Monetary Policy and Current Affairs of August - 2010

First Quarter Review of Monetary Policy 2010-11:

Monetary policy is the process by which the government, central bank of a country controls (i) the supply of money, (ii) availability of money, and (iii)cost of money or rate of interest, in order to attain a set of objectives oriented towards the growth and stability of the economy.

As expected, RBI has raised the policy rates in the first quarter review of monetary policy on 27-07-2010. This is the fourth rate hike since March this year raising the Repo by a total of 100 bps and Reverse Repo by 125 bps.

Highlights of the policy:

·        Repo rates hiked by 25 bps to 5.75% with immediate effect.

·        Reverse Repo rates hiked by 50 bps to 4.50% with immediate effect.

·        CRR, SLR and Bank rate kept unchanged at 6%, 25% and 6%, respectively.

·        Estimated for GDP growth for 2010-11 revised to 8.5% from 8%.

·        Inflation projection for March 2010 increased to 6% from 5.5%.

The next mid-quarter review of Monetary Policy for 2010-11 will be announced through a press release on September 16, 2010.

The second quarter review of Monetary Policy 2010-11, including developmental and regulatory policies, is scheduled on November 2, 2010.

August Current Affairs:

·        China has eclipsed Japan as the world's second-biggest economy after three decades of blistering growth that put overtaking the U.S. in reach within 10 years.

·        Former Union Power Secretary Harishankar Brahma has been appointed as the Election Commissioner in the Election Commission of India.

·        Britain’s Andy Murray won the 2010 Rogers Cup over Roger Federer 7–5, 7–5 on Sunday in Toronto.

·        The President Mrs. Pratibha Devisingh Patil this evening conferred the prestigious Best Parliamentarian Awards to Priya Ranjan Dasmunsi, Mohan Singh and Dr. Murali Manohar Joshi at an impressive function in the Central Hall of Parliament. The Awards were given for the year 2007, 2008 and 2009 respectively for their outstanding contributions to parliamentary debates.

·        Former Lok Sabha Speaker Somnath Chatterjee's book, "Keeping the Faith: Memoirs of a Parliamentarian", which was released by Prime Minister Dr. Manmohan Singh.

·        The Centre cleared for implementation the Rajiv Gandhi Scheme for Empowerment of Adolescent Girls — known as ‘Sabla' — aimed at enhancing their nutritional and economic status. The scheme will be run along with the Integrated Child Development Services (ICDS) project in anganwadi centres in 200 select districts, targeting girls in the age group 11-18.

·        Senior IPS officer R K Medhekar will be the new Director General of elite commando force -- National Security Guard. Medhekar, a 1975 batch officer of Kerala cadre, currently serving as Special Director General of Border Security Force. He will take over from 1972 batch IPS officer N P S Aulakh.

·        Vineet Jain, Managing Director, The Times of India (TOI) Group, has been elected as the new chairman of Press Trust of India (PTI), the leading news agency of India. Jain succeeds Vjiay Kumar Chopra, Editor, Punjab Kesari Group.

·        Union Minister of State for Environment and Forests Jairam Ramesh launched the Green Action for National Dandi Heritage Initiative(GANDHI) project in the historic coastal village in south Gujarat. It was at Dandi that Mahatma Gandhi launched his salt Satyagraha 80 years ago.

·        The postal department released a stamp(of Rs.5) in Visakhapatnam to commemorate the first death anniversary of the former chief minister late Y.S. Rajasekhar Reddy.