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Professor of Financial Economics and Part-time Value Investor, Transfin.
Jan 1, 1970 12:00 AM 3 min read


Retail inflation rises to 7.35% in December.

Out of Control: Retail inflation in India rose to 7.35% in December (breaching RBI's medium-term target of 4%) vs 5.54% in November and 2.11% in December 2018. Business Today


Once promising economies such as Mexico, Brazil, or Turkey could never break into the ranks of rich nations. Unfortunately, they fell into what economists call the “middle-income trap.” Coined in 2006 by World Bank economists Indermit Gill and Homi Kharas, the term refers to a sustained economic slowdown following a period of strong growth.


Is India, which began sprinting towards the goal of a high-income economy after economic liberalisation in the 90s, headed for such a trap? Read in full here.  


India's 10-year bond yield spikes to 6.68% as retail inflation rises. 

Red Arrow Pointing Up: The yield on India's 10-year government bond surged 10bps to hit a five-week high today following a spike in India's retail inflation, deepening worries of a prolonged pause in rate cuts by the RBI. 


FYI: Bond yield and prices move in opposite direction. Livemint


Wholesale inflation in India rises to 2.59% in December.

Flaring Up: Wholesale prices-based inflation in India rose to 2.59% in December vs 0.58% in November on the back of increasing prices of food articles.


Food inflation rate rose to 13.24% during December vs 11% in the previous month. Within this category, onions saw an inflation rate of 455.8% compared to 172.3% in November. NDTV Profit


Michael Patra appointed as the Deputy Governor of the RBI.

New Boss in Town: The Government today appointed Michael Debaprata Patra as the Deputy Governor of the RBI for a duration of three years, nearly six months after former Deputy Governor Viral Acharya’s pre-mature resignation.


Patra currently serves as an Executive Director at the RBI. 


The Central Bank currently has three Deputy Governors - NS Vishwanathan, BP Kanungo and MK Jain. Financial Express



Debit, credit cards to be disabled for online transactions if not used before, mandates RBI.

Who Moved My Card?: In a bid to enhance the security features of debit cards and credit cards, the RBI has mandated that while issuing and reissuing debit and credit cards, banks must ensure that all debit cards and credit cards are enabled only for domestic transactions at ATMs and point of sale (PoS) terminals.


If customers want to use their cards for online transaction, international transactions and contactless transactions, they have to separately apply for these services. If any individual has not used his or her cards for online transaction, international transactions and contactless transactions before, their card will be disabled for these services, RBI noted. Financial Express



US, China sign massive purchases deal but US tariffs remain.

Rejoice...: The US and China have signed Phase One of a trade deal which is expected to see sharp increases in sales of US goods and services to China. The eight-part agreement will also see Beijing further open its markets to foreign firms and agree to new protections for trade secrets and intellectual property. This represents a truce in a two-year trade war that has roiled global markets and businesses.


...For Now: But the deal leaves in place US tariffs on about $370bn of Chinese goods - ot three-quarters of Chinese imports to the US. Possible tariff reductions will be left to later negotiations, which will cover many controversial issues like Chinese subsidies to domestic firms and its oversight of state-owned firms. US President Donald Trump has said the remaining tariffs “will all come off” if future talks produce a second agreement, although this is not expected to happen before the US Presidential election this November. WSJ