly and said that his historic victory was a source of inspiration for oppressed people all over the world.
President-elect Obama praised the Prime Minister’s contribution to the progress of India both as Minister of Finance earlier and now as Prime Minister. He said that the US-India strategic relationship was a very important partnership and that the new administration wanted to work together with India on all important global issues.
The Prime Minister said that relations between India and the United States were very good but that we could not be satisfied with the status quo. The Prime Minister conveyed his best wishes for the success of the new administration in meeting the enormous challenges that face the world and invited the President-elect and Mrs. Obama to visit India . He said that a warm welcome awaited them. The President-elect said that he wished to make an early visit to India
President-elect Obama praised the Prime Minister’s contribution to the progress of India both as Minister of Finance earlier and now as Prime Minister. He said that the US-India strategic relationship was a very important partnership and that the new administration wanted to work together with India on all important global issues.
The Prime Minister said that relations between India and the United States were very good but that we could not be satisfied with the status quo. The Prime Minister conveyed his best wishes for the success of the new administration in meeting the enormous challenges that face the world and invited the President-elect and Mrs. Obama to visit India . He said that a warm welcome awaited them. The President-elect said that he wished to make an early visit to India
Sunday, November 9, 2008
Indian Economy can overcome global crisis
by S. Sethuraman**
India has taken an array of monetary and fiscal measures, in quick succession, to contain inflationary pressures - with the annual rate already moderating from around 13 per cent in August to 10.72 per cent by the end of October - and, more importantly, to make available adequate domestic resources to maintain growth in the face of an unprecedented international financial crisis and global economy drifting into recession.
The Reserve Bank had, within four weeks in October, lowered reserve ratios and reduced a key interest rate to provide some 250,000 crores of liquidity for banks to finance businesses and consumers. These measures, welcomed by the industry and other productive sectors, have helped to impart a sense of confidence about India‘s ability to weather the global storm.
Growth Momentum:Prime Minister Dr Manmohan Singh remains focussed on seeing that the Indian economy does not get unduly affected by the adverse developments abroad. He has appealed to the industry and the country in general to turn the crisis in the world economy into an opportunity to ensure that India comes out of the global crisis with its fundamentals unimpaired, protecting employment.
What gives confidence and strength to the Indian economy is its sound financial sector with its well-regulated and well-capitalised banking system, the sustained growth in deposit accretion and credit flows, and assured safety for depositors, the global competitiveness of its manufacturing and services, high savings and investment rates and a comfortable level of foreign exchange reserves which could be drawn to make up for any shortfalls in capital inflows.
The Finance Minister Shri P Chidambaram has urged banks to lower interest rates, in the light of the steps taken by RBI both on liquidity and interest rate, and several public sector banks have already announced plans on reducing their prime lending rates. Banks have been asked to increase credit for productive purposes and ensure credit quality. RBI has also suggested to banks to restructure the dues of small and medium enterprises on merits.
There is general expectation that inflation would continue to moderate - especially now that global prices of oil (though still volatile) and commodities have sharply declined from their high levels in the first half of 2008 - and RBI projects that the annual rate of inflation would be down to 7 per cent by March 2009. India can well maintain growth at not less than 7 to 7.5 per cent, as the Prime Minister pointed out, despite some adverse impact on trade and capital flows which all countries have begun to experience in these uncertain times. Even at 7.5 per cent, India will remain the second fastest growing economy.
Given the unsettled conditions in global markets, the Prime Minister has set up an high-powered group chaired by him to closely monitor the evolving macro-economic situation so that growth momentum is sustained at reasonable rates. A committee of senior officials would keep a day-to-day track of trends.
Monetary & Fiscal Measures: The Reserve Bank of India had vigorously moved in October to bring down the cash reserve ratio from a peak of 9 per cent to 5.5 per cent, reduce the key policy interest rate (repo) from 9 to 7.5 per cent and also the statutory liquidity ratio by one percentage point to 24 per cent of their net demand and time liabilities. These were all designed to inject massive doses of liquidity to the banking system which in any case has been recording a higher credit growth in the current year. Nevertheless, when there was some liquidity constraint experienced by money markets and the foreign exchange market also coming under demand pressures, RBI had to intervene with remedial measures.
