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Credit & Monetary Policy: Well, i hate to say we said it!

Though frankly, it would take a lot to get me saying this aloud, having felt left out after having suggested never upping SLR a year earlier. Both Brazil and China are earning accolades in the mean time for highly tight monetary policy and reaping economic successes from the same with bank reserves of just 15%. India however has not upped interest rates at the pace we suggested either. It just seems a one way street with only the Economic Advisory Committee holding forth on policy with RBI itself embroiled in conservative steps that wish inflation down and suffering from ordinances and other as the MoF holds forth.

And I am personally not a top 1% equities trader either because of the lack of access to information and being just a supplier of trends into the market machine so personal income is more of a worry for me right now for the last one year. however, that personal comment comes from going on with incisive analysis as times get more worrisome for policy makers and planners. we do not have many options left. But the ones hoping for a 50 bps CRR hike and Repo hike are frankly just hoping in vain. Markets of course are at a good situation to absorb the bad news, India’s growth trajectory intact and promising to reach the ever elusive double digits and Manmohan Singh is happier with a lower y-o-y inflation trending in

Inflation could take you for a merry ride for years as your currency does not have any staying power in the global market and that should not just be a cause for celebration for those hoarding dollars. A vibrant market in rupee dollar would maybe get Mr Aziz into the curve and hit the spot for him at JP Morgan but we could potentially spiral down to 60 or worse down the table with capital convertibility. What gives?

India is doing well of course and we will carry the Hindu gene in our growth pangs well into the twenties, let alone the teens. But because that is a conclusion I just reached after a meandering economic flat in the plains of yore, I am not inclined to hold further analysis on the subject. What maybe we guys need is let interest rates climb into the high 20s as some fixed income camps in the country want and just stay with economic activity that pays.

However, we also have the global proclivity for lesser jobs going around and more politicians too so I don’t know what this piece of writing is likely to be worth and after scoring $16.9 billion in monthly exports and outscoring imports by 7% we are certainly fighting oil inflation again in 3 months and suffering from a hedonistic oil bill.

Have this Monday on us. Drive to work on a camel, and think about those trading away each tick without fear or favor in bonds, equities, commodities and econometrics that drive silly poor struggles in armchair troops of this really intensive sky.

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This entry was posted on July 25, 2010 by in Amitonomics, Financial Markets.

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