A+| A| A-

Downward Sticky Lending Rates

The markets are quick to raise interest rates and curtail lending during the tightening phase of monetary policy, but their reactions are lukewarm in an easing phase. This asymmetric behaviour leads to the conclusion that monetary policy is effective only during the tightening phase. A review of the policy interventions between September 2004 and 2008 provides some support to this view, but the results seem to be mixed when we consider the responses from the rate and quantity channels of monetary transmission. The transmission of monetary policy through both the rate and quantity channels was weak during the easing phase; the rate channel has been stronger during the tightening phase. But the quantity channel may overshoot and contradict the macroeconomic objectives if the tightening phase is accompanied by capital inflows.

MONEY MARKET REVIEW

significant monetary easing after Septem-

Downward Sticky Lending Rates

ber 2008 in response to an easing of inflationary pressures, but more to provide a boost to the growth process engendered EPW Research Foundation by the global financial and economic crisis.

The markets are quick to raise interest rates and curtail lending during the tightening phase of monetary policy, but their reactions are lukewarm in an easing phase. This asymmetric behaviour leads to the conclusion that monetary policy is effective only during the tightening phase. A review of the policy interventions between September 2004 and 2008 provides some support to this view, but the results seem to be mixed when we consider the responses from the rate and quantity channels of monetary transmission. The transmission of monetary policy through both the rate and quantity channels was weak during the easing phase; the rate channel has been stronger during the tightening phase. But the quantity channel may overshoot and contradict the macroeconomic objectives if the tightening phase is accompanied by capital inflows.

Team led by K Kanagasabapathy and supported by V P Prasanth, Rema K Nair, Anita B Shetty, Bipin K Deokar, Shruti J Pandey and Sharan P Shetty.

Economic & Political Weekly

EPW
june 20, 2009

G
iven the need to revive the economy, policy transmission through both the interest rate and credit channels gains a lot of significance. The entire gamut of issues relating to the interest rate channel therefore needs to be addressed at the broader policy level.

Monetary policy operates in two directions – tightening and easing – counteracting the pressures of the economic cycle, so that economic activity is sustained over a period with a moderate or tolerable inflation rate. One important change introduced in the operating framework of monetary policy in India since the mid1990s has been the gradual switchover to the use of indirect instruments of policy for interventions, rather than direct instruments. This tendency is evident in the use of interest-based instruments such as the repo and reverse repo rates, to influence the term-structure of interest rates in the market, replacing the earlier administered interest rate regime. For quantitative liquidity adjustments also, the instruments have become marketbased, such as the liquidity adjustment facility (LAF), open market operations (OMO) and Market Stabilisation Scheme (MSS), instead of the Cash Reserve Ratio (CRR) and the Statutory Liquidity Ratio (SLR) along with a host of refinance facilities – though in the recent period, some revival of these instruments is seen. In the case of direct instruments, the transmission of policy intentions is mostly by mandates and directives, whereas in the case of indirect instruments the transmission mechanism hinges on the reactive behaviour of the market which can become elusive, at times belying the expectations of the policymakers.

The Reserve Bank of India (RBI) shifted its policy stance from a significant monetary tightening in response to the elevated inflationary pressures and the perceived overheating of the economy in the first half of 2008-09 to a sudden, swift and

vol XLIV No 25

The annual policy for 2009-10 states that “while the response to policy changes by the RBI has been faster in the money and government securities markets, there has been concern that the large and quick changes effected in the policy rates by the RBI have not fully transmitted to banks’ lending rates”. Even when inflation is taken as 4.0-4.5% based on the underlying trend, real lending rates would still appear to be high. The policy statement urges the banks to strive to reduce their lending rates further. A stark reality that this experience brings out is that the markets are quick to raise interest rates and perhaps also curtail lending during the tightening phase of monetary policy, but their reactions are lukewarm in an easing phase, belying the policy intentions to bring down lending rates and expand credit to provide a boost to the falling economy. A quick documentation and analysis of monetary and banking trends, since the tightening phase started sometime in September 2004 and ended in September 2008 and during post-September 2008 when monetary easing commenced, provide some support to this view, but the results seem to be mixed when we consider the responses from the operation of the rate channel and the quantity channel of monetary transmission.

1 Policy Rate Revisions and Responses

Let us see first the policy rate revisions and the corresponding responses from the banking system during the tightening phase. Between September 2004 and March 2008, the reverse repo rate and the repo rate were, respectively, raised in all by 150 bps and 175 bps. The market responses to these changes by way of higher deposit and lending rates were rather more than proportionate signifying an elasticity of more than one. The deposit rates at their minimum (of five major banks) went up by 325 bps and at the maximum level by a higher 350 bps whereas

MONEY MARKET REVIEW

(28 March 2008 to 22 May 2009)

% 31 – 29 – 27 – 25 – 23 – 21 – 19 – 17 –

C-D ratio

  • 76
  • 75
  • 74
  • 73
  • 72
  • 71
  • 70
  • 69
  • 68
  • 67
  • 66
  • Graph A: Major Fortnightly and Banking Indicators since Fortnight Ending

    Credit deposits ratio Non-food credit Aggregate deposits M3 growth year on year

    15 –

    – 65

    28/3 26/9 10/10 24/10 7/11 21/11 5/12 19/12 2/1 16/1 30/1 13/2 27/2 13/3 27/3 10/4 24/4 8/5 22/5

    the Prime Lending Rates (PLRs) went up by 200 bps each. The tightening phase got further intensified during the first half of 2008-09 when the threshold inflation rate peaked to more than 12%, along with a feeling that India was by and large decoupled from the advanced international markets and hence the impact of the global financial crisis on India remained muted. The reverse repo rate was hiked by another 125 bps. This period also saw some quick responses from the banking system: the deposit rates at minimum and maximum levels went up, respectively, by another 50 bps and 100 bps, and the respective PLRs at minimum and maximum levels by 150 bps and 125 bps, again pointing to an elasticity of more than one (this is significant because earlier empirical evidence covering the period September 1998-March 2004 is reported to have suggested that the interest rate passthrough from changes in the policy rate was 0.61 for lending and 0.42 for deposit rates). The tightening phase also resulted in a general hardening of government securities market interest rates. In the absence of an active and vibrant corporate bond market, that channel however remains rather muted as compared with bank lending rates in influencing the real economic activity (Table 1 and Graph A).

