While the government said it will fast-track implementation of pending reforms, the central bank assured the industry that it will maintain adequate liquidity and respond quickly to evolving situation
New Delhi: the government and the Reserve Bank of India (RBI) on Monday sought to allay fears on account of adverse impact of the US downgrade by a rating agency saying the fundamentals of the Indian economy are strong and they were ready to address any concern that may arise from the present situation, reports PTI.
While the government said it will fast-track implementation of pending reforms, the central bank assured the industry that it will maintain adequate liquidity and respond quickly to evolving situation.
“Our institutions are strong and are prepared to address any concern that may arise on account of the present situation”, said finance minister Pranab Mukherjee giving an assurance to the worried industry and nervous stock markets.
The government, he said, “Will fast-track implementation of the pending reforms and keep a close eye on international developments... We would focus on encouraging greater domestic consumption and give impetus to drivers of domestic growth.”
Earlier in the day, the RBI said, “We will respond quickly and appropriately to the evolving situation,” in an apparent bid to calm down the stock market which opened on a nervous note on weak cues from global bourses.
“In the immediate future, the RBI’s priority is to ensure that adequate rupee and forex liquidity are maintained in domestic market to prevent excessive volatility in interest rates and the exchange rates,” it said.
The BSE Sensex which saw a fall of 546 points in early trade, closed at a 14-month low of 16,990 points on lowering of sovereign rating of US by Standard and Poor’s to AA+ from AAA, the highest rating, and fears of “double dip” recession hitting the world’s largest economy.
Admitting that global developments in the US and Eurozone will have some impact on the country, Mr Mukherjee said, “...as India’s growth story is intact and its fundamentals are strong, we are in a better position than other nations to meet the challenge.”
The finance minister expressed confidence that India could see faster and greater FII inflows unlike after 2008 meltdown, in view of the higher returns that global investors could get here.
“There could be some impact on the capital and trade flows. But as India’s growth story in strong, we could see FIIs seeing India as an attractive investment destination even if there is any temporary outflow,” he added.
On the positive side, Mr Mukherjee said softening of international commodity prices, especially oil, would help in controlling inflation and maintaining fiscal balance for 2011-12.
Noting that downgrade has raised concerns of “continuing turmoil in global financial markets”, the RBI said that it will closely monitor all key indicators and continuously assess the impact of global developments on rupee, forex liquidity and macroeconomic stability.
The country has enough reserves to meet the forex demand in the event of significant capital outflows, the RBI said.
In the worst phase of the recent global financial crisis, India recorded a growth rate of 6.8% in 2008-09, suggesting high resilience emerging from domestic factors, it said.
“While the downside risks to growth may have increased in wake of the global developments, they are likely to have limited impact,” RBI said.
R Shankar Raman will be appointed CFO of L&T on 6th September, and will be elevated to the Board on 1 October 2011
The Board of Directors of Larsen & Toubro announced that R Shankar Raman will be appointed chief financial officer (CFO) of the company on 6th September, and will subsequently be elevated to the Board on 1 October 2011. Mr Shankar Raman will succeed YM Deosthalee who takes over as chairman and managing director of L&T Finance Holdings.
Mr Shankar Raman is currently senior vice president, finance & legal. He qualified as a chartered accountant in May 1983 and became a graduate of the Institute of Cost & Works Accountants of India in 1986. Over the past 29 years of professional work experience, Mr Shankar Raman has worked for leading listed corporations in varied capacities in the field of finance.
Mr Shankar Raman's portfolio covers a wide range of critical functions such as finance & treasury, corporate accounts, taxation, insurance, risk management, legal, and investor relations. He is on the Board of several companies including international subsidiaries within the Larsen & Toubro Group. Mr Shankar Raman is a member of Western India Regional Council of Confederation of Indian Industries.
Mumbai-based LIC Housing Finance has announced an increase in its home loan rates for new loans. For loans up to Rs30 lakh the rates will be 10.65%. For loans above Rs30 lakh & less than Rs75 lakh the rates would be 11% whereas for loans of Rs75 lakh up to Rs150 lakh the rates would be 11.50%.