Saturday, April 16, 2016

One Eyed King in Land of Blind - Says RBI Governor

RBI Governor is presently in US for Spring Meetings of  IMF and World Bank. Speaking to MarketWatch correspondent on sidelines of the Meet, +Raghuram Rajan  was candid and modest in admitting that there is lot of work yet to be done for India to claim the epithet of 'bright spot of global economy'.

Raghuram Rajan, on being quizzed how he has managed to steer India to being the bright spot of global economy, admitted modestly and realistically that India is not such a bright spot since there is still a long way to go. World including IMF is giving this badge to India because it is like "One-eyed King in land of blind". That tells the whole story of state of Global economy.

Raghuram Rajan hinted that he is ready for more cuts in repo rate, provided there is good monsoon and inflation cools down further. This is splendid news for banking sector

Met department has now made forecast of above average monsoon this year. And icing on cake is that March CPI inflation numbers have come out better than expected at 4.83 

Now Raghuram Rajan has to act and cut interest rates further, as equity market participants had earlier expected. This expectation was mentioned in my post RBI Cuts Rate - But Was It Enough? 

By his own admission RBI Governor will be cutting rates soon. This will be very positive boost to Indian markets, with banks leading the charge. Only dampening effect will come from global markets as crude prices are expected to fall after Doha Meet on Production Freeze on Sunday. Check it here.

But we shall overcome!. Bright spot of global economy has to perform after all.