ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles by K KanagasabapathySubscribe to K Kanagasabapathy

Nuances of the Reserve Bank's Exchange Rate and Reserves Management

There is a widely-held view that due to widening inflation differentials in India vis-à-vis the advanced economies, the rupee is, infact, overvalued in real terms and a downward adjustment would help in boosting sagging exports and in narrowing down the trade deficit. This note attempts to address related issues and suggests a way forward.

Sustainability Issues in India's Balance of Payments

The cover provided to the balance of payments all these years by invisible receipts and capital infl ows made the government lax about the widening merchandise trade defi cit. Now with the current account defi cit widening to dangerous levels, policy has shifted to wooing foreign capital at all costs and looking at options to control gold imports. The key to sustainability of the BOP lies in boosting manufactured exports and thereby containing the trade defi cit.

Assessing Financial Stability, June 2011

The third Financial Stability Report, prepared by the RBI, gives a positive assessment of the banking sector, but the report needs to be wide-ranging in its assessment and somewhat curiously it does not make price stability a priority for the financial sector.

Yield Spread as a Lead Indicator of Real Economic Activity

This paper provides evidence on the ability of the yield spread to predict industrial activity in India. The study also shows that the linkage demand for working capital responds to changes in yield spread, and that working capital makes a significant contribution to output generation. Thus yield spread could act as a lead indicator of industrial growth in the country.

Monetary Policy Underpinnings

The objective of this paper is to capture the historical perspective in respect of monetary policy underpinnings with particular reference to India, the limitations and constraints in pursuing monetary policy objectives and throw light on current mainstream economic thinking and perspective in the context of changing economic environment worldwide.


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