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RBI ups short-term rates to check inflation |
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Bankers differ on interest rate hike
Pranab pats RBI chief
Govt mulls BSNL stake sale
Call to US, Canada @ one
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Corporate Results
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RBI ups short-term rates to check inflation
Mumbai, July 27
RBI Governor D Subbarao said later in the day that the increase would help bring down inflation to 6 per cent by the end of the current financial year. According to the RBI, the Indian economy would continue to grow despite the rate hikes. It raised growth projections from 8 per cent to 8.5 per cent. Defending the increase in the rates, Subbarao said the central bank’s main task was to contain demand-side inflation. “It is important for us to continue watching demand side pressures," Subbarao told reporters later in the day. He further added that the RBI had the flexibility to take pre-emptive action to contain inflation, if required. The RBI has now introduced the concept of mid-quarter review from September next. The next mid-quarter review is expected on September 16. Following the rate hikes banks are expected to increase both deposit and lending rates, Subbarao said. However, he was optimistic of the economy continuing on its growth path. "We will ensure that growth is not hurt while normalising rates," the governor said.
He felt that inflation would be moderated and the economy would be on the right track with the monsoons showing signs of being normal this year. “If it rains, the monetary policy works. Everything is all right. If it doesn’t rain, there is worry,” Subbarao said. Today’s rate hikes comes barely a month after the RBI increased repo and reverse repo rates by 0.25 per cent. The apex bank has been gradually withdrawing the economic stimulus to the economy introduced after the global financial crisis in 2008.
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Bankers differ on interest rate hike
Mumbai, July 27 "No immediate impact on the interest rate. In Q2, interest rate won't go up by and large," SBI Chairman O P Bhatt said, adding that the bank in the coming days would review the build-up of "upward bias". Acknowledging that excess liquidity has disappeared from the system, ICICI Bank CEO and Managing Director Chanda Kochhar said the interest rate depends not only on policy measures but also on the liquidity situation. "We are already witnessing a rise in interest rate for wholesale deposits," she added. "The monetary action by the RBI is aimed at attacking inflation. It has made fund costlier for banks. It is a signal for upward movement of interest rates," Central Bank of India executive director Arun Kaul told PTI. At the same time, some feel that there could be some impact on the short-term rates of maturity below one year. Short-term funds would get little costlier and there was possibility that the short-end rates could also go up in the future, Indian Bank executive director V Ramagopal said. IDBI Bank executive director Sushil Muhnot said banks would have to factor in many things before increasing interest rates. The impact of policy action on interest rate would come after some time, Muhnot said, adding liquidity is also under pressure at present. However, Oriental Bank of Commerce executive director S C Sinha said the RBI policy action may not have impact on interest rates since cash reserve ratio (CRR) had not been touched. — PTI
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Pranab pats RBI chief
New Delhi: Finance Minister Pranab Mukherjee today said the RBI's decision to raise short-term key rates would check inflation without hurting growth.
"I expect this policy will lead to further easing of inflation which already is going down and it should also keep us fully on track in terms of growth," Mukherjee told reporters inside Parliament complex.
"The monetary policy just announced by RBI is another calibrated step in the right direction ... The RBI has not only raised policy rates but has narrowed down the spread between repo and reverse repo rates for a more efficient financial system," he said. This is the fourth policy rate hike by the Reserve Bank so far this year. The RBI in order to keep sufficient liquidity in the system has, however, kept the cash reserve ratio (the amount of deposits banks park with RBI) unchanged at 6 per cent. "It is a welcome measure and particularly I am happy that CRR has not been increased because of successful auction of 3G has created some strain on liquidity," Mukherjee said. —
PTI |
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Bricks & bouquets
— Rajan Bharti
Mittal, Ficci president The lending rates may go north by 25-50 basis points, making the bank's borrowings a little more dearer since repo rate and reverse repo rate have been hiked. —
Swati
Piramal, Assocham president The Federation of Indian Export Organisations (FIEO) too expressed apprehension over the upward change in the interest rate regime. —
Montek Singh
Ahluwalia, Planning Commission Deputy Chairman |
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Govt mulls BSNL stake sale
New Delhi, July 27 "The government is considering offering part of its equity share holding in the BSNL by an offer of sale to the public to promote growth of the company," Sachin Pilot told the Rajya Sabha. The BSNL had discussed the issue with employee trade unions, Pilot added. However, the BSNL unions have been up in arms against the government decision of selling the company’s stake. This latest confirmation will again give the unions a chance to start protests over the government's decision. He also said the Communications Ministry had requested the Finance Ministry to refund BSNL and Mahanagar Telephone Nigam Ltd the fees they paid for third generation 3G bandwidth and wireless internet bandwidth. The BSNL, which offers telecom services in 20 of India's 22 service areas, paid the government about Rs 185.01 billion for 3G and wireless broadband radio bandwidth, while the MTNL, which offers communications services in Delhi and Mumbai, paid Rs 110.98 billion. "Keeping in view shouldering immense social, rural and government obligations by the BSNL and the MTNL, this ministry has requested the Finance Ministry to consider the request of these public sector units and reimburse the fee paid for 3G, BWA spectrum," Pilot said.
