Inflation rate slips to 11.80%, RBI cuts CRR by 150bps, IIP dn to 1.3 percent

Inflation rate slips to 11.80%
Inflation falls to 11.8%
Inflation at 11.80%; down from 11.99 WoW

Inflation inched down to 11.80 per cent for the week ending September 27, compared to 11.99 per cent in the week before.
The rate was below a median forecast of 11.98 per cent in a Reuters poll of analysts.

Inflation for the week ended August 2 was revised up to 12.91 per cent from 12.44 per cent.
The annual inflation rate was 3.36 per cent during the corresponding week of the previous year.

The wholesale price index is more closely watched than the consumer price index, which is published monthly, because it covers more number of products and is released weekly.
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RBI cuts CRR by 150bps, to inject Rs 60,000cr tomorrow
RBI cuts CRR by another 100 bps
RBI cuts CRR to 7.5%
Factoring in the deterioration in the global financial environment, the Reserve Bank of India (RBI) today announced an additional 100 basis point reduction in the cash reserve ratio (CRR), or the proportion of deposits banks set aside. The move is aimed at injecting more liquidity into the system

On Monday, RBI had announced a 50 basis point reduction in CRR. Now, the CRR will fall to 7.5 per cent of the net demand and time liabilities, against 9 per cent at present, from the fortnight starting tomorrow. With today’s move, RBI said, Rs 60,000 crore will be injected into the system, instead of Rs 20,000 crore due to the 50 basis point cut announced earlier.
“This measure was undertaken with a view to injecting liquidity into domestic financial markets so as to alleviate the pressures brought on by the deterioration in the global financial environment. In the ensuing days, the global situation has worsened further. International stock markets and money markets had been adversely affected in a significant manner. Central banks across the world have responded to these extraordinary developments by synchronised policy actions including measures for liquidity infusion,” RBI said in a statement this morning.
In a coordinated move the US Federal Reserve, Bank of England, the European Central Bank and the Chinese central bank had lowered interest rates on Wednesday in the wake of the global financial turmoil.
In India, the call rates have stayed in double-digit zone. Rates had touched a high of 17 per cent following the payment of advance tax by companies. Today, according to data on the Clearing Corporation of India website, at 11.30 AM, the weighted average call rate was 19.77 per cent, with rates in the range of 11-23 per cent.
The cut, however, failed to cheer the stock markets, with the BSE Sensex 805 points down at 10,521 at noon. According to Bloomberg data, the rupee fell to an all-time low of 49.26 against the US dollar as foreign institutional investors have been pulling out money from the Indian stock markets.
The statement said that RBI is ready to respond swiftly to meet any liquidity requirements that may arise in the context of the highly volatile external situation. “The Reserve Bank is monitoring developments closely and continuously and would respond swiftly and even preemptively to any adverse external developments impinging on domestic financial stability, price stability and inflation expectations and the continuation of the growth momentum of the Indian economy. The Reserve Bank is committed to maintaining financial stability and active and flexible liquidity management using all policy instruments is an integral part of this objective,” the press release said.
In addition, it sought to comfort the market by saying that the macroeconomic fundamentals of the Indian economy remained “strong and resilient and that India's financial system is sound, well-capitalised and well-regulated”. It added, “Money and forex markets in India have been operating in a relatively orderly manner. The current domestic market conditions are essentially a reflection of the adverse developments and extreme uncertainty in international financial markets.”
RBI had not cut CRR since June 2003, when it was lowered 25 basis points to 4.50 per cent. The 150 basis point reduction is the steepest since 2001.
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Industrial growth slumped to 1.3% from 10.9% in August
Aug infrastructure output up 2.3 pc
August IIP at 1.3% vs 10.9% a year ago
Industrial growth nosedives to 1.3%

NEW DELHI: India's industrial growth slumped to 1.3 per cent in August this year, compared to a 10.9 per cent growth in August 2007, the government announced here Friday.

The figure was well below a forecast for growth of 6.1 per cent in a Reuters poll of economists. Output growth has fallen from the double-digit levels seen early last year as tight monetary policy and a stronger rupee lowered demand in the economy. Manufacturing production rose 1.1 per cent in August from a year earlier. Industrial output rose 8.1 percent in fiscal 2007/08 (April-March), compared with 11.6 percent in 2006/07.


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Source: ET,Sify,BS etc