    Coming to the easing phase, during the post-September 2008 period thus far, the reverse repo rate and the repo rate were cut respectively by 275 bps and 425 bps. One would have expected that the monetary conditions would have eased substantially and that should have resulted in a proportionate lowering of deposit and lending rates. These rates have no doubt come down, but not to the extent of an easing in policy rates and the level of expectations from the government and the central bank. Much of these revisions could be attributed to strong persuasion from both the government and the central bank. The deposit rates at the minimum and maximum levels have come down by only 225

    and 175 bps respectively, whereas the corresponding lending rates have shown declines by 275 and 175 bps – all pointing however crudely measured to an elasticity of significantly less than unity. The conclusion from the operation of the rate channel is very clear: the transmission was effective during the tightening phase and weaker during the easing phase.

    This period also saw a surge in capital inflows and introduction of measures to absorb the excess liquidity caused by sterilisation. The CRR was also raised by 300 bps up to 2007-08 and there was a further hike by 150 bps before September 2008. All these measures did not see any moderation in growth of monetary and banking aggregates. Thus, money supply grew by more than 20%, aggregate deposits by 22-24%, and non-food credit in the range of as much as 22 and more than 30%. These trends made the authorities conclude that there was overheating of the economy. Thus, overall, while the rate channel seemed to have worked well during the tightening phase, the quantity channel went rather out of control, contributed no doubt to a significant extent by external factors as well.

    In the post-September 2008 phase, the quantity easing of policy saw very unconventional steps. Apart from the cut in CRR by 400 bps, a slew of steps were taken to augment the potential liquidity in the

    Looking at the quantum channel, the policy tightening should have normally resulted in a moderation in growth rates of aggregate deposits, money supply and non-food credit. It may be recalled in this context that the tightening phase of monetary policy since mid-2004-05 also coincided with the expansionary phase of real economic activity over about four years ending 2007-08 and the actual growth rates in aggregate deposits, money supply (M3), and nonfood credit went up to very high levels, much off the mark of indicative projections, since the real economic growth rates were also much higher than anticipated in policy.

    Table 1: Policy Rates and Deposit and Lending Rates (Change in Percentage Points)

    During Period Deposit Rates Prime Lending Reverse Repo Rate CRR Rates Repo Rate Minimum Maximum Minimum Maximum

    1 2004-05 0.25 0.75 0.00 -0.25 0.25 0.00 0.50

    2 2005-06 0.75 0.75 0.00 0.00 1.00 0.50 0.00

    3 2006-07 1.50 2.00 2.00 1.75 0.25 1.00 1.00

    4 2007-08 0.75 0.00 0.00 0.25 0.00 0.25 1.50

    (1- 4) 3.25 3.50 2.00 1.75 1.50 1.75 3.00

    5 Pre-September 2008-09 0.50 1.00 1.50 1.25 0.00 1.25 1.50

    (1-5) 3.75 4.45 3.50 3.00 1.50 3.00 4.50

    6 Post-September -2.25 -1.75 -2.75 -1.75 -2.75 -4.25 -4.00 (up to 22 May 2009)

    Source: Data compiled by EPWRF, sourcing RBI’s Weekly Statistical Supplement (WSS).

    Table 2: Weighted Averages of Daily Call/Notice Rates in Per Cent Per Annum: Simple Statistical Characteristics

    Month/Week Simple Standard Coefficient of Simple Standard Coefficient of Mean * Deviation Variation Mean * Deviation Variation (in %)$ (in %)$

    Call Money Notice Money ** April 2009 All four weeks 3.22 1.16 36.16 2.24 1.77 79.24

    24(RF)* 3.08 0.50 16.11 1.93 1.52 78.76

    17 3.24 0.61 18.94 2.08 1.90 91.34

    10^ 2.72 0.91 33.36 2.41 1.67 69.41

    3^ 3.77 2.12 56.08 2.62 2.44 93.04

    May 2009 All five weeks 3.11 0.19 6.09 2.62 0.48 18.39

  • 29 3.17 0.13 4.19 2.40 0.47 19.52
  • 22(RF)* 3.09 0.24 7.77 2.54 0.51 19.98
  • 15 3.08 0.27 8.90 2.78 0.61 21.76
  • 8(RF)* 3.10 0.10 3.14 2.80 0.44 15.57

    1^ 3.09 0.27 8.60 2.79 0.69 24.84

    ** Separate reportings began on 15 March 2005. * Including data for reporting Fridays (RF). $ Based on original unrounded figures. ^ Data for 2, 9 and 29 April. Source: RBI.

    june 20, 2009 vol XLIV No 25

    MONEY MARKET REVIEW

    Graph B: Trends in Weighted Averages of Call Rates, Repo Rates and CBLO In sum, the transmis-

    Rates – May 2009
    3.5 – Call Rates

    3–

    2.5 –

    2–

    1.5 –

    1–

    0.5 –

    0–

    system to a mind-blowing level by Rs 4.23 lakh crore as an insurance against any adverse impact of the crisis in the system. However, this period saw a consistent deceleration in growth of monetary aggregates and other related indicators as revealed by the fortnightly trends: the credit-deposit ratio, after touching a peak of 75.2% on 10 October 2008, has gone down consistently to touch 68.9% on 22 May 2009. While the growth rates in money supply and aggregate deposits have been somewhat maintained, the annual growth in non-food credit decelerated to a low of 16.1% on 22 May 2009 against the target of 20% for 2009-10, from the peak of 29.3% reached on 10 October 2008. With the exception of refinance facilities to certain financial institutions like the National Housing Board, Small Industries Development Bank of India (SIDBI) and EXIM Bank, the utilisation of liquidity support mechanisms has remained very low, at about 8% of the potential amount made available. A considerable amount of more than Rs 1.2 lakh crore is being absorbed by the RBI in its LAF window, nullifying to a great extent the impact of the earlier cut in CRR.

    Table 3: Money Market Operations (RBI’s Daily Data)

    Repo Rates – Outside the RBI CBLO Rates

    25/4 27/4 29/4 1/5 3/5 5/5 7/5 9/5 11/5 13/5 15/5 17/5 19/5 21/5 23/5 25/5 27/5 29/5

    sion of monetary policy through both the rate and quantity channels was weak during the easing phase; the rate channel has been stronger during the tightening phase, but the quantity channel may overshoot and contradict the macro-economic objectives if the tightening phase is accompanied by

    capital inflows.

    There could be several reasons why the lending rates are faster to adjust during policy tightening than during policy easing. Essentially, it pays for banks to increase the lending rates even without adjustments in their deposit rates. During an easing phase, it may prove to be difficult to adjust lending rates downward when the deposit rates do not change much. The longer term deposit rates are difficult to reduce swiftly. There is also the fear of flight of deposits, making the deposit rates somewhat sticky downward, particularly because of the prevalence of administered contractual savings rates like those on provident funds and small savings instruments. It has generally been observed that banks are keen to maintain interest rate margins intact, and this again makes quick downward adjustments difficult. There could also be the fear of poor financial results leading to market valuation losses in the stock market.