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Call to US, Canada @ one
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Chandigarh, July 27 The new tariff plan for ISD calls has been rolled out only in Punjab, which has a substantial NRI population. "Since a number of people from here live in the US and Canada, this new tariff will allow their family members here the convenience of affordable calling to these countries," said Aditya Gupta, chief operating officer (Punjab, Haryana and Himachal Pradesh). The new offer comes with a pack of Rs 59 with validity of 30 days and Rs 205 with a talk time of Rs 145 along with validity of 30 days. With this new plan, Tata Docomo becomes the first telecom operator to offer per second pulse in international calling. As against a standard rate of Rs 6.40 - Rs 8 per minute by all other telecom players, Tata Docomo is hoping to see a huge shift in the international calls on its network. “The ISD market size (put together ISD calling of all operators) in the state is estimated at about 40 million minutes per month," said Gupta. Gupta said in the near future, they were looking at incorporating this tariff plan for calls made on its network to the UK. Currently, Tata Docomo charges six paisa per second for calling made to the US, Canada, Australia and the UK while it charges 11 paise per second for calling to the Gulf and Nepal.
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Corporate Results
Mumbai, July 27 According to the company, refining revenues rose 106.81 per cent to Rs 50,531 crore from Rs 24,434 crore and petrochem revenue was up 18.8 per cent to Rs 13,903 crore from Rs 11,707 crore (YoY). However, earnings for refining went up from Rs 1,299 cr to Rs 2,035 crore while earnings for petrochem saw a decline from Rs 2,109 crore to Rs 2,053 crore. Petchem margins stood at 14.8 per cent while and refining margins were at 4 per cent. Gross refining margin was at US$ 7.3 a barrel. L&T nets Rs 666 cr
Larsen & Toubro today reported a net profit of Rs 666 crore for the quarter to June against Rs 1,598 crore during the same period a year ago. "The profit after tax for the corresponding quarter of the previous year at Rs 1,598 crore included an exceptional gain of Rs 1,020 crore from sale of its long term investment in UltraTech Cement," the company said in a filing to the stock exchanges. The net sales of the company grew by 6.4 per cent to Rs 7,835 crore during the April-June quarter. HUL net declines
With first quarter profit declining by 1.8 per cent, Hindustan Unilever (HUL) today said it was looking at increasing the prices of some products in the coming quarters with a view to maintain its margins. The net profit in Q1, FY'11, fell by 1.8 per cent to Rs 533.21 crore from Rs 543 crore in the year-ago period. Sridhar attributed the decline to high advertising spends and hardening of costs of raw materials such as palm oil. However, the overall sales of the company during the quarter rose by 7.1 per cent to Rs 4,793 crore, as against Rs 4,475 crore in the year-ago period. Ashok Leyland
Chennai: Ashok Leyland today reported a nearly 16-fold jump in its net profit at Rs 122.64 crore for the quarter ended June 30, 2010. The company had posted a net profit of Rs 7.77 crore in the corresponding quarter of last fiscal, the firm said. The net sales of the company in the first quarter increased by over two-fold to Rs 2,347.98 crore from Rs 918.07 crore in the year-ago period. Cadila Healthcare
Cadila Healthcare today posted a 60 per cent growth in the net profit to Rs 199.18 crore for the quarter ended June 30. The company had reported a net profit of Rs 124.79 crore for the same quarter last year, Cadila Healthcare said. Income from operations rose to Rs 1,133.78 crore in the first quarter (April-June) from Rs 903.54 crore in the same period last year. Glenmark
Glenmark Pharmaceuticals today reported a nearly three-fold jump in the consolidated net profit at Rs 155.54 crore for the first quarter ended June 30, 2010, on the back of good sales growth. The company had a net profit of Rs 53.4 crore for the same quarter ended June 2009, Glenmark Pharmaceuticals said. |
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The RBI today announced another round of rate hikes in a bid to contain inflation. The bank announced hikes in repo and reverse repo rates by 0.25 per cent and 0.5 per cent. With this, the short-term lending rate or repo will stand at 5.75 per cent while the short-term borrowing rate or reverse repo at 4.5 per cent. The new rates are effective immediately. The RBI has, however, left the Cash Reserve Ratio unchanged.
New Delhi: Finance Minister Pranab Mukherjee today said the RBI's decision to raise short-term key rates would check inflation without hurting growth.
"I expect this policy will lead to further easing of inflation which already is going down and it should also keep us fully on track in terms of growth," Mukherjee told reporters inside Parliament complex.
This is a huge surprise as general expectation was at the most 25 basis points increase in both rates... The reverse repo increase will incentivise parking of funds by banks with the RBI, thus reducing lending opportunities to the industry.
Given both the trends in liquidity and prices, it was expected that RBI would tighten policy. I don't think it will have any adverse effect on the real economy.