India : Second Advance estimates released by Central Statistics Office (CSO) projects the growth of Gross Domestic Product (GDP) to be 6.6 per cent in 2017-18.
The Reserve Bank of India has reduced the Policy Repo rate by 200 basis points beginning 2015. The Monetary Policy Committee (MPC) in its sixth bi-monthly monetary policy statement of February 7, 2018 noted that the economy is on a recovery path, including early signs of a revival of investment activity. Global demand is improving, which should help strengthen domestic investment activity. The focus of the Union Budget on the rural and infrastructure sectors is also a welcome development as it would support rural incomes and investment, and in turn provide a further push to aggregate demand and economic activity. The CSO has revised the GDP growth upwards for 2017-18 from 6.5 per cent in First Advance Estimates to 6.6 per cent in Second Advance Estimates.
According to the Reserve Bank of India, there is no shortage of systemic liquidity. As mentioned in the sixth bi-monthly statement The liquidity in the system continues to be in surplus mode, but it is moving steadily towards neutrality. The weighted average call rate (WACR) traded 12 basis points (bps) below the repo rate during December-January as against 15 bps below the repo rate in November. During the two weeks beginning December 16, 2017, the Reserve Bank injected average daily net liquidity of Rs. 388 billion into the system. For December as a whole, however, the Reserve Bank absorbed Rs. 316 billion (on a net daily average basis). As the system turned into deficit again in the fourth week of January, the Reserve Bank injected average net liquidity of Rs. 145 billion. For January, on the whole, the Reserve Bank absorbed Rs. 353 billion (on a net daily average basis).
In order to ensure orderly market movement and to curb excessive volatility, SEBI and Stock Exchanges have put in place surveillance mechanism to monitor the trading in stock exchanges. Further, SEBI maintains constant vigil in the market, and in case of any abnormality, takes appropriate action against the concerned entities. The systems and practices are in place to promote a safe, transparent and efficient market and to protect market integrity. The systems instituted include advanced risk management mechanisms comprising continuous monitoring and surveillance, various limits on positions, margin requirements, circuit filters, etc. The systems and practices are reviewed continuously and modified to meet emerging needs. SEBI monitors trading activities in addition to overseeing the surveillance functioning of the exchanges. Any aberration noted in the trading activity is examined by SEBI. Additionally, reports received from exchanges and complaints received are examined by SEBI. Whenever any violation of SEBI rules and regulations is observed, appropriate action as warranted is taken by SEBI against concerned entities. SEBI has also been conducting regular meetings with officials of the stock exchanges and depositories and they have been advised to step up their own surveillance measures and to initiate expeditious demonstrative action wherever warranted so as to protect investors interest and ensure orderly functioning of the stock market. Further, SEBI, from time to time, has prescribed various measures for ensuring orderly market movements and to curb excessive volatility. In addition, the Stock Exchanges seek clarifications from the listed companies on various price sensitive corporate news items appearing in the media and the same is disseminated to the market on the website of the Exchanges.
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