    In the current context of the dire need for reviving the economy to attain a growth trajectory of 8-9% per annum, policy transmission through interest rate and credit channels gains a lot of significance. While the setting up of the working group on resolving the conflicting issues that have surfaced in the operations of the benchmark prime lending rate (BPLR) under the chairmanship of Deepak Mohanty of the RBI is no doubt a timely step, it is felt that the entire gamut of issues relating to interest rate channel needs to be addressed at the broader policy level.

    Prior to the prominence gained by reverse repo and repo rates, the bank rate was the instrument that was activated in the late 1990s and because of the link of the Bank Rate with several term finance facilities, it had some impact. One issue that needs to be probed is whether the Bank Rate, which is a short-term rate and not an overnight rate should be restored as an RBI lending rate for “normal” term finance facilities subject to prudential limits.

    Secondly, the LAF mechanism through reverse repo and repo rates at present operates as a “passive” mechanism for injection and absorption of liquidity and with a very wide “corridor”. This is being supplemented by OMO and CRR for liquidity management. Can better leverage and discretion be gained by fixing a single target for overnight money, like the US Fed Funds rate, and the RBI operates through OMO dealings directly on a real time basis, in repos, reverse repos, treasury bills and government securities so as to maintain the integrity of the overnight interest rate target within an informal corridor without any pre-commitment? When the Bank Rate is restored and with term-finance available for reasonable amounts, the rate itself would set an upper corridor for the

    Average May 2009 Average April 2009

    Items for Five Weeks 29 22(RF) 15 8(RF) 1$ for Four Weeks 24(RF) 17 10(RF)$ 3(RF)$

    Noofworking days 26 6 6 5 6 3 20 6 5 4 5

    Call Money

    Weighted average of call rates: 2.59-3.24 2.90-3.24 2.60-3.21 2.59-3.22 2.99-3.23 2.78-3.24 1.87-4.98 2.17-3.48 2.14-3.54 1.87-3.56 4.56-4.98 per cent (weekly range) per annum (2.60) (3.15) (2.88) (2.00)

    Daily averages (Rupees crore) 9,052 7,754 8,644 8,625 1,1116 9,046 7,430 9,545 8,412 5,994 5,060 Total call market borrowings (50) (12,591) (21) (13)

    Notice Money

    Weighted average of notice money rates: 2.09-3.28 2.10-3.23 2.25-3.13 2.09-3.21 2.30-3.10 2.30-3.28 2.40-5.03 2.40-3.24 3.36-3.55 2.56-3.59 3.70-5.03 per cent (weekly range) per annum (3.13) (3.10) (3.24) (3.50)

    Daily averages (Rupees crore) 2,078 2,128 1,049 2,756 164 6,734 2,817 2,245 2,294 3,395 3,562 Total notice market borrowings (6,292) (772) (13,096) (13,030)

    Turnover in term money market 131 45 125 107 150 319 96 139 75 64 91 (borrowings) $$ (25) (50) (75) (50)

    Data for reporting Fridays are given within brackets and they are also included in the weekly range/daily averages. $ Data for 2, 9 and 29 April. RF Reporting Fridays . $$ No of reporting/traded days are fewer than given above.

    Economic & Political Weekly

    EPW
    june 20, 2009 vol XLIV No 25

    MONEY MARKET REVIEW

    Graph C: Spot Quotations for the US Dollar in the Domestic Inter-Bank Market

    51 49 47 45 43 41 39

    (Daily)
    Working
    Days May
    (Monthly Averages) 2009
    (Jan 2001 to April 2009)

    overnight money market. The Bank Rate could be set ideally at a fixed spread of about 100 to 200 bps over the overnight target rate. This will introduce some RBI activism in the short-term money market, somewhat more akin to its operations in the foreign exchange market.

    2 Money, Gilt-Edged and Forex Markets

    There were several factors at work during the month of May influencing market expectations and the behaviour in different segments. The uncertainties about the formation of the new government and possible policy directions caused some wait and watch situation in the first half of the month. While the slightly better than expected growth projection for 2008-09 brought some cheer, the trends in industrial production and the trade prospects continued to be dim. One favourable influence was the continued easy liquidity conditions thanks to highly accommodative policies of the central bank combined with expenditure flows from the government and stubbornly slower growth in bank credit.

    The formation of the new government and a series of announcements by the government giving some clear mediumterm policy directions returned the much needed confidence to the market agents and stable expectations about the economic future. The immediate impact was felt in the stock market, which rose phenomenally over a short period since mid-May thanks to resumption of FII investment flows with some vigour. April, which saw only an inflow of $ 1.3 billion, followed up with May flow of as high as $ 4.14 billion, which represented almost the entire net inflow for the year 2009. The conventional link between the stock market, FII flows and foreign exchange market was reestablished with the rupee showing considerable appreciation after mid-May. The

    reserves which depleted Graph D: Annualised Forward Premia in Percentage for the US Dollar in the Domestic Inter-Bank Market and Weighted Averages of Call Rates for May 2009

    by about $57.8 billion in 2008-09, got augmented 4–

    3.5 –

    by about $9 billion so far during 2009-10. 3–

    Even while the confi-2.5 – dence returned to the 2– financial markets in gen-1.5 – eral, the G-sec market was 1– considerably influenced 0.5 –

    6 month 1 month Call Rates (Right axis)

    0

    – 2.80

    by the prospects of yet

    27/4 30/4 3/5

    another year of very large borrowing by the government during 2009-10. Despite assurances from the central bank about OMO support, gilt yields came under pressure late May. The gilt market development henceforth would crucially depend upon the prospects of credit demand picking up with the possible revival of economic activity.

    The RBI’s LAF operations reflected lack of absorption of liquidity releases from the central bank, with the reverse repo operations amounting to Rs 1.2 lakh crore or above for most of the days in the month. RBI announced discontinuance of second LAF auctions (except on reporting Fridays), effective 6 May 2009. Despite RBI’s OMO injection to the extent of about Rs 17,000 crore during the month, overall, the system faced a huge liquidity absorption in G-sec issues net of redemption, of the order of about Rs 57,000 crore and outflow due to increase in net foreign assets of about Rs 22,000 crore (for five weeks ending Fridays from 29 April to 29 May 2009).