As part of measures to minimise the adverse impact of global crisis on domestic economy, the Finance Minister has reduced certain duties to give relief to some of the affected sectors like steel and aviation. On the budgetary side, higher allocations for social sectors and rural employment and other flagship programmes should generate consumption which contributes to economy’s growth. Most corporates including in the I T sector and banks have managed to maintain profitability, though somewhat lower than expected, in the second quarter (July-September), and the recent government measures on liquidity and interest rates should help to sustain business confidence.
Monetary policy has moved away from continued tightening, in the days of inflation climbing during 2008, to a significant easing of curbs with the steady moderation in the annual rate of inflation after peaking at 12.65 per cent in August. It had since been coming down over recent weeks and stood at 10.72 per cent in the week ended October 25. While the fall in inflation rate has been facilitated by the sharp drop in global prices of oil, food and other commodities as well as domestic supply management, the oil market remains volatile. Taking crop prospects and other domestic factors into account, RBI continues its monetary policy stance of maintaining growth with price stability as well as orderly conditions in financial markets.
Macro-Economic Management: India has to summon all its abilities at macro-economic management because of the extraordinary global situation in which there is weakening of global demand and likely interruption in external capital flows. So far, there have been only ripple effects on the economy and exports in the first half of the fiscal year (April-September) have recorded a robust 35 per cent growth. But oil imports at higher prices have pushed up the import bill and trade deficit is widening. There was some ‘knock-on’ on financial markets but there is no longer any sign of liquidity tightening with the measures taken.
Many developing and leading emerging economies including China and Korea have come under strain and some of the poorer countries face risks of economic disruption because of fiscal and balance of payments difficulties. China’s growth, largely export-led hitherto, has also slowed down and it is reorienting its policies to promote greater domestic consumption with the weakening of external demand especially from USA and Europe due to recessionary conditions there. India’s exports can be maintained without loss of momentum in the latter half of the year with greater focus on products and growth markets, especially with the exchange rate which has depreciated in relation to the dollar.
While there has been an outflow of foreign portfolio investments of the order of 10 billion dollars, India continues to attract foreign direct investment which totalled an impressive 17.66 billion dollars in the first six months, April to September, compared to 7.25 billion in the corresponding period of last year. There has been some draw down on our reserves to meet imports and other payments. With its sound management and continued liberalisation, India continues to be an attractive investment destination, especially if investors have to seek avenues away from the recession-hit developed nations. (PIB Features)
*Freelance Journalist
Disclaimer : The views expressed by the author in this feature are entirely his own and do not necessarily reflect the views of PIB.
India has taken an array of monetary and fiscal measures, in quick succession, to contain inflationary pressures - with the annual rate already moderating from around 13 per cent in August to 10.72 per cent by the end of October - and, more importantly, to make available adequate domestic resources to maintain growth in the face of an unprecedented international financial crisis and global economy drifting into recession.
The Reserve Bank had, within four weeks in October, lowered reserve ratios and reduced a key interest rate to provide some 250,000 crores of liquidity for banks to finance businesses and consumers. These measures, welcomed by the industry and other productive sectors, have helped to impart a sense of confidence about India‘s ability to weather the global storm.
Growth Momentum:Prime Minister Dr Manmohan Singh remains focussed on seeing that the Indian economy does not get unduly affected by the adverse developments abroad. He has appealed to the industry and the country in general to turn the crisis in the world economy into an opportunity to ensure that India comes out of the global crisis with its fundamentals unimpaired, protecting employment.
What gives confidence and strength to the Indian economy is its sound financial sector with its well-regulated and well-capitalised banking system, the sustained growth in deposit accretion and credit flows, and assured safety for depositors, the global competitiveness of its manufacturing and services, high savings and investment rates and a comfortable level of foreign exchange reserves which could be drawn to make up for any shortfalls in capital inflows.
The Finance Minister Shri P Chidambaram has urged banks to lower interest rates, in the light of the steps taken by RBI both on liquidity and interest rate, and several public sector banks have already announced plans on reducing their prime lending rates. Banks have been asked to increase credit for productive purposes and ensure credit quality. RBI has also suggested to banks to restructure the dues of small and medium enterprises on merits.
