CMA Gul S
NEW DELHI: As Sensex continued its upward march on Friday, touching a new high of 17,361.47 points before closing at 17,291.10, finance minister P Chidambaram urged investors to adopt a cautious approach. “My advice to investors is that they should do their homework. And if they cannot do their homework, they should trust those (mutual funds) who do their homework. And for speculators, I have no advice,” he said.
The market has risen for nine days in a row, and the Sensex has added 1,787 points in its fastest-ever rally. Asked if the market movement was orderly, he said: “That is what Sebi is saying.”
Mr Chidambaram met the Reserve Bank governor YV Reddy in the backdrop of rupee’s persisting appreciation against the dollar. On the rising rupee’s impact denting exports, the finance minister has already hinted at more sops for exporters.
There was no official word on what transpired at the meeting between the minister and the RBI chief. Mr Chidambaram, who returned from his US visit in the morning, is understood to have discussed the monetary situation in detail with the governor with whom his meeting lasted for more than an hour.
“Monetary policy is the province of the Reserve Bank of India. Even if I give advice which I rarely do, I would give it privately to the governor (of RBI),” the minister had said in the US.Bankers, economists and industry, all expect some indication from the central bank on lowering of interest rates, when it presents its half-yearly monetary policy on October 30.
Mr Chidambaram had expressed concerns over the rapid appreciation of the rupee against the dollar and said the central bank may have to intervene. “Exporters have been taken by surprise. We offered them a package a couple of months ago, but if that is not adequate then we would have to think of ways and means by which they can be given a helping hand to tide over the rest of the year,” Mr Chidambaram had said in Washington.
The rupee which had touched a nine-year high of Rs 39.875 to dollar on September 20, a day after US Fed rate cut, closed at 39.75 on Friday.Besides intervening in the currency markets, the central bank has taken various measures to control liquidity in the market. This week, it further liberalised overseas investment norms and hiked the ceiling for mutual funds from $4 billion to $5 billion. It also raised limit for the early repayment of foreign debt and relaxed the investment cap for companies.
To control the flow of funds into the country, RBI has already tightened external commercial borrowing route. The government has also decided to keep the annual cap at $22 billion, which is the same as last fiscal. Unprecendented exuberance of equity markets and differential in interest rates have been attracting flow of foreign funds. It will have to be seen as what moves will the central bank now make to address the situation.
The market has risen for nine days in a row, and the Sensex has added 1,787 points in its fastest-ever rally. Asked if the market movement was orderly, he said: “That is what Sebi is saying.”
Mr Chidambaram met the Reserve Bank governor YV Reddy in the backdrop of rupee’s persisting appreciation against the dollar. On the rising rupee’s impact denting exports, the finance minister has already hinted at more sops for exporters.
There was no official word on what transpired at the meeting between the minister and the RBI chief. Mr Chidambaram, who returned from his US visit in the morning, is understood to have discussed the monetary situation in detail with the governor with whom his meeting lasted for more than an hour.
“Monetary policy is the province of the Reserve Bank of India. Even if I give advice which I rarely do, I would give it privately to the governor (of RBI),” the minister had said in the US.Bankers, economists and industry, all expect some indication from the central bank on lowering of interest rates, when it presents its half-yearly monetary policy on October 30.
Mr Chidambaram had expressed concerns over the rapid appreciation of the rupee against the dollar and said the central bank may have to intervene. “Exporters have been taken by surprise. We offered them a package a couple of months ago, but if that is not adequate then we would have to think of ways and means by which they can be given a helping hand to tide over the rest of the year,” Mr Chidambaram had said in Washington.
The rupee which had touched a nine-year high of Rs 39.875 to dollar on September 20, a day after US Fed rate cut, closed at 39.75 on Friday.Besides intervening in the currency markets, the central bank has taken various measures to control liquidity in the market. This week, it further liberalised overseas investment norms and hiked the ceiling for mutual funds from $4 billion to $5 billion. It also raised limit for the early repayment of foreign debt and relaxed the investment cap for companies.
To control the flow of funds into the country, RBI has already tightened external commercial borrowing route. The government has also decided to keep the annual cap at $22 billion, which is the same as last fiscal. Unprecendented exuberance of equity markets and differential in interest rates have been attracting flow of foreign funds. It will have to be seen as what moves will the central bank now make to address the situation.
CAclubindia
