Although it was the first day at work for new Reserve Bank of India (RBI) governor Urjit Patel, his former boss and outgoing central bank chief Raghuram Rajan continued to grab headlines.
A day after he stepped down, Rajan warned that low interest rates globally could distort markets and may be tough to get rid of. This comes even as the central bank paid the central government a dividend of $10 billion for 2015-16, matching the previous year’s record, thanks to rising foreign exchange reserves, a Bloomberg report said.
That the central bank matched last year’s payout is certainly the high Rajan would have hoped to exit on, considering how controversial his three-year tenure was.
Rajan may have warned of the perils of a low interest rate regime, but the stock markets seemed to buy none of that, as they cheered the fact that slower-than-expected US jobs growth will ease fears of a rate hike by the Federal Reserve later this month.
The BSE Sensex on Tuesday zoomed 1.56% to close at 28,978, the highest since 13 April 2015. Tata Motors, Tata Steel, Asian Paints and Axis Bank gained the most.
Meanwhile, the G20 summit ended on Monday with Prime Minister Narendra Modi asking the leaders of the top 20 economies to eliminate safe havens for economic offenders and urged them to crack down on the corrupt. “We need to act to eliminate safe havens for economic offenders, track down and unconditionally extradite money launderers and break down the web of complex international regulations and excessive banking secrecy that hide the corrupt and their deeds,” Modi reportedly said.
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