Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
It e&pects inflation to average 5 percent to 5 5 percent in the financial year to the end of ne&t +arch .8e maintain our vie" that the tightening cycle in India is not over yet,. the ban# said &TR"N' (!T!) TI'*T$R I+,I(IT+ay*s industrial output rose a si<<ling 1$ 6 percent from a year earlier, pic#ing up sharply from )pril*s gro"th Industrial output accounts for a quarter of India*s gross domestic product and the data tallies "ith a surge in demand for ban# loans, "hich "ere about 3$ percent higher in June than a year earlier, as companies invest in capacity to meet demand !he pace of activity is li#ely to continue if the monsoon is normal this year =ealthy crops "ould boost rural incomes and demand, a #ey factor in economic gro"th since nearly t"o thirds of India*s one billion population live on the land )nalysts say the central ban# has also reined in high liquidity, possibly to manage inflation, by refraining from rupee intervention and allo"ing the currency to be nearly 1$ percent overvalued on a trade-"eighted basis, "hich is unusual but "hich helps curb oil-led inflation >eutsche ;an# said in a report this "ee# gro"th in the central ban#*s net foreign e&change assets, the foreign currencies it holds and built through intervention, has no" slo"ed to 6 3 percent year-on-year from 1- percent in early +ay, as the central ban# has stayed a"ay from intervening )nalysts say "hile a drop of nearly 3$$-billion rupees ('- ? billion) of e&cess funds in the ban#ing system since early +ay is a sign of tighter conditions, the central ban#*s ne&t step "ould be raising domestic rates to rein in inflation e&pectations
a)
What are the monetary policy instruments that are referred to in this report? Explain how they may be used to tackle the economic problem faced by the country as evident in the report. What has been the policy of RBI re ardin exchan e rates durin the period under review? What is the apparent reason for that course of action? Examine the link between inflation! interest rates! bond prices and yield with reference to the context iven in the report. Explain what is expected happen to the rate of rowth of dp and why.
b)
c) d)