JULY 16- Asserting that rupee price will be market determined, Finance Minister P. Chidambaram on Tuesday said last night’s measures by the Reserve Bank have nothing to do with the upcoming monetary policy review and may not impact interest rates of banks.
RBI’s measures, he said, were aimed at checking excessive volatility and speculation in the forex market.
“These measures (RBI decisions) should not be read as prelude to any policy rate changes. This has nothing to do with upcoming policy review of RBI…I don’t expect banks to increase interest rates as a result of yesterday’s measures” Chidambaram said at a press conference.
RBI last night announced a slew of measures like raising cost of borrowing by banks by 2 per cent to 10.25 per cent and announcing sale of bonds worth Rs.12,000 crore through open market operations to suck liquidity to check rupee slid, which had earlier in the month touched a all low of 61.21 to a dollar.
“Measures are taken to curb excessive speculation and reduce volatility and stabilise the rupee,” Chidambaram added.
The value of rupee, he said, will depend upon “how much foreign exchange we earn and how much foreign exchange we spend”
Here are the highlights of Chidambaram’s press conference:
– All LPG consumers to get subsidy in banks accounts through DBT by end of year: Chidambaram.
– Rail tariff authority to be set up soon: Chidambaram.
– Another round of telecom spectrum auction to be held shortly: Chidambaram.
– This fiscal India will be growing at 6 per cent, or slightly higher: Chidambaram.
– We hope to get bills on real estate, land acquisition and street vendors passed in Monsoon Session of Parliament: Chidambaram.
– RBI measures intended to quell excessive speculation, reduce volatility in foreign exchange market and stabilise rupee: Chidambaram.
– I don’t expect banks to increase interest rates as a result of RBI measures announced yesterday: Chidambaram.
– RBI measures should not be read as prelude to policy interest rate change: Chidambaram.
– Food Security Ordinance will be the first item to be taken up in Monsoon session beginning August 5: Chidambaram.
– Rupee will find its level depending upon foreign exchange we earn and spend: Chidambaram.
– Official amendments to the DTC will be introduced in Parliament towards end of Monsoon Session: Chidambaram.
– Not possible to ban import of gold: Chidambaram.
