(The views expressed in this column are the author’s own and do not represent those of Reuters)

The rupee has been uneasy and the stock market nervous since the beginning of this year. The two are not unrelated. For, the fall of the market has been due to absence of FII investment which also deprived the currency market of dollar supply. The outflows more or less matched the inflows and the rupee, with corresponding fluctuations, ended up in August where it had started in January.

(The views expressed in this column are the author’s own and do not represent those of Reuters)

It was S&P that took the lead and downgraded the U.S. with a ‘negative outlook’. The other rating agencies are not comfortable either with the current debt and fiscal status of the U.S. government and may only confirm later what S&P has already done now.

(The views expressed in this column are the author’s own and do not represent those of Reuters)

On July 24, 1991 India became a different place for business. The economy was opened though not as much from conviction as necessity. But once started, reforms had to be followed through whichever the party in power.

(The views expressed in this column are the author’s own and do not represent those of Reuters)

Last time it was really hefty. The RBI administered a double dose of 0.5 percent when on the previous nine occasions it was content with half that hike. What prompted the RBI was the reluctance on the part of inflation to move down — the central bank had thought it could be engineered with a higher dose.

(The views expressed in this column are the author’s own and do not represent those of Reuters)

The imbalance in returns on equity and debt has caused a change in the flow of funds. Last year, the funds flow was from debt to equity. That flow has reversed from equity to debt and will make a huge difference to the funding of the corporate sector.

(The views expressed in this column are the author’s own and do not represent those of Reuters)

This was not unexpected. The RBI has taken every care to cool down the economy with successive increases in interest rates. The results are now beginning to show.

(The views expressed in this column are the author’s own and do not represent those of Reuters)

Industrial growth had slowed down since September 2010 to nearly 3 pct with some improvement in March this year. There are reasons why performance had been uneven though there are also reasons why growth will pick up in future.

(The views expressed in this column are the author’s own and do not represent those of Reuters)

For nearly nine weeks now, the market has been entertaining the bears with the Sensex dropping 1,456 points. That was not a delayed reaction to the Budget. On the contrary, the market had responded well with a 9 pct jump in March. Obviously, there were other things that went wrong.

(The views expressed in this column are the author’s own and do not represent those of Reuters)

The Reserve Bank of India (RBI) increased the repo rate by 50 bps on May 3 and there was an outburst of opinions that the rate of GDP growth will drop. The consensus seemed to be that it would drop to 8 pct, a 100 bps less than what we had been used to.

Of course, May 3 was the first time in two years that the RBI raised the repo rate by a hefty 50 bps. In the earlier eight installments, the increase was only 25 bps.

(The views expressed in this column are the author’s own and do not represent those of Reuters)

The RBI must have been fairly exasperated with the country’s stubborn inflation which, in spite of the 2 percent increase in repo-rate in eight installments, did not at all budge. A bold approach has been made this time with 50 bps increase in repo rate in the hope that inflation will ease.