Excitement was palpable at the mint street office of the Reserve Bank of India. A number of high profile dignitaries swarmed the central bank office to bid adieu to the outgoing Governor, D.Subbarao and greet the incoming Governor, Raghuram Rajan. Rajan's reform series on his Day-1 in office gave ample evidence that the 50-year-old governor had done his home work. In his 18-minute speech Rajan said that though the times are tough, the India story is still strong. Here is a compilation of the immediate and not-so immediate measures that the new governor outlined:
a) There is a need to liberalise markets further. He said that the RBI (in consultation with the markets regulator) will lift restrictions on investment and position taking. This could be fraught with risks, he warned. However, such moves are necessary to prevent investors from trading on foreign shores where position taking is allowed substantially.
b) The RBI will strive towards more transparency and predictability in its decisions.
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