    2.1 Money Market

    The daily average volume in call money market increased from Rs 7,490 crore in April to Rs 9,050 crore in May, but the weighted average call rate marginally came down to 3.11 % from 3.22%. The standard deviation

    Weighted Averages of 3.30

  • 3.25
  • 3.20
  • 3.15
  • 3.10
  • 3.05
  • 3.00
  • 2.95
  • 2.90
  • 2.85
  • 6/5 9/5 12/5 15/5 18/5 21/5 24/5 27/5

    and coefficient of variation of notice money rates also showed marked decline in May reflecting stable conditions. In the CBLO segment, the volumes showed considerable pick-up in the later part of May, increasing from Rs 37,174 crore for week ending 29 April to Rs 53,858 crore for week ending 29 May 2009 (Table 4). The overnight CBLO rates softened as in the case of call from 2.84% as at the last week of April to 2.64% as at the last week of May. The CBLO rates moved in tandem with the market repo rates, outside the RBI (Graph B, p 27). The repo volumes outside RBI also showed continued buoyancy in May, the volumes aggregating Rs 3.72 lakh crore from about Rs 3.00 lakh crore in April.

    2.2 Forex Market

    The US dollar dropped beyond $1.41 against the euro for the first time in May 2009 in the year’s biggest monthly drop after the Congressional Budget Office projected the US budget deficit would quadruple to about $1.8 trillion. The greenback fell against all of its major counterparts in May including the Australian and New Zealand dollars as the yield on 10-year benchmark touched the highest level since November. The overall weakening of the dollar against major currencies, resumption

    Table 4: Comparison of Call, Overnight CBLO and Repo Rates

    as also the coefficient Week Ending Weighted Average Rates (in %) Daily Average Volumes (Rs crore) Call Overnight CBLO Repo Call Overnight CBLO Repo

    of variation of call

    April 2009

    rates coming down

    2-Apr-09 4.62 3.42 4.16 10,777 38,073 13,683

    significantly (Table 2,

    9-Apr-09 3.47 0.85 1.45 9,389 41,700 23,718p 26). The volume of 17-Apr-09 3.50 2.24 2.35 10,706 48,311 17,079

    notice money saw 24-Apr-09 3.33 2.53 2.81 11,790 43,446 21,970

    May 2009

    some decline from an

    29-Apr-09 3.25 2.73 2.90 12,239 37,174 19,411

    average of Rs 2,817

    8-May-09 3.12 1.56 1.83 11,123 43,361 23,168

    crore in April to Rs

    15-May-09 3.20 2.47 2.59 11,381 56,141 24,693

    2,078 crore in May

    22-May-09 3.19 2.14 2.32 11,604 58,994 29,493

    (Table 3, p 27). The

    29-May-09 3.22 2.50 2.64 9,955 53,858 21,466 standard deviation Source: The Clearing Corporation of India Ltd (CCIL).

    june 20, 2009 vol XLIV No 25

    MONEY MARKET REVIEW

    of capital inflows into India after the for-investors all contributed to the strength-crossing the psychological barrier of mation of the new government which ening of the rupee by about 6% against Rs 50/$ to around Rs 47/$. Foreign instiincreased the confidence level of foreign the dollar during the month, the rate tutional investors (FIIs) have pumped in

    Table 5: Auctions of 91-Day Treasury Bills (Amount in rupees crore)

    Date of Notified Bids Tendered Bids Accepted Subscription Cut-off Cut-off Amount Auction Amount Devolved Price Yield Outstanding No Face Value No Face Value on PDs (Rupees) Rate on the Date (Amount) (Amount) (Amount) (%) of Issue

    (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

    April 30 3,000.00 111 7,695.28 52 3,000.00 0.00 98.20 7.35 43,707.00

    (0) (0.00) (0) (0.00) [98.21] [7.31]

    May 7 3,000.00 127 8,457.10 71 3,000.00 0.00 98.21 7.31 45,043.00

    (2) (2,635.68) (2) (2,635.68) [98.22] [7.27]

    May 14 3,500.00 113 8,527.07 65 3,500.00 0.00 98.19 7.39 47,047.00

    (2) (250.50) (2) (250.50) [98.20] [7.35]

    May 21 3,000.00 86 7,919.91 47 3,000.00 0.00 98.17 7.48 52,197.00

    (5) (4,000.00) (5) (4,000.00) [98.18] [7.44]

    May 28 500.00 41 182.72 21 500.00 0.00 98.17 7.48 51,952.00

    (2) (503) (2) (503) [98.18] [7.44]

    April 28 8,000.00 99 22,553.60 48 8,000.00 0.00 99.18 3.32 80,547.00

    (0) (0.00) (0) (0.00) [99.19] [3.28]

    May 6 8,000.00 124 30,163.75 49 8,000.00 0.00 99.22 3.15 80,003.00

    (0) (0.00) (0) (0.00) [99.23] [3.11]

    May 13 5,000.00 85 17,295.42 58 5,000.00 0.00 99.19 3.28 80,003.00

    (0) (0.00) (0) (0.00) [99.20] [3.23]

    May 20 5,000.00 72 14,652.35 35 5,000.00 0.00 99.19 3.28 85,003.00

    (0) (0.00) (0) (0.00) [99.19] [3.28]

    May 27 5,000.00 71 12,755.00 41 5,000.00 0.00 99.18 3.32 80,000.00

    (0) (0.00) (0) (0.00) [99.19] [3.28]

    Figures in parenthesis in cols 3 to 6 represent numbers and amounts of non-competitive bids which are not included in the total. Figures in the square brackets under cols 8 and 9 represent weighted average price and respective yield.

    Table 6: Auctions of 182-Day Treasury Bills (Amount in rupees crore)

    Rs 20,117 crore ($4.3 billion) into the Indian equity markets in the month of May 2009 – the highest in 19 months. The rupee recorded its biggest weekly gain of 4.9% in 13 years during the fourth week of May. The RBI reference rate moved from Rs 50.22/$ as on 29 April to Rs 47.29/$ as on 29 May 2009 (Graph C, p 28). The rupee depreciated however against the British Pound, the Australian, Canadian and New

    Zealand dollar by more than 2%.

    The forward premia of one month and three month, against their generally downward movement in April, showed some stability and remained range-bound in May. The six-month premium showed, however, an increasing trend touching 3.17% end May, rising from 2.92% in the start of May 2009 (Graph D, p 28).

