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Economy
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Well, i respect your concern for crude oil prices but the real time world does not work on emotions. I would like to list some facts and figures.
1. Every rate hike in BPS will mean higher cost of lending and cost of money will go up. Consequently demand will go down, which will mean long term growth will be threatened.
2. Crude Prices do not have direct relation with Indian interest rates. They are in direct relation with demand and supply in the world of which the major consumers are USA, China and India and other emerging markets such as Brazil, South Africa, Euro Zone.
USA is already seeing a slowing demand due to high gas prices there. India and other emerging markets specially Asian countries have given till now a large subsidy to their people which has in turn not reacted proactively with respect to rising prices. Usually, when price rises, demand falls, but if in a country demand is consistent or growing and international crude price rise is not transferred as the local price there, then actual demand does not falls. It is the govt. which is bearing this brunt, so this causes increasing demand and supply gap. On this, then come punters who play buy and sell positions and make it even worsened.
Interest rates are the first solution but they are not the obvious solution in cases. You have already seen the maximum interest rates and above this growth will start getting affected as remember India is a country with less infrastructure but more of capability, its the will power and brain of corporates which is driving things up here, as compared to infrastructure of China we are 3-5 years behind that.
So, a govt. can not force heavy interest rate scenario on the corporates, crude oil prices are already in a corrective mode, govt. has to make sure proper rationalization of prices as per consumers both retail and industrial. Secondly, we would like to see companies posting good profits and remember no where in any country has the corporate world performed above par in high interest scenario. so remove this fact from your mind that interest rates are always the direct solution. You have to address the supply and demand situation also. You have to develop alternate sources of energy in your country and you have to address moderating demand also.
I think India has seen the peak of interest rates now and we wont see any interest rate hike henceforth rather we will see inflation slowly and steadily coming down till march. ...
In reply to:
Inflation @ 12.34%; experts see tight Money Policy ahead
Posted by :
Guest
I think one more rate hike is necessary, I dont think it will affect the domestic infra growth to that extent but it will surely hamper & stop crude strength. It will correct crude prices near USD 70 per barrel. One more rate hike of 50 BPS is necessary otherwise crude will remain more time at USD 85 per barrel. It should come down to USD 70 per barrel. I think at USD 80 per barrel, fuel prices in India will come down by Rs. 4-5.8 per litre. 
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Electricity generation is the single largest item in the Index of
Industrial Production with a total weight of 10.2%.
According to the latest data, India\'s industrial production in June grew
5.4% compared with 8.9% a year ago.
India\'s electricity generation in July had grown 4.5% on year
...
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India March-end FX reserves third among emerging markets.
* India March-end FX reserves fourth largest globally.
...
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CRR or repo rate hike of 50 BPS will act as perfect bear for Crude prices. & that will be good for market over all. Domestic infrastructure growth to remain intact. & it could be the last CRR hike. ...
In reply to:
Inflation @ 12.34%; experts see tight Money Policy ahead
Posted by : MMB Messenger
Inflation came at 12.34% for the week ended August 23 as compared to 12.40% last week. Earlier, CNBC TV18 poll saw inflation remaining unchanged at 12.40% after it fell for the first time last week after several months.
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I think one more rate hike is necessary, I dont think it will affect the domestic infra growth to that extent but it will surely hamper & stop crude strength. It will correct crude prices near USD 70 per barrel. One more rate hike of 50 BPS is necessary otherwise crude will remain more time at USD 85 per barrel. It should come down to USD 70 per barrel. I think at USD 80 per barrel, fuel prices in India will come down by Rs. 4-5.8 per litre....
In reply to:
Inflation @ 12.34%; experts see tight Money Policy ahead
Posted by : MMB Messenger
Inflation came at 12.34% for the week ended August 23 as compared to 12.40% last week. Earlier, CNBC TV18 poll saw inflation remaining unchanged at 12.40% after it fell for the first time last week after several months.
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Inflation came at 12.34% for the week ended August 23 as compared to 12.40% last week. Earlier, CNBC TV18 poll saw inflation remaining unchanged at 12.40% after it fell for the first time last week after several months....
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RBI warns against fictitious mails offering money. Seems so many indians are getting fooled that it would have made RBI frustated seeing that money is donated so easily to these people on internet who give greed of lottery, sudden prize and then ask to deposit a token money for that.
I have full sympathy with the RBI governor for this. ...
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The finances of the Central Government may come under pressure during 2008-09 on account of implementation of the Sixth Pay Commission award including payment of arrears, higher oil subsidies, increase in fertiliser subsidy due to a sharp rise in the price of raw materials and fertiliser in the international market.
Reserve Bank Of India said....
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India’s external debt surged by 30.4 per cent to $221.2 billion (Rs. 8,84,516 crore) in 2007-08, mainly owing to the rush by corporates to raise cheaper funds abroad following high interest rates on bank credit back home.
courtesy TH...
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Crude prices fell below USD 107 per barrel Simon Wardell, Senior Oil Analyst, Global Insight sees the next support for crude at USD 100 per barrel. He feels the OPEC might cut quota if crude falls below USD 100 per barrel.
...
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India Apr-Aug direct tax mop-up 844 bln rupees, up 38% on year, economy moving ahead amidst all hue and cry. ...
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The inflation rate is seen rising to 12.44% from 12.40% a week ago.
...
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The rupee is expected to rise on Thursday, helped by softening oil prices but weak cues from Asian stock markets and a widening trade deficit could limit the gains.
* The dollar dipped against the euro, inching away from an eight-month high hit on Wednesday as investors trimmed positions ahead of an interest rate decision by the European Central Bank.
* Oil was trading above $109 a barrel, well off record highs above $147 in mid-July. Refiners are the biggest buyers of dollars in the domestic market and their demand had pushed the rupee to 17-month lows in the previous session.
...
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It is high time for country\\\\`s growth and welfare we do not tie finance secretary and RBI head. In professional life of an RBI governor the entire energy is spent to sastify or toe line with politicians (finance ministry)in balancing act than taking an independant view and implement the same for the sake of the country. The history shows seldom RBI and Finance Ministry disagreed on any action or reform initiated - but continuous mutal appreaciations only happen - thus country missing pragmatic economic and banking reforms from RBI as a professional body independant of Finance ministry\\\\`s influence. ...
In reply to:
Will new RBI Chief continue the hawkish stance?
Posted by : MMB Messenger
Tamal Bandyopadhyay of Mint said one should not expect a less hawkish view from the new RBI governor D Subbarao. He expects a repo rate or CRR hike in the next policy meet and believes there is a conflict between the RBI and the Finance Ministry on interest rates.
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Company - Rank - Turover($Millions)
1 Indian Oil - 116 - 57,427
2 Reliance Industries - 206 - 35,915
3 Bharat Petroleum - 287 - 27,873
4 Hindustan Petroleum -290 - 27,718
5 Tata Steel- 315 - 25,707
6 Oil & Natural Gas - 335 - 24,032
7 State Bank of India -380 - 22,402
...
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