Global Economy and RBI moves for Indian economy:
The central bank- RBI- has been regularly conducting the Consumer Confidence Survey (CCS) and the Inflation Expectations Survey of Households (IESH).
The Reserve Bank of India (RBI) on Friday announced the launch of the latest round of its surveys to capture consumer confidence and inflation expectations from households, which are useful inputs for monetary policy. The central bank has been regularly conducting the Consumer Confidence Survey (CCS) and the Inflation Expectations Survey of Households (IESH).
The results of these surveys “provide useful inputs for monetary policy”, .. the RBI said while announcing the launch of September 2020 round of CCS and IESH through two statements.
The next meeting of the RBI governor-headed Monetary Policy Committee (MPC) is scheduled for September 29-30 and October 1, 2020 wherein Policy rates will be decided which will have impact on Bourses.
The CCS survey seeks “qualitative responses” from households, regarding their sentiments on general economic situation, employment scenario, price level, households’ income and spending.
The survey is conducted regularly in 13 cities — Ahmedabad, Bengaluru, Bhopal, Chennai, Delhi, Guwahati, Hyderabad, Jaipur, Kolkata, Lucknow, Mumbai, Patna and Thiruvananthapuram. The survey covers about 5,400 respondents across 13 cities.
The IESH survey aims to capture subjective assessments on price movements and inflation, of about 6,000 households, based on their individual consumption baskets, across 18 cities.
The cities covered in this survey are: Ahmedabad, Bengaluru, Bhopal, Bhubaneswar, Chandigarh, Chennai, Delhi, Guwahati, Hyderabad, Jaipur, Kolkata, Lucknow, Mumbai, Nagpur, Patna, Raipur, Ranchi and Thiruvananthapuram.
The (IESH) survey seeks qualitative responses from households on price changes (general prices as well as prices of specific product groups) in the three-month ahead as well as in the one year-ahead period,” the RBI said. The survey also seeks quantitative responses on current, three-month ahead and one-year ahead inflation rates.
The studies will be conducted by a Mumbai-based agency on behalf of the RBI over telephone (instead of the regular personal interview mode) in view of the COVID-19 pandemic.
The global economy is in recession, and it is predicted to be more destructive than the Great Depression of 1929 and the Global Financial Crisis (GFC) of 2007. India too has been hit hard – tens of millions have lost their jobs, and the economy is projected to shrink by 4-9% in 2020-21. The last time the Indian economy contracted by more than 5% was in 1979 when the entire country was devastated by a once in a century drought (and some regions with floods). So it appears that it will take more time to get the economic wounds healed and the recovery process may take time as the vicissitudes of pandemic virus is a great challenge.
Gold and Silver prices are in decline from the peak. The khariff season of Agriculture has been encouraging and the produce is expected to see bumper crops this time. RBI will announce its policy rates in Sep end. GST meet will decide about the reduction in slab rates for Auto sector.
So the coming week will see a highly volatile and turbulent movements in the bourses as both positive and negative news are in offing.Hence Investors are advised to take a note of this while taking positions in the market this week.
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