    The currency futures market has begun to add significance, with the aggregate turnover of notional accounts in two main exchanges for this trade (MCX-SX and NSE) touching Rs 1,24,901 crore in May as against Rs 77,244 crore in April. Also, the

    Date of Notified Bids Tendered Bids Accepted Subscription Cut-off Cut-off Amount
    Auction Amount Devolved Price Yield Outstanding
    No Face Value No Face Value on PDs (Rupees) Rate on the Date
    (Amount) (Amount) (Amount) (%) of Issue
    2008
    Apr 30 1,000.00 83 4,430.25 7 1,000.00 0.00 96.42 7.45 15,035.00
    (1) (750.00) (1) (750.00) [96.43] [7.42]

    May 14 2,000.00 84 3,431.00 60 2,000.00 0.00 96.36 7.58 17,088.00

    (1) (553.00) (1) (553.00) [96.38] [7.53]

    May 28 500.00 50 1,872.00 4 500.00 0.00 96.38 7.53 17,788.00

    (2) (700.00) (2) (700.00) [96.39] [7.51]

    average daily turnover in both the exchanges was substantially higher during the month. But, the BSE’s share in currency futures turnover is continuously showing a downward trend.

    3 Primary Market

    In May, the primary market witnessed

    massive issues of both dated securities and

    April 28 2,000.00 78 5,530.00 37 2,000.00 0.00 98.26 3.55 20,375.00

    91-day and 182-day treasury bills by the

    (0) (0.00) (0) (0.00) [98.28] [3.51]

    central government. Some state govern

    May 13 2,000.00 63 4,955.00 19 2,000.00 0.00 98.29 3.49 20,375.00

    (0) (0.00) (0) (0.00) [98.30] [3.47]ments also entered the market with larger

    May 27 2,000.00 52 4,045.00 23 2,000.00 0.00 98.24 3.59 20,375.00 issues of state development loans (SDLs).

    (0) (0.00) (0) (0.00) [98.26] [3.55]

    The need for achieving a larger borrowing

    Figures in the square brackets represent weighted average price and the respective yield. Figures in brackets represent numbers and amounts of non-competitive bids which are not included in the total. programme, the availability of abundant

    liquidity, the announced and transparent

    Table 7: Auctions of 364-Day Treasury Bills (Amount in rupees crore)

    Date of Notified Bids Tendered Bids Accepted Subscription Cut-off Cut-off Amount
    Auction Amount Devolved Price Yield Outstanding
    No Face Value No Face Value on PDs (Rupees) Rate on the Date
    (Amount) (Amount) (Amount) (%) of Issue
    2008
    May 7 3,500.00 165 9,640.50 67 3,500.00 0.00 93.00 7.55 58,925.00
    (1) (650.00) (1) (650.00) [93.05] [7.49]

    May 21 1,000.00 108 4,100.00 41 1,000.00 0.00 92.90 7.66 59,425.00

    (1) (1,500.00) (1) (1,500.00) [93.01] [7.54]

    May 6 1,000.00 58 4,330.00 12 1,000.00 0.00 96.63 3.50 49,400.00

    (0) (0.00) (0) (0.00) [96.69] [3.43]

    support from the central bank to provide sales support through OMO for the smooth conduct of the borrowing programme, absence of any significant credit pick-up – all encouraged central and state governments to raise their resources at a quicker pace this fiscal year. The primary issues had smooth-sailing, with comfortable bid coverage, and at yield rates generally lower

    May 20 1,000.00 37 1,955.30 28 1,000.00 0.00 96.46 3.68 47,900.00 than those prevailed during the previous

    (0) (0.00) (0) (0.00) [96.54] [3.59]

    month with practically negligible devolve-

    Figures in the square brackets represent weighted average price and the respective yield. Figures in brackets represent numbers and amounts of non-competitive bids which are not included in the total. ment on primary dealers. The later part of