There is general expectation that inflation would continue to moderate - especially now that global prices of oil (though still volatile) and commodities have sharply declined from their high levels in the first half of 2008 - and RBI projects that the annual rate of inflation would be down to 7 per cent by March 2009. India can well maintain growth at not less than 7 to 7.5 per cent, as the Prime Minister pointed out, despite some adverse impact on trade and capital flows which all countries have begun to experience in these uncertain times. Even at 7.5 per cent, India will remain the second fastest growing economy.
Given the unsettled conditions in global markets, the Prime Minister has set up an high-powered group chaired by him to closely monitor the evolving macro-economic situation so that growth momentum is sustained at reasonable rates. A committee of senior officials would keep a day-to-day track of trends.
Monetary & Fiscal Measures: The Reserve Bank of India had vigorously moved in October to bring down the cash reserve ratio from a peak of 9 per cent to 5.5 per cent, reduce the key policy interest rate (repo) from 9 to 7.5 per cent and also the statutory liquidity ratio by one percentage point to 24 per cent of their net demand and time liabilities. These were all designed to inject massive doses of liquidity to the banking system which in any case has been recording a higher credit growth in the current year. Nevertheless, when there was some liquidity constraint experienced by money markets and the foreign exchange market also coming under demand pressures, RBI had to intervene with remedial measures.
As part of measures to minimise the adverse impact of global crisis on domestic economy, the Finance Minister has reduced certain duties to give relief to some of the affected sectors like steel and aviation. On the budgetary side, higher allocations for social sectors and rural employment and other flagship programmes should generate consumption which contributes to economy’s growth. Most corporates including in the I T sector and banks have managed to maintain profitability, though somewhat lower than expected, in the second quarter (July-September), and the recent government measures on liquidity and interest rates should help to sustain business confidence.
Monetary policy has moved away from continued tightening, in the days of inflation climbing during 2008, to a significant easing of curbs with the steady moderation in the annual rate of inflation after peaking at 12.65 per cent in August. It had since been coming down over recent weeks and stood at 10.72 per cent in the week ended October 25. While the fall in inflation rate has been facilitated by the sharp drop in global prices of oil, food and other commodities as well as domestic supply management, the oil market remains volatile. Taking crop prospects and other domestic factors into account, RBI continues its monetary policy stance of maintaining growth with price stability as well as orderly conditions in financial markets.
Macro-Economic Management: India has to summon all its abilities at macro-economic management because of the extraordinary global situation in which there is weakening of global demand and likely interruption in external capital flows. So far, there have been only ripple effects on the economy and exports in the first half of the fiscal year (April-September) have recorded a robust 35 per cent growth. But oil imports at higher prices have pushed up the import bill and trade deficit is widening. There was some ‘knock-on’ on financial markets but there is no longer any sign of liquidity tightening with the measures taken.
Many developing and leading emerging economies including China and Korea have come under strain and some of the poorer countries face risks of economic disruption because of fiscal and balance of payments difficulties. China’s growth, largely export-led hitherto, has also slowed down and it is reorienting its policies to promote greater domestic consumption with the weakening of external demand especially from USA and Europe due to recessionary conditions there. India’s exports can be maintained without loss of momentum in the latter half of the year with greater focus on products and growth markets, especially with the exchange rate which has depreciated in relation to the dollar.
While there has been an outflow of foreign portfolio investments of the order of 10 billion dollars, India continues to attract foreign direct investment which totalled an impressive 17.66 billion dollars in the first six months, April to September, compared to 7.25 billion in the corresponding period of last year. There has been some draw down on our reserves to meet imports and other payments. With its sound management and continued liberalisation, India continues to be an attractive investment destination, especially if investors have to seek avenues away from the recession-hit developed nations. (PIB Features)
*Freelance Journalist
Disclaimer : The views expressed by the author in this feature are entirely his own and do not necessarily reflect the views of PIB.
Friday, November 7, 2008
Rajnikant Patel joins Reliance Money
MUMBAI: Reliance Money, part of the Reliance Anil Dhirubhai Ambani Group, has announced that Mr. Rajnikant Patel has joined the company as President – Exchange Business.
