RBI Monthly Bulletin - October 2010By RBI
Tuesday, October 12, 2010
The Reserve Bank of India Bulletin is issued monthly by the Department of Economic Policy and Research. The issue includes recent speeches by management, articles on topical issues, various press releases, a list of regulatory and other measures, and foreign exchange developments. It also includes detailed statistics and list of publications.
The Reserve Bank’s October Monthly Bulletin (www.rbi.org.in/scripts/BS_ViewBulletin.aspx) carries six articles. Of particular note in this month’s issue, is the trend of India’s external debt, with tables and charts of various external debt indicators. Also in this issue is the results of the Reserve Bank’s inflation expectations survey of households in June 2010, which is done every quarter. The survey provides useful information on near-term inflationary pressures and, along with other economic indicators, serves as an indicator of future inflation. The Bulletin also includes an article on the revisions to the wholesale price index for more adequately capturing the current structure of the economy.
A brief description of each article is presented below.
1. Developments in India’s Balance of Payments during the First Quarter (April-June) 2010-11
This article provides details on developments in India’s balance of payments during April-June 2010 (Q1).
The higher trade deficit combined with the lower invisibles surplus widened the current account deficit during Q1. The capital account surplus increased significantly, over the corresponding quarter of last year, on account of short-term trade credit, external commercial borrowings, external assistance and banking capital. With capital account surplus being higher than the current account deficit, the overall balance was in surplus at US$ 3.7 billion.
2. India’s External Debt: Trend, Policy Changes and Cross-country Comparisons
India’s external debt, as of end-June 2010, was at US$ 273.1 billion. The article also provides tables and charts on various details on external debt such as External Debt Outstanding, External Debt by Component, Currency Composition, Instrument-wise classification, Short-Term Debt by Original Maturity and Residual Maturity and cross country comparisons of external debt of select developing countries etc.
The long-term debt at US$ 215.2 billion and short-term debt at US$ 57.8 billion accounted for 78.8 per cent and 21.2 per cent, respectively, of the total external debt. The article highlights India’s external debt as of end-June 2010, provides a cross-country comparison of external debt among select developing countries, reviews recent policy measures by the Reserve Bank and Government of India for effective management of external debt, and presents some observations on India’s external debt stock.
3. Inflation Expectations Survey Of Households; June 2010 (Round 20)
The Bank has been conducting inflation expectations survey of households (IESH) on a quarterly basis since 2005. The present article is based on the survey round 20 (quarter ended June 2010). Presently the survey is limited to households from four major metropolitan cities and eight other major cities. The major metropolitan cities, are represented by 500 households each while the eight other cities are represented by 250 households each.
This article presents the survey findings.. It gives respondents’ perceptions of current inflation as well inflation expectations for 3 months ahead (July-September 2010) and one year ahead (July 10-June 11).The survey findings indicate that households expect inflation to rise further by 30 and 80 basis points during next quarter (11.4 per cent) and next year (11.9 per cent) respectively from the expected current rate of 11.10 per cent.
Household’s expectations of general price rise is mainly influenced by movements in food grains prices. High price-rise is expected in food, housing prices and cost of service. On category–wise inflation expectations, housewives and daily-wage workers are comparatively more consistent in the inflation expectations.
4. New Series of Wholesale Price Index Numbers (Base 2004-05=100)
The series on Index Numbers of Wholesale Prices with base 1993-94=100 had been in use since April 2000.A Working Group was established for the revision of the WPI series (base 1993-94=100) on December 26, 2003 under the Chairmanship of Prof. Abhijit Sen, Member, Planning Commission. Based on the recommendations of the Working Group, the Ministry came out with the new series of Wholesale Price Index with the base year 2004-05=100 from August 2010, on September 14, 2010.
At the aggregate level, the price trend as well as inflation of new series (base 2004-05=100) is similar to those of the old series (base 1993-94). However, there are a number of significant changes in the new series in terms of weighting diagram, coverage, and price collection mechanism. There is a reduction in the weight of ‘Primary Articles’by 1.9 percentage points. On the other hand, weights of ‘Fuel and Power’ and ‘Manufactured Products’ have gone up by 0.7 percentage points and 1.2 percentage points, respectively. In terms of coverage, the number of commodities in the new series has gone up significantly to 676, as compared to 435 commodities of the earlier series. Further, in order to ensure a better representation of price, the number of price quotations has also increased significantly to 5482 from 1918 price quotations of the old series. The latest WPI revision to the base year 2004-05=100 is a welcome development and will be better representative of overall inflation of the economy.
5. International Trade in Banking Services: 2008-09
The survey on International Trade in Banking Services for the reference period 2008-09 was conducted by the Reserve Bank of India in continuation of earlier surveys for 2007-08 and 2006-07. The article based on the survey results is being published in October 2010 issue of RBI bulletin. The main findings of the survey are:
6. International Banking Statistics of India – December 31, 2009
International Banking Statistics (IBS) defined as banks’ on-balance sheet liabilities and assets vis-à-vis non-residents in any currency or unit of account along with such liabilities and assets vis-à-vis residents in foreign currencies or units of account comprises Locational Banking Statistics (LBS) and Consolidated Banking Statistics (CBS). The LBS are designed to provide comprehensive and consistent quarterly data on international banking business conducted inside the Bank for International Settlements (BIS) reporting area, while CBS provides data on international/foreign claims as per residual maturity and sector of borrower along with the exposures by country of immediate borrower and on the reallocation of claims (i.e. risk transfers) to the country of ultimate risk.
Locational Banking Statistics - International Liabilities
Locational Banking Statistics - International Assets
Consolidated Banking Statistics
Press Release : 2010-2011/514