    Economic & Political Weekly june 20, 2009 vol XLIV No 25

    EPW

    MONEY MARKET REVIEW

    Appendix Table: Secondary Market Operations in Government Papers: NDS and NDS-OM Deals (Amount in rupees crore)
    Descriptions Week Ending May 2009: Yield to Maturity on Actual Trading Total for the Month
    29 22 15 8 1 of May 2009
    AMT YTM CY AMT YTM CY AMT YTM CY AMT YTM CY AMT YTM CY AMT YTM CY
    1 Treasury Bills A 91-Day Bills 2773.19 3.02 3167.85 3.16 5042.36 3.10 8808.79 3.03 3235.09 3.14 23027.28 3.08
    B 182-Day Bills 297.10 3.50 435.56 3.29 181.20 3.26 785.15 3.11 929.52 3.38 2628.53 3.29
    C 364-Day Bills 700.03 3.47 416.50 3.40 710.00 3.53 2356.73 3.48 1241.50 3.53 5424.76 3.49
    2 GOI Dated Securities
    A Regular (%: Year)
    5.48 , 2009 2371.00 3.15 5.48 2398.38 3.02 5.47 630.00 3.11 5.47 1725.00 3.00 5.47 570.00 3.31 5.47 7694.38 3.09 5.47
    5.87 , 2010 779.00 3.91 5.80 500.30 3.81 5.80 506.00 3.89 5.80 - - - - - - 1785.30 3.87 5.80
    6.20 , 2010 UTI SB 100.00 4.43 6.13 - - - - - - 150.00 4.37 6.13 1243.19 4.61 5.88 1493.19 4.57 5.92
    7.55 , 2010 50.00 4.05 7.31 35.00 4.00 7.30 190.00 4.02 7.30 38.00 3.80 7.28 - - - 313.00 4.00 7.30
    11.30 , 2010 1060.00 4.11 10.45 100.00 4.05 10.43 765.00 4.12 10.43 550.00 4.11 10.41 - - - 2475.00 4.11 10.44
    12.25 , 2010 150.00 4.05 11.27 - - - 470.00 4.13 11.25 350.07 4.04 11.22 - - - 970.07 4.09 11.24
    12.29 , 2010 - - - - - - - - - 150.00 4.06 11.61 - - - 150.00 4.06 11.61
    6.57 , 2011 585.00 4.89 6.39 - - - 100.00 4.75 6.37 15.00 4.85 6.38 - - - 700.00 4.87 6.39
    9.39 , 2011 455.90 4.88 8.62 110.00 4.89 8.62 790.00 4.88 8.61 - - - 125.00 4.84 8.60 1480.90 4.88 8.62
    10.95 , 2011 - - - - - - 240.00 4.80 9.79 245.00 4.97 9.81 - - - 485.00 4.88 9.80
    11.50 , 2011 - - - 75.00 4.88 10.12 150.00 4.96 10.12 190.02 4.79 10.08 - - - 415.02 4.87 10.10
    12.00 , 2011 - - - - - - - - - 450.00 4.96 10.34 - - - 450.00 4.96 10.34
    12.32 , 2011 25.00 5.05 11.05 - - - 25.00 4.61 10.95 - - - - - - 50.00 4.83 11.00
    6.85 , 2012 60.00 5.88 6.68 - - - - - - 50.10 5.35 6.59 - - - 110.10 5.64 6.64
    7.00 , 2012 OMC SB 20.00 6.15 6.83 - - - - - - - - - - - - 20.00 6.15 6.83
    7.40 , 2012 757.25 6.46 7.30 410.00 5.58 7.06 729.83 5.60 7.06 345.92 5.39 7.02 - - - 2243.00 5.86 7.13
    9.40 , 2012 - - - 5.00 5.76 8.48 - - - - - - 250.00 5.80 8.48 255.00 5.80 8.48
    7.27 , 2013 898.30 6.16 6.98 2050.00 6.00 6.94 2289.25 5.96 6.93 2832.85 5.87 6.91 1993.00 5.87 6.90 10063.40 5.94 6.93
    12.40 , 2013 - - - 75.00 6.05 10.05 - - - 0.46 7.07 10.38 150.00 6.05 10.03 225.46 6.05 10.03
    6.07 , 2014 2965.00 6.20 6.10 5901.12 5.96 6.04 2991.49 6.00 6.05 - - - - - - 11857.61 6.03 6.06
    6.72 , 2014 15.00 6.26 6.60 - - - - - - 160.46 6.00 6.53 271.20 5.98 6.52 446.67 6.00 6.53
    7.37 , 2014 745.00 6.44 7.10 1130.05 6.20 7.03 798.13 6.24 7.04 745.00 6.03 6.98 220.00 6.00 6.97 3638.18 6.21 7.03
    7.56 , 2014 1325.00 6.41 7.19 4592.50 6.14 7.10 8304.72 6.18 7.11 11030.30 6.02 7.06 3724.54 5.99 7.05 28977.06 6.10 7.09
    7.59 , 2014 - - - - - - - - - 225.00 5.92 7.05 - - - 225.00 5.92 7.05
    8.07 , 2014 - - - 275.00 6.02 8.05 - - - - - - - - - 275.00 6.02 8.05
    7.38 , 2015 1.00 6.44 7.05 40.00 6.31 6.99 80.00 6.31 6.99 91.05 6.30 6.99 80.00 6.29 6.99 292.05 6.30 6.99
    11.30 , 2015 116.00 4.05 10.44 - - - - - - - - - - - - 116.00 4.05 10.44
    7.59 , 2016 8704.63 6.90 7.32 1303.33 6.69 7.24 1330.82 6.71 7.24 1284.78 6.49 7.16 846.01 6.41 7.12 13469.57 6.79 7.28
    7.46 , 2017 225.00 6.97 7.24 40.10 6.69 7.12 205.04 6.67 7.11 825.70 6.52 7.04 426.07 6.45 7.01 1721.91 6.58 7.07
    7.49 , 2017 6.70 6.80 7.19 0.07 6.83 7.20 0.11 7.46 7.47 406.00 6.47 7.05 30.00 6.39 7.02 442.88 6.47 7.05
    7.99 , 2017 25.00 7.01 7.54 20.00 6.72 7.41 110.00 6.74 7.42 315.00 6.57 7.34 195.00 6.43 7.28 665.00 6.58 7.34
    8.07 , 2017 351.22 6.87 7.54 57.26 6.61 7.43 397.22 6.73 7.48 321.31 6.53 7.39 995.30 6.51 7.38 2122.31 6.62 7.43
    5.69 , 2018 31.00 6.56 6.05 0.20 6.51 6.03 5.70 6.12 5.87 11.85 6.34 5.86 250.00 6.35 5.97 298.75 6.37 5.97
    6.25 , 2018 16.35 6.72 6.45 45.00 6.59 6.39 0.11 6.36 6.29 16.50 6.31 6.28 25.00 6.63 6.41 102.96 6.57 6.39
    8.24 , 2018 - - - 15.00 6.82 7.53 80.50 6.59 7.42 170.00 6.51 7.38 110.00 6.36 7.31 375.50 6.49 7.38
    6.05 , 2019 10821.44 6.59 6.29 22432.40 6.34 6.18 22755.83 6.37 6.19 30528.47 6.26 6.14 23817.85 6.17 6.10 110355.99 6.31 6.17
    7.59 , 2019 - - - - - - 210.00 6.70 7.24 - - - - - - 210.00 6.70 7.24
    6.35 , 2020 11373.65 6.81 6.58 1115.00 6.84 6.59 1.14 6.95 6.65 - - - 12489.79 6.81 6.58
    10.70 , 2020 - - - - - - - - - 205.28 6.82 8.25 0.43 7.11 8.42 205.71 6.82 8.25
    7.94 , 2021 325.00 7.29 7.55 400.08 6.47 7.42 42.08 7.08 7.43 120.36 6.78 7.26 465.00 6.65 7.18 1352.52 6.78 7.35
    6.20 , 2022 FERT SB - - - - - - 0.97 7.96 7.25 3.50 8.28 7.45 50.00 7.44 6.93 54.47 7.50 6.97
    8.20 , 2022 1438.73 7.37 7.68 3310.69 7.17 7.56 1980.06 7.23 7.65 305.24 7.04 7.48 516.00 6.98 7.44 7550.72 7.21 7.59
    8.35 , 2022 29.00 7.39 7.74 540.13 7.23 7.64 71.13 7.31 7.69 105.54 7.03 7.51 415.56 6.80 7.37 1161.36 7.07 7.54
    6.17 , 2023 5.00 6.76 6.51 187.30 6.65 6.45 65.00 7.02 6.67 5.00 6.59 6.41 1.00 6.77 6.53 263.30 6.74 6.50
    6.30 , 2023 1.00 7.72 7.16 40.00 6.60 6.47 20.10 7.02 6.73 13.25 6.63 6.49 65.00 6.83 6.61 139.35 6.78 6.58
    6.35 , 2024 OMC SB - - - - - - - - - - - - 1050.00 7.45 7.06 1050.00 7.45 7.06
    6.35 , 2024 OIL MKT BONDS - - - - - - 120.00 7.91 7.37 2260.00 7.66 7.20 - - - 2380.00 7.67 7.21
    7.95 , 2025 OMC SB 37.79 7.85 7.88 - - - 0.10 7.51 7.64 2370.10 7.66 7.75 2870.00 7.55 7.67 5277.99 7.60 7.71
    6.90 , 2026 OMC SB - - - - - - 450.00 7.87 7.58 360.00 7.75 7.49 840.00 7.52 7.33 1650.00 7.66 7.43
    7.95 , 2026 FERT SB - - - - - - 0.90 7.36 7.52 183.04 7.39 7.55 10.61 7.42 7.57 194.55 7.39 7.55
    8.00 , 2026 OIL MKT BONDS - - - - - - - - - 1377.75 7.63 7.73 - - - 1377.75 7.63 7.73
    8.00 , 2026 OMC SB 330.50 7.83 7.88 252.95 7.76 7.83 4060.05 7.90 7.92 - - - - - - 4643.50 7.88 7.92
    8.24 , 2027 825.97 7.63 7.78 1879.00 7.43 7.64 1295.84 7.50 7.69 2452.90 7.32 7.56 1063.54 7.16 7.44 7517.25 7.39 7.61
    7.95 , 2032 - - - 20.00 7.40 7.50 5.00 7.47 7.56 566.30 7.34 7.45 1161.40 7.21 7.34 1752.70 7.26 7.38
    8.28 , 2032 - - - 10.00 7.41 7.56 10.00 7.49 7.63 245.20 7.34 7.51 45.50 7.25 7.43 310.70 7.33 7.50
    7.50 , 2034 406.30 7.62 7.60 901.50 7.49 7.49 809.66 7.49 7.49 3953.33 6.46 7.12 1073.51 7.18 7.23 7144.30 6.88 7.25
    7.40 , 2035 554.77 7.79 7.74 4.00 7.33 7.34 8.50 7.33 7.34 6.13 7.07 7.12 29.55 6.99 7.05 602.96 7.74 7.69
    8.33 , 2036 25.00 7.64 7.73 31.50 7.50 7.60 1005.00 7.55 7.65 105.18 7.32 7.45 258.00 7.22 7.37 1424.68 7.48 7.58
    6.83 , 2039 40.22 7.53 7.44 655.00 7.40 7.33 1283.75 7.51 7.43 1290.85 7.37 7.30 1182.77 7.14 7.10 4452.59 7.35 7.29
    Sub-total 48135.27 6.41 6.83 51084.31 6.23 6.56 55465.09 6.41 6.89 69276.66 6.29 6.79 46523.40 6.34 6.61 270484.72 6.33 6.74
    B RBI’s OMO: Sales 51.00 - - - - - 76.00 - - 80.00 - - 8.00 - - 215.00 - -
    Purchase 52.00 - - 3642.00 - - 2055.00 - - 9625.00 - - 1800.00 - - 17174.00 - -
    Sub-total 103.00 - - 3642.00 - - 2131.00 - - 9705.00 - - 1808.00 - - 17389.00 - -
    (A+B) 48238.27 6.41 6.83 54726.31 6.23 6.56 57596.09 6.41 6.89 78981.66 6.29 6.79 48331.40 6.34 6.61 287873.72 6.33 6.74
    3 Market Repo 67513.83 85137.24 74997.56 88253.10 56074.70 371976.43
    4 State Govt Securities 1213.44 6.93 8.40 1072.41 7.29 7.60 1869.55 7.27 7.61 3351.29 7.08 7.67 2243.36 6.98 7.64 9750.05 7.10 7.73
    Grand total (1 to 4) 120735.86 144955.87 140396.76 182536.72 112055.57 700680.77