“We are very pleased with the induction of Mr. Patel in Reliance Money. We are sure that with his extensive experience of over 28 years in the financial market arena, Mr. Patel will play a critical role in our foray into the exchange space covering commodities and currencies. We are looking at both domestic and international opportunities at present,” said Mr. Sudip Bandyopadhyay, Director and CEO, Reliance Money.
Prior to joining Reliance Money, Mr. Patel was the Managing Director & CEO, Bombay Stock Exchange, where he was responsible for the corporatization and demutualization of BSE, making it a billion dollar institution.
An accomplished banker, Mr. Patel has also had a long stint with the banking regulator, Reserve Bank of India, besides being a part of MNC and PSU banks such as BNP Paribas, State Bank of Saurashtra and Bank of Maharashtra.
“I am very happy to be associated with Reliance Money, particularly for the vision, the scale and the speed of implementation. I believe there is a huge scope for an innovative, professional and committed approach in commodities, currency futures and related exchange space. I am very excited at the future possibility of value creation for all stakeholders in the financial system,” said Mr. Patel.
Mr. Patel was the longest serving Chairman of South Asian Federation of Exchanges (SAFE). He was also a member of the Working Committee of the World Federation of Exchanges (WFE). Mr. Patel has also been a part of various committees of SEBI, CII and others.
About Reliance Money
www.reliancemoney.com
Reliance Money, a part of the Reliance Anil Dhirubhai Ambani Group is a comprehensive financial services and solution provider, providing customers with access to Equity, Equity and Commodity Derivatives, Portfolio Management Services, Wealth Management Services, Mutual Funds, IPOs, Life and General Insurance and Gold Coins. Customers can also avail Loans, Credit Card, Money Transfer and Money Changing services.
The largest broking house in India with 2.7 million customers and a wide network of over 10,000 outlets and 20,000 touch points in 5,000+ locations. Reliance Money endeavors to change the way investors transact in financial markets and avails financial services. The average daily volume on the stock exchanges is Rs. 4,000 crores, representing approximately 4% of the total stock exchange volume.
Reliance Capital is one of India's leading and fastest growing private sector financial services companies, and ranks among the top 3 private sector financial services and banking groups, in terms of net worth.
For details contact –
Mumbai Delhi
Tamanna Khanna Sanjiv Kumar
tamanna.khanna@relianceada.com sanjiv.k.sinha@relianceada.com
+91-9323609510 +91-9312456677
Concept Communications
B. N. Kumar
mailbnk@gmail.com
+91-9321048332
“We are very pleased with the induction of Mr. Patel in Reliance Money. We are sure that with his extensive experience of over 28 years in the financial market arena, Mr. Patel will play a critical role in our foray into the exchange space covering commodities and currencies. We are looking at both domestic and international opportunities at present,” said Mr. Sudip Bandyopadhyay, Director and CEO, Reliance Money.
Prior to joining Reliance Money, Mr. Patel was the Managing Director & CEO, Bombay Stock Exchange, where he was responsible for the corporatization and demutualization of BSE, making it a billion dollar institution.
An accomplished banker, Mr. Patel has also had a long stint with the banking regulator, Reserve Bank of India, besides being a part of MNC and PSU banks such as BNP Paribas, State Bank of Saurashtra and Bank of Maharashtra.
“I am very happy to be associated with Reliance Money, particularly for the vision, the scale and the speed of implementation. I believe there is a huge scope for an innovative, professional and committed approach in commodities, currency futures and related exchange space. I am very excited at the future possibility of value creation for all stakeholders in the financial system,” said Mr. Patel.
Mr. Patel was the longest serving Chairman of South Asian Federation of Exchanges (SAFE). He was also a member of the Working Committee of the World Federation of Exchanges (WFE). Mr. Patel has also been a part of various committees of SEBI, CII and others.
About Reliance Money
www.reliancemoney.com
Reliance Money, a part of the Reliance Anil Dhirubhai Ambani Group is a comprehensive financial services and solution provider, providing customers with access to Equity, Equity and Commodity Derivatives, Portfolio Management Services, Wealth Management Services, Mutual Funds, IPOs, Life and General Insurance and Gold Coins. Customers can also avail Loans, Credit Card, Money Transfer and Money Changing services.
