Press Release RBI Working Paper Series No. 07 Concentration, Competition and Soundness of the Banking System in India Pradip Bhuyan@ Abstract 1 This paper examined certain important aspects of concentration, competition and soundness of banks during the period from 1994-95 to 2019-20. Herfindahl-Hirschman Index suggested that the banking system in India did not have a high degree of concentration during the study period. Application of the Martinez-Miera and Repullo (

Press Release RBI Working Paper Series No. 05 Quantifying Survey-based Qualitative Responses on Capacity Utilisation – An Analysis for India G.P. Samanta and Sayantika Bhowmick@ Abstract *This paper examines the comparative utility of qualitative information collected on capacity utilisation (CU) through the Industrial Outlook Survey (IOS) of the Reserve Bank of India (RBI). The IOS, inter alia, collects two types of qualitative responses on CU: assessment for the sur

Press Release RBI Working Paper Series No. 03 India’s External Commercial Borrowings: Determinants and Optimal Hedge Ratio Ranjeev@ Abstract *This paper examines the determinants of External Commercial Borrowings (ECBs) raised by firms in India and identifies an optimal hedge ratio for the ECBs portfolio. It finds that domestic economic activity and movements in the exchange rate of the Indian rupee are the two major factors influencing the ECBs issuance. Depreciation

Press Release RBI Working Paper Series No. 04 States’ Fiscal Performance and Yield Spreads on Market Borrowings in India Ramesh Jangili, N.R.V.V.M.K. Rajendra Kumar and Jai Chander@ Abstract*State governments are borrowing significantly from the market to meet their budgetary requirements. As investors are risk-conscious, fiscal fundamentals may impact the yields, and states’ borrowing costs. Indicator-based assessment of the states’ performance is cumbersome, keeping

Press Release RBI Working Paper Series No. 02 Taking Cognisance of Households’ Inflation Expectations in India Devendra Pratap Singh, Aditya Mishra and Purnima Shaw@ Abstract *The paper studies the characteristics of inflation expectations in developed and emerging market economies. We find that the properties of inflation expectations in India share similarities to those in other economies, such as exhibiting weak rationality (by failing both the unbiasedness and eff

Press Release RBI Working Paper Series No. 01 Stock Price Reaction on the Announcement of Basel Implementation: Evidence from Indian Banks Gaurav Seth, Supriya Katti and B.V. Phani@ Abstract * The study evaluates the market reaction to the Reserve Bank of India’s policy decisions related to aligning its domestic banking regulations with global Basel capital adequacy norms. Using event study methodology, the study finds that in the initial phase, the Indian banks were

Press Release RBI Working Paper Series No. 05 Reassessing Investment Dynamics – Newer Insights into Leverage and Investment of the Indian Corporate Sector Deba Prasad Rath and Sujeesh Kumar@ Abstract * Given the criticality of investment in achieving durable growth in the context of ongoing subdued investment, globally as well as in India, this paper revisits investment dynamics in India from the standpoint of the ‘augmented accelerator’ hypothesis and examines whethe

Press Release RBI Working Paper Series No. 06 An Alternative Perspective on Demand and Supply to Forecast Inflation Saurabh Sharma and Ipsita Padhi@ Abstract *Measuring macroeconomic demand and supply is important for a variety of reasons and is especially useful for gauging inflationary pressures. In this context, this paper departs from the standard Blanchard-Quah technique and proposes a novel identification strategy to extricate demand-supply from the business cyc

Press Release RBI Working Paper Series No. 04 Does Offshore NDF Market Influence Onshore Forex Market? Evidence from IndiaHarendra Behera, Rajiv Ranjan and Sajjid Chinoy@ Abstract*The paper uses a VECM-MGARCH approach to examine the interrelationship between onshore and offshore NDF markets for the Indian Rupee in view of price discovery, mean and volatility spillovers. The empirical results suggest a stable long-run relationship between onshore and NDF markets with p

Press Release RBI Working Paper Series No. 03 Monetary Policy Transparency and Anchoring of Inflation Expectations in India G. P. Samanta and Shweta Kumari@ Abstract * This study provides a measure of the degree of monetary policy transparency in India using text-mining techniques and, examines the impact of transparency on anchoring of inflation expectations. Inflation expectations are sourced from two RBI surveys - Survey of Professional Forecasters and Survey of In