A revival in the US consumption of seafood has helped India’s seafood exports to rise in H1 FY10-11. According to Marine Products Export Development Authority (MPEDA), seafood exports in the September 2010 quarter stood at 2,74,663 tonnes worth Rs5,065 crore, up 4% in volume, 16% in rupee realisation and 23% in dollar terms. MPEDA hopes to achieve exports of $2.5 billion during FY10-11 with...
An increase in paprika oleoresin production in China may result in India losing as the top producer of paprika. In 2009, about 35% of India’s total oleoresin exports (Rs708 crore) came from paprika. India uses byadgi chilli which, unlike Chinese paprika, has some pungency that is removed for paprika oleoresin. Since China’s production of paprika is higher, Indian oleoresin exporters have...
Mumbai: With the system facing cash crunch due to outgo on account of advance tax payments and busy credit season, the Reserve Bank of India (RBI) today announced measures to pump in Rs48,000 crore even as it cautioned against inflation, reports PTI.
It said prices still remained a major concern because of rising demand and high global commodity rates.
At the same time, the RBI kept short-term lending and borrowing rates (repo and reverse repo) as well as mandatory deposit requirement for banks (cash reserve ratio) unchanged.
This is aimed at prompting most banks to hold on to their interest rates.
Meanwhile, the market took the announcements with a pinch of salt with the Bombay Stock Exchange's benchmark index Sensex trading lower by over 50 points at 19,594.83 during intra-day trading.
Besides, the rate sensitive sectors like banking, realty were mixed with Bankex trading 0.47% higher and Realty index at 0.03% down.
The RBI measures came on a day when food inflation rose to 9.46% for the week ended 4th December from 8.60% a week ago, and the central bank also did not rule out the possibility of the rate of overall price rise going above its projections of 5.5% by March-end. The hike in petrol prices is also expected to add to inflationary pressures.
However, overall inflation has been declining persistently and stood at 7.48% in November.
Enthused by 8.9% growth rate for the second quarter, RBI, however, did not change its projections of 8.5% economic growth this fiscal and preferred to revisit numbers at its next review on 25 January 2011.
Blaming the government's huge cash balance for aggravating liquidity situation, the central bank said it will purchase sovereign securities for Rs48,000 crore in a month, expected to ease situation of cash-strapped system a bit.
It also cut Statutory Liquidity Ratio (SLR), which is a requirement for banks to keep portion of their deposits in government securities, cash and gold, by one percentage point to 24% from the present 25%.
However, the measure is unlikely to provide any immediate relief to the system, as RBI has already announced that it will not penalise the banks even if their SLR comes down two percentage points below the mandatory requirement.
That facility now stands cut to one percentage point, RBI said today.
The RBI cautioned that its moves should not be seen as a change in the policy stance, since “inflation continues to remain a major concern.”
However, technically RBI’s move is a first measure stance this year of a pause on its rising rates spree.
The central bank said while it expected liquidity to remain in short supply, “the extent of tightness has been beyond the comfort level of the Reserve Bank.”
“This has been mainly due to persistence of large government cash balances which have averaged Rs84,000 crore since the Second Quarter Review of November,” it said.
The government got over Rs1 lakh crore from the sale of spectrum to high speed telecom and broadband services against its projections of Rs35,000 crore in the budget.
It is also expected to get robust tax collections from corporates in advance payments for third quarter.
Bankers said RBI actions would enable most banks to not further raise their interest rates.