Current Affairs

Current Affairs: December 2010

NATIONAL AFFAIRS

Mid-quarter policy review by RBI

In its mid-quarter policy review on December 16, 2010, the RBI announced a one per cent reduction in the statutory liquidity ratio (SLR) of commercial banks from 25 per cent to 24 per cent. The new SLR rates came into effect from December 18.

The apex bank also announced that repo rates and reverse repo rates would be held at 6.25 per cent and 5.25 per cent, respectively. The cash reserve ratio (CRR) of scheduled commercial banks will also remain unchanged at 6 per cent.

The announcement came amidst signs that inflation was showing signs of slowing even as a liquidity concern in the economy was on the rise. The RBI also announced a second auction for purchase of government securities in January 2011, under its open market operation (OMO), to improve banks’ liquidity.

The RBI increased repo and reverse repo rates six times in 2010, in a bid to rein in inflation.

India’s U-turn at Cancun Summit

In an effort to break a deadlock in negotiations to save the planet from overheating, India’s Union Minister of State Jairam Ramesh discarded overnight India's policy of two years on global climate change. It's a move that will likely win India international acclaim, but Ramesh must now prepare for fierce domestic criticism of his new stand that the country is willing to accept legally binding commitments in place of its oft-repeated policy of only voluntary action to cut greenhouse-gas emissions.

"All countries must agree to a legally binding commitment under an appropriate legal form," Ramesh said as he surprised his own negotiators at the 16th Global Climate Summit, held in December in Cancun, Mexico..

The statement was not part of the minister's prepared speech, which he read at the plenary of the UN Framework Convention on Climate Change, as the summit is officially called. The UPA government had assured the Parliament India's position of refusing any legally binding...