The largest broking house in India with 2.7 million customers and a wide network of over 10,000 outlets and 20,000 touch points in 5,000+ locations. Reliance Money endeavors to change the way investors transact in financial markets and avails financial services. The average daily volume on the stock exchanges is Rs. 4,000 crores, representing approximately 4% of the total stock exchange volume.
Reliance Capital is one of India's leading and fastest growing private sector financial services companies, and ranks among the top 3 private sector financial services and banking groups, in terms of net worth.
For details contact –
Mumbai Delhi
Tamanna Khanna Sanjiv Kumar
tamanna.khanna@relianceada.com sanjiv.k.sinha@relianceada.com
+91-9323609510 +91-9312456677
Concept Communications
B. N. Kumar
mailbnk@gmail.com
+91-9321048332
Saturday, November 1, 2008
Repo rate cut, RBI warns of global recession trends
MUMBAI: Announcing, further measures for Monetary and Liquidity Management, the Reserve Bank of India (RBI) today cut repo rate by 50 basis points. With this new repo rate stands at 7.5 per cent.
In its Mid-Term Review of the Annual Policy Statement for 2008-09, the Reserve Bank of India indicated that in the context of the uncertain and unsettled global situation and its indirect impact on our domestic economy and our financial markets, it would closely and continuously monitor the situation and respond swiftly and effectively to developments. In doing so, the Reserve Bank will employ both conventional and unconventional measures.
RBI noted that global financial conditions continue to remain uncertain and unsettled, and early signs of a global recession are becoming evident. These developments are being reflected in sharp declines in stock markets across the world and heightened volatility in currency movements. International money markets are yet to regain calm and confidence and return to normal functioning.
It was also indicated in the Mid-Term Review that the current challenge for the conduct of monetary policy is to strike an optimal balance between preserving financial stability, maintaining price stability and sustaining the growth momentum. Inflation, in terms of the wholesale price index (WPI), has been softening steadily since August 9, 2008 and has declined to 10.68 per cent for the week ended October 18, 2008.
Globally, pressures from commodity prices, including crude, appear to be abating. The moderation in key global commodity prices, if sustained, would further reduce inflationary pressures. On the growth front, it is important to ensure that credit requirements for productive purposes are adequately met so as to support the growth momentum of the economy, RBI said.
Domestic financial markets have been functioning normally. Prudent regulatory surveillance and effective supervision have ensured that our financial sector has been and continues to be robust. However, the global financial turmoil has had knock-on effects on our financial markets; this has reinforced the importance of focusing on preserving financial stability,
The Reserve Bank has reviewed the current and evolving macroeconomic situation and liquidity conditions in the global and domestic financial markets. Based on this review, it has decided to take the following further measures:
(i) On October 20, 2008, the Reserve Bank announced a reduction in the repo rate under the Liquidity Adjustment Facility (LAF) by 100 basis points from 9.0 to 8.0 per cent. In view of the ebbing of upside inflation risks as also to address concerns relating to the moderation in the growth momentum, it has been decided to reduce the repo rate under the LAF by 50 basis points to 7.5 per cent with effect from November 3, 2008.
(ii) The cash reserve ratio (CRR) of scheduled banks is reduced by 100 basis points from 6.5 per cent to 5.5 per cent of net demand and time liabilities (NDTL). This will be effected in two stages: by 50 basis points retrospectively with effect from the fortnight beginning October 25, and by a further 50 basis points prospectively with effect from the fortnight beginning November 8, 2008. This measure is expected to release around Rs.40,000 crore into the system.
(iii) On September 16, 2008, the Reserve Bank had announced, as a temporary and ad hoc measure, that scheduled banks could avail additional liquidity support under the LAF to the extent of up to one per cent of their NDTL and seek waiver of penal interest. It has now been decided to make this reduction permanent. Accordingly, the Statutory Liquidity Ratio (SLR) will stand reduced to 24 per cent of NDTL with effect from the fortnight beginning November 8, 2008.
