Press Release RBI Working Paper Series No. 04 Quantifying the Cyclically Adjusted Fiscal Stance for India @Sangita Misra and Saurabh Ghosh Abstract Taking cue from recent debate in the literature, we attempt to disentangle cyclically adjusted fiscal balance (CAB) for India using methodology recommended by the IMF manual and a range of potential output estimates. Our results indicate that after initial success in containing CAB, it has increased considerably during the

Press Release RBI Working Paper Series No. 03 Re-emerging Stress in the Asset Quality of Indian Banks: Macro-Financial Linkages @Shashidhar M. Lokare Abstract 1In a bank-based economy, sound health of the banking system is an imperative for efficient financial intermediation in the context of overall development and financial stability. In the post- global crisis period, the Indian banking system, has suffered growing impairment of asset quality. This paper explores t

Press Release RBI Working Paper Series No. 2 Net Stable Funding Ratio – An Estimate for Scheduled Commercial Banks in India @P. Bhuyan & A.K. Srimany Abstract 1Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) are two new liquidity ratios introduced by Basel Committee on Banking Supervision (BCBS) to address the problem of liquidity in the aftermath of the crisis that began in 2007. While the LCR tells about resiliency of a bank in short term, NS

Press Release RBI Working Paper Series No. 01 Global Liquidity, Financialisation and Commodity Price Inflation @Kumar Rishabh and Somnath Sharma Abstract 1 We review the role of the factors, identified in the literature, behind the global commodity inflation, viz. emerging market demand, speculation led by financialisation and easy global liquidity. This paper contributes to the existing literature on the issue in two ways. First, following BIS (2011), the distinctio

Press Release RBI Working Paper Series No. 11 Non Deliverable Forward and Onshore Indian Rupee Market: A Study on Inter-linkages@Rajan Goyal, Rajeev Jain and Soumasree Tewari Abstract 1The study examines the inter-linkages of onshore segments of India’s foreign exchange market with Non-Deliverable Forwards (NDF) market for Indian rupee (INR) for a sample period of June 6, 2006 to April 3, 2013. The study period is divided into four sub-periods based on appreciating/de

Press Release RBI Working Paper Series No. 10 Net Interest Margin, Financial Crisis and Bank Behavior: Experience of Indian Banks @Tushar B. Das Abstract 1The global financial crisis that jeopardized the advanced economies is perceived to have had a limited impact on Indian banking system. However, the effect was so severe that the advanced economies are still struggling to achieve stability. In this paper, we attempted to analyze the impact of the financial crisis o

Press Release RBI Working Paper Series No. 09 Corporate Pricing Power, Inflation and IIP Growth: An Empirical Investigation @Angshuman Hait, Joice John, Abhiman Das and Anujit Mitra Abstract 1Pricing power measures the extent to which a business can pass on the increases in input costs to consumers through increases in the prices of finished goods. The corporate pricing power in India has declined since 2009-10:Q1. Production has also fallen sharply since 2010-11:Q3.

Press Release RBI Working Paper Series No. 08 Macroprudential Regulation and Bank Performance: Evidence from India @Saibal Ghosh Abstract: 1Employing data on Indian banks for 1992-2012, the article examines the impact of macroprudential measures on bank performance. First, it finds that state-owned banks tend to have lower profitability and soundness than their private counterparts. Next, it tests whether such differentials between state-owned and private banks are dr

Press Release RBI Working Paper Series No. 07 Size of Government Expenditure Multipliers in India: A Structural VAR Analysis @Rajeev Jain and Prabhat Kumar Abstract 1A structural vector autoregression (SVAR) framework has been used to estimate the size of government multiplier at the level of Central and the State governments in India. As a priori expected, capital outlay is found to be more growth inducing than the revenue expenditure. Since the revenue expenditure a

Press Release RBI Working Paper Series No. 06 An Empirical Analysis of the Relationship between WPI and PMI-Manufacturing Price Indices in India@Jeevan Kumar Khundrakpam and Asish Thomas George Abstract *Manufacturing Purchasing Managers Index (PMI) has been increasingly used by various central banks for assessing the direction and strength of economic activity. One of the sub-indices or component level information provided by PMI is that of industrial input and outp