Highlights of RBI Governor Reddy's speech in Paris

[K.Karthik Raja]

Highlights of RBI Governor Reddy's speech in Paris

MUMBAI - Following are the comments of Reserve Bank of India
Governor Y.V. Reddy on globalisation, growth and stability in Paris
today:
.
FOREX FLOWS
* FX flows to be managed via short-term policy tools
* Hard to calibrate absorptive capacity of volatile FX flows
* Liberalising FX outflow can't be of help in short run
* Liberalised regime attracts higher FX flows
* RBI needs to watch out for large, lumpy FX inflows
* RBI managing liquidity actively via reverse repo, repo
* Limits to effectiveness of intervention if rupee moves one-way
* Need to see sterilisation extent based on cost, tools
* Need to see impact of stance, measures on rupee
* Management of monetary, FX reserves, rupee complex
* Domestic factors play dominant role in policy making
* Global factors important but local factors dominant
* Need to factor in global market turmoil in policy making
* "Acute policy dilemmas" due to global food, oil prices


K.Karthik Raja
www.kences1.blogspot.com