(iv) In order to provide further comfort on liquidity and to impart flexibility in liquidity management to banks, it has been decided to introduce a special refinance facility under Section 17(3B) of the Reserve bank of India Act, 1934. Under this facility, all scheduled commercial banks (excluding RRBs) will be provided refinance from the Reserve Bank equivalent to up to 1.0 per cent of each bank's NDTL as on October 24, 2008 at the LAF repo rate up to a maximum period of 90 days. During this period, refinance can be flexibly drawn and repaid.
(v) On October 15, 2008 the Reserve Bank announced, purely as a temporary measure, that banks may avail of additional liquidity support exclusively for the purpose of meeting the liquidity requirements of mutual funds (MFs) to the extent of up to 0.5 per cent of their NDTL. A similar facility of liquidity support for non-banking financial companies (NBFCs) is also found to be necessary to enable them to manage their funding requirements. Accordingly, it has now been decided, on a purely temporary and ad hoc basis, subject to review, to extend this facility and allow banks to avail liquidity support under the LAF through relaxation in the maintenance of SLR to the extent of up to 1.5 per cent of their NDTL. This relaxation in SLR is to be used exclusively for the purpose of meeting the funding requirements of NBFCs and MFs. Banks can apportion the total accommodation allowed above between MFs and NBFCs flexibly as per their business needs.
(vi) As indicated in the Reserve Bank's press release of September 16, 2008, as on some previous occasions, the Reserve Bank will continue to sell foreign exchange (US dollar) through agent banks to augment supply in the domestic foreign exchange market or intervene directly to meet any demand-supply gaps. The Reserve Bank would either sell the foreign exchange directly or advise the bank concerned to buy it in the market. All the transactions by the Reserve Bank will be at the prevailing market rates and as per market practice. Entities with bulk forex requirements can approach the Reserve Bank through their banks for this purpose.
(vii) It has been decided, as a temporary measure, to permit Systemically Important Non-Deposit taking Non-Banking Financial Companies (NBFCs-ND-SI) to raise short- term foreign currency borrowings under the approval route, subject to their complying with the prudential norms on capital adequacy and exposure norms. Details in this regard have been notified separately and are available on the Reserve Bank's web site.
(viii) Under the Market Stabilisation Scheme (MSS), Government Securities (treasury bills and dated securities) have been issued to sterilise the expansionary effects of forex inflows. In the context of forex outflows in the recent period, it has been decided to conduct buy-back of MSS dated securities so as to provide another avenue for injecting liquidity of a more durable nature into the system. This will be calibrated with the market borrowing programme of the Government of India. The securities proposed to be bought back and the timing and modalities of these operations are being notified separately.
The Reserve Bank will continue to closely monitor the developments in the global and domestic financial markets and will take swift and effective action as appropriate, an official communiqué said.
In its Mid-Term Review of the Annual Policy Statement for 2008-09, the Reserve Bank of India indicated that in the context of the uncertain and unsettled global situation and its indirect impact on our domestic economy and our financial markets, it would closely and continuously monitor the situation and respond swiftly and effectively to developments. In doing so, the Reserve Bank will employ both conventional and unconventional measures.
RBI noted that global financial conditions continue to remain uncertain and unsettled, and early signs of a global recession are becoming evident. These developments are being reflected in sharp declines in stock markets across the world and heightened volatility in currency movements. International money markets are yet to regain calm and confidence and return to normal functioning.
It was also indicated in the Mid-Term Review that the current challenge for the conduct of monetary policy is to strike an optimal balance between preserving financial stability, maintaining price stability and sustaining the growth momentum. Inflation, in terms of the wholesale price index (WPI), has been softening steadily since August 9, 2008 and has declined to 10.68 per cent for the week ended October 18, 2008.
Globally, pressures from commodity prices, including crude, appear to be abating. The moderation in key global commodity prices, if sustained, would further reduce inflationary pressures. On the growth front, it is important to ensure that credit requirements for productive purposes are adequately met so as to support the growth momentum of the economy, RBI said.
