Interesting Updates

RBI Governor took quantum leap by decreasing Repo rate 50 basis points when most of the analyst community was expecting 25 basis points. Below are some of the important highlights of his speech...

--> Repo rate reduced by 50 basis points to 8 percent and consequently Reverse repo would be adjusted to 7 percent and Marginal Standing Facility (MSF) rate gets back to 9 percent as both of these are pegged to Repo rate with 100 basis points lower and higher respectively.

--> Now banks can borrow 2 percent under from MSF adjustments from earlier 1 percent.

--> RBI expect GDP growth of 7.3 percent for 2012-13 against the government's projection of 7.6 percent.

--> According to RBI, inflation for March 2013 is 6.5 percent.

--> Non food credit growth of 17 percent.

--> Potential Risk: 1. Oil price and fear of supply disruptions

2. Deterioration of fiscal deficit

3. Government Borrowing

4. Financing C/A deficit

5. Structural shift in preference of food basket

--> NBFC's (particularly Gold Loan Companies) borrowing limit has been reduced to 7.5 percent from 10 percent of bank's capital.

Ruchir Sharma of Morgan Stanley talking about Indian growth scenario.

George Soros observation about EURO.