New RBI chief Raghuram Rajan promises bold reforms, quick action
NDTV | Updated On: September 04, 2013 18:42 (IST)
Raghuram Rajan, the new governor of Reserve Bank of India, on Wednesday
said India's economy was "fundamentally sound" and had a "bright future"
in his first remarks after taking the helm at the central bank earlier
in the day.
Highlighting his top priorities, Dr Rajan said "protecting the value of
money is an important objective" and "low and stable levels of
inflation crucial" remains crucial. He said he will formulate policies
that will lead to "faster, broad based inclusive growth leading to fall
in poverty".
Dr Rajan also stressed on the importance of effective communication, something for which the previous governor D Subbarao had come under firm.
"The RBI should be a beacon of stability... the public should have a clear idea of the central bank... key to all this is communication," Dr Rajan said.
Dr Rajan also outlined several measures to support the Indian rupee. The central bank will allow importers to rebook 25 per cent of cancelled forward contracts, Dr Rajan said.
The Reserve Bank of India would allow the introduction of cash settled 10-year interest rate future contracts, he added.
Dr Rajan said the government would look to reduce investments by banks in government bonds "in a calibrated manner". He added the RBI would work together with the government and the market regulator to steadily liberalise markets.
The RBI will offer a swap window to banks for fresh dollar deposits mobilised from non-resident Indians, which will be available to lenders till November 30, 2013, Dr Rajan said.
The central bank will offer the swap for dollar funds mobilised for three years and above at a fixed rate of 3.5 per cent per annum at a concessional rate of 100 basis points below the market rate, he said.
A major part of Dr Rajan's speech was also focused on shoring up investors' confidence, which will undoubtedly boost market sentiments. The RBI will push for more settlement in rupees for which India will have to open its markets further.
(With inputs from Reuters)
Dr Rajan also stressed on the importance of effective communication, something for which the previous governor D Subbarao had come under firm.
"The RBI should be a beacon of stability... the public should have a clear idea of the central bank... key to all this is communication," Dr Rajan said.
Dr Rajan also outlined several measures to support the Indian rupee. The central bank will allow importers to rebook 25 per cent of cancelled forward contracts, Dr Rajan said.
The Reserve Bank of India would allow the introduction of cash settled 10-year interest rate future contracts, he added.
Dr Rajan said the government would look to reduce investments by banks in government bonds "in a calibrated manner". He added the RBI would work together with the government and the market regulator to steadily liberalise markets.
The RBI will offer a swap window to banks for fresh dollar deposits mobilised from non-resident Indians, which will be available to lenders till November 30, 2013, Dr Rajan said.
The central bank will offer the swap for dollar funds mobilised for three years and above at a fixed rate of 3.5 per cent per annum at a concessional rate of 100 basis points below the market rate, he said.
A major part of Dr Rajan's speech was also focused on shoring up investors' confidence, which will undoubtedly boost market sentiments. The RBI will push for more settlement in rupees for which India will have to open its markets further.
(With inputs from Reuters)