Domestic financial markets have been functioning normally. Prudent regulatory surveillance and effective supervision have ensured that our financial sector has been and continues to be robust. However, the global financial turmoil has had knock-on effects on our financial markets; this has reinforced the importance of focusing on preserving financial stability,
The Reserve Bank has reviewed the current and evolving macroeconomic situation and liquidity conditions in the global and domestic financial markets. Based on this review, it has decided to take the following further measures:
(i) On October 20, 2008, the Reserve Bank announced a reduction in the repo rate under the Liquidity Adjustment Facility (LAF) by 100 basis points from 9.0 to 8.0 per cent. In view of the ebbing of upside inflation risks as also to address concerns relating to the moderation in the growth momentum, it has been decided to reduce the repo rate under the LAF by 50 basis points to 7.5 per cent with effect from November 3, 2008.
(ii) The cash reserve ratio (CRR) of scheduled banks is reduced by 100 basis points from 6.5 per cent to 5.5 per cent of net demand and time liabilities (NDTL). This will be effected in two stages: by 50 basis points retrospectively with effect from the fortnight beginning October 25, and by a further 50 basis points prospectively with effect from the fortnight beginning November 8, 2008. This measure is expected to release around Rs.40,000 crore into the system.
(iii) On September 16, 2008, the Reserve Bank had announced, as a temporary and ad hoc measure, that scheduled banks could avail additional liquidity support under the LAF to the extent of up to one per cent of their NDTL and seek waiver of penal interest. It has now been decided to make this reduction permanent. Accordingly, the Statutory Liquidity Ratio (SLR) will stand reduced to 24 per cent of NDTL with effect from the fortnight beginning November 8, 2008.
(iv) In order to provide further comfort on liquidity and to impart flexibility in liquidity management to banks, it has been decided to introduce a special refinance facility under Section 17(3B) of the Reserve bank of India Act, 1934. Under this facility, all scheduled commercial banks (excluding RRBs) will be provided refinance from the Reserve Bank equivalent to up to 1.0 per cent of each bank's NDTL as on October 24, 2008 at the LAF repo rate up to a maximum period of 90 days. During this period, refinance can be flexibly drawn and repaid.
(v) On October 15, 2008 the Reserve Bank announced, purely as a temporary measure, that banks may avail of additional liquidity support exclusively for the purpose of meeting the liquidity requirements of mutual funds (MFs) to the extent of up to 0.5 per cent of their NDTL. A similar facility of liquidity support for non-banking financial companies (NBFCs) is also found to be necessary to enable them to manage their funding requirements. Accordingly, it has now been decided, on a purely temporary and ad hoc basis, subject to review, to extend this facility and allow banks to avail liquidity support under the LAF through relaxation in the maintenance of SLR to the extent of up to 1.5 per cent of their NDTL. This relaxation in SLR is to be used exclusively for the purpose of meeting the funding requirements of NBFCs and MFs. Banks can apportion the total accommodation allowed above between MFs and NBFCs flexibly as per their business needs.
(vi) As indicated in the Reserve Bank's press release of September 16, 2008, as on some previous occasions, the Reserve Bank will continue to sell foreign exchange (US dollar) through agent banks to augment supply in the domestic foreign exchange market or intervene directly to meet any demand-supply gaps. The Reserve Bank would either sell the foreign exchange directly or advise the bank concerned to buy it in the market. All the transactions by the Reserve Bank will be at the prevailing market rates and as per market practice. Entities with bulk forex requirements can approach the Reserve Bank through their banks for this purpose.
(vii) It has been decided, as a temporary measure, to permit Systemically Important Non-Deposit taking Non-Banking Financial Companies (NBFCs-ND-SI) to raise short- term foreign currency borrowings under the approval route, subject to their complying with the prudential norms on capital adequacy and exposure norms. Details in this regard have been notified separately and are available on the Reserve Bank's web site.
(viii) Under the Market Stabilisation Scheme (MSS), Government Securities (treasury bills and dated securities) have been issued to sterilise the expansionary effects of forex inflows. In the context of forex outflows in the recent period, it has been decided to conduct buy-back of MSS dated securities so as to provide another avenue for injecting liquidity of a more durable nature into the system. This will be calibrated with the market borrowing programme of the Government of India. The securities proposed to be bought back and the timing and modalities of these operations are being notified separately.
The Reserve Bank will continue to closely monitor the developments in the global and domestic financial markets and will take swift and effective action as appropriate, an official communiqué said.
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