    (-) means no trading. YTM = Yield to maturity in percentage per annum. CY = Current yield in per cent per annum. SGL = (RBI’s) Subsidiary General Ledger. OMO = Open Market Operations. OMC SB= Oil Marketing Companies Special Bonds. NDS = Negotiated Dealing System. OM = Order Matching Segment. FCI SB= Food Corporation of India Special Bonds. UTI SB = UTI Special Bonds. Securities with small-size transactions (Rs 50 crore or less) have been dropped from the above list but included in the respective totals. (1) Yields are weighted yields, weighted by the amounts of each transaction. (2) Current yield has not been worked out for treasury bills. (3) For Floating Rate Bonds (FRB’s) Current yields are based on the latest half-year yield determined in the auction.

    june 20, 2009 vol XLIV No 25

    MONEY MARKET REVIEW

    Graph E: Yield Curves for Dated Securities – Weighted Averages for the First and Last Week of May 2009

    Yield (% per annum)

    7

    6

    5

    4

    3 0123456789 101112131415161718192325262730

    Week ending 8 May Week ending 29 May

    Years to Maturity

    the month, however, saw some pressure on yield rates because of the expectation that the central government may hike their level of borrowing for the first half of the year and also front-load the issues. The corporates also took advantage of the favourable market conditions and entered with larger issues.

    3.1 Dated Government Securities

    On four occasions in May, the central government issued mostly longer term securities, taking advantage of the easy liquidity conditions for a total amount of Rs 54,000 crore in 13 securities, against eight securities for a total amount of Rs 48,000 crore in April 2009.

    In all, the bid coverage ratio at 2.47 in May continued to be comfortable compared to 2.63 in April. The cut-off yield rates ranged between 6.07% and 7.79% in May compared with 6.3% and 7.75% in April. In late May, some hardening of yields was noticed, compared to the early part of the month, because of apprehensions, as cited above, about a much larger borrowing programme from the new government. It should be noted, however, that the easing of yield rates seen in treasury bill auctions was not reflected in dated securities auctions, suggesting that softening of yields was steeper at the short end.

    Six state governments raised market borrowings in May of the order of Rs 9,639 crore in three tranches (including the auction of 28 April 2009) roughly by about double the level of April. Generally, the states could borrow at lower yield rates in May compared to April, though issues showed a marked spread over central government issuances of comparable 10-year maturity. The bid cover was much higher compared to central government issues at

    6.2 in April and 3.9 in May. The stronger preference for state loans may be due to

    Economic & Political Weekly

    EPW
    june 20, 2009

    higher yields offered by these securities. Also the yield rates showed a substantial rise in late May issues. For instance, Andhra Pradesh securities cutting off at 7.70% on 28 April cut off at a higher yield level of 7.45% on 26 May. In the case of West Bengal, similar rise was from 7.10% to 7.50% between 4 May and 26 May.

    3.2 Treasury Bills

    The total issuances of treasury bills amounted to Rs 42,000 crore in May compared with Rs 33,000 crore in April, though the issue of 364-day treasury bills was lower at only Rs 2,000 crore against Rs 6,000 crore in April. The softening of yield rates noticed in April continued further in early May, but in the second half of the month, some hardening of yield rates was evident. Thus, though the weighted average yield in 91-day, 182-day and 364-day treasury bill auctions showed significant declines in May over April – respectively to 3.27% from 3.77%, to 3.54% from 4.2% and to 3.59 % from 5.24% – from early part to the last week of the month, yield rates went up by 9 to 18 bps (Tables 5, 6 and 7, p 29).

    3.3 Corporate Bonds

    The corporate bond market gained a significant momentum with a total of 21 issues for amounts aggregating Rs 15,117 crore in May 2009 with a substantial amount (Rs 8,085 crore) accounting for 53% in nine issues coming from the private corporate sector. The rest came from FIs/banks (five issues for Rs 1,675 crore), non-bank financial companies (five issues for Rs 787 crore) and state and central government undertakings (three issues for Rs 4,570 crore). Most of the issues carried a rating of AA or AAA. FIs and banks had the objective of augmenting their lower and upper tier II capital. The total issue amount represented more than twice the amount issued in April 2009 and as high as five times compared with May 2008.

    The private corporate sector issues in the form of bonds and non-convertible debentures carried coupons in the range of 8.25% and 11.00% depending upon the ratings and maturity. These offered a significant spread over government securities. A prominent case was the issue of Rs 4,200 crore coming from Tata Motors – with

    vol XLIV No 25

    maturities ranging from two years to seven years in four bonds and coupon rates ranging between 6.75% and 10%. These competitive rates were made possible because of the guarantee support from the state-owned bank, SBI. It is noteworthy that for this issue, among the largest by an Indian corporate and the first of its kind for the Indian capital market, SBI guarantee was allowed to be retained, though the RBI said that banks should not guarantee bonds.

    The Securities and Exchange Baord of India (SEBI) has simplified the issuance and listing of non-convertible debt securities by companies, as part of its attempt to develop the Indian corporate debt market. The companies are required to provide only “minimal incremental disclosures” for debt issuance. This is indeed a very welcome step in the right direction to give a fillip to the otherwise dormant corporate debt market

    4 Secondary Market

    The secondary market activity was dominated by the market repo transactions amounting to Rs 3,71,976 crore in May, a jump from Rs 3,00,093 crore in April. The turnover in government securities market was by and large maintained at Rs 54,097 crore in May compared with Rs 54,909 crore in April. The RBI’s OMO remained slightly subdued at Rs 17,174 crore mostly representing purchases by the central bank, against Rs 22,580 crore in April (Appendix Table, p 30).

    The hardening of yield rates, in general, particularly at the longer end in late May compared to early May is seen in the upward shift in the yield curve between the second week and last week of May 2009 (Graph E).

    The levels of outstandings under the RBI’s liquidity adjustment facility have increased from Rs 88,565 crore as on 29 April to Rs 1,10,685 crore as on 29 May 2009 after reaching the peak of Rs 1,45,770 crore as on 8 May 2009.

    The secondary market transactions in commercial bonds on a daily average basis which showed an increase in April to Rs 835 crore from the March level of Rs 358 crore, decreased in May to Rs 487 crore, through

    the primary market activity remained
    very buoyant.
    31

    INSTITUTE OF ECONOMIC GROWTH

    University of Delhi Enclave, North Campus, Delhi-110 007 Tel No. 27667101, 27667365, 27667424 Website: http://www.iegindia.org

    ICSSR Institutional Doctoral Fellowships for the year 2009-2010 in Economics and Sociology

    Applications are invited in the prescribed form for award of ICSSR Institutional Doctoral Fellowships for the year 2009-2009. Institute of Economic Growth has been allocated Six Fellowships (5 ordinary and 1 Salary Protected). Institute offers ICSSR Doctoral Fellowships only in Economics and Sociology.

    Eligibility:
  • 1. Postgraduate in Social Sciences with at least 55% marks.
  • 2. The candidate should have cleared National Eligibility Test (NET for JRF/Lectureship)/M.Phil/or two research articles published in reputed social science journals (reprints to be attached).
  • 3. The applicant must be registered for Ph.D but those who are not yet registered may also apply. They will have to get registered/re-registered as the case may be, within six months from the award of fellowship.
  • Age:

    The upper age limit for a doctoral fellow is below 35 years as on July 15, 2009 (relaxable by 5 years in case of SC/ST). For teachers and professional staff of research institute holding regular post the upper age limit would be 45 years. In exceptional cases, where a candidate is found to have outstanding ability, the age limit may be relaxed marginally at the discretion of ICSSR.

    Value:

    The selected candidates will be paid a fellowship amount of Rs. 6,000/- per month plus Rs. 12,000/per annum as contingency grant. Duration of the fellowship is two years and extendable by one year in exceptional cases only.

    In case of an employed scholar his/her salary will be protected. In addition, a contingency grant of Rs. 12,000/- per annum will also be paid. Duration of a salary-protected fellowship will, in no case, be more than two years.

    Only shortlisted candidates will be called for interview.

    The Institute reserves the right to reject any application without assigning any reason. The Institute is also not responsible for any postal loss/delays in communications.

    Applicants are requested to submit their applications along with the proposed Research Proposal latest by July 15, 2009 to the Academic Programme Officer, Institute of Economic Growth, University of Delhi Enclave, North Campus, Delhi-110007.

    Application form is available in the Academic Section, Room No. 116 of the Institute on all working days. Application form is also available on the Website of Institute, Website: http://www.iegindia.org

    OFFICIATING DIRECTOR

    june 20, 2009 vol XLIV No 25

    To read the full text Login

    Get instant access

    New 3 Month Subscription
    to Digital Archives at

    ₹826for India

    $50for overseas users

    Comments

    (-) Hide

    EPW looks forward to your comments. Please note that comments are moderated as per our comments policy. They may take some time to appear. A comment, if suitable, may be selected for publication in the Letters pages of EPW.

    In these times of infl ation and the receding prospect of growth, and in the presence of fi scal laxity and higher government borrowing...

    The Reserve Bank of India's monetary policy for 2012-13 has had to be framed at a time when the economy is facing multiple risks - infl ation at...

    The postponement of fi scal consolidation, as is evident from the Union Budget, 2012-13, is likely to add pressure to the external sector balance...

    An attempt is made here to reclassify the commodities covered by the Wholesale Price Index series, first, into two groups, namely, the consumer...

    This review analyses the trends in certain crucial parameters pertaining to the market borrowings of the centre and the states. It argues that the...

    Before the global financial crisis, central bankers depended mainly on interest rates in policymaking and operations; in the post-crisis period...

    Deregulation of the interest rate on savings bank deposits will allow more room for non-price competition for improving the quality and...

    Is the mid-year monetary review by the Reserve Bank of India going to see a pause in the rate hike, implying that policy rates have now peaked?...

    A review of fiscal developments during the current financial year, an assessment of the possibility of failure to achieve the fiscal deficit...

    The downgrade of US debt is the second shock to hit the Indian financial markets after the 50 bps hike in repo rates by the RBI on 26 July 2011....

    Back to Top