DAILY GK UPDATE - 1st April

1.    RBI keeps repo rate unchanged at 8 per cent

i. Reserve Bank of India (RBI) Governor Raghuram Rajan on Tuesday kept the key policy rate (repo) unchanged since retail inflation still remains �sticky� but introduced steps to increase liquidity and contain volatility in the money market.

ii. The RBI, in its first bimonthly monetary policy statement, left the short-term lending rate or repo rate unchanged at 8 per cent and the cash reserve ratio static at 4 per cent. It halved the overnight call money rate to 0.25 per cent and increased the 7-day and 14-day repo limits to 0.75 per cent from 0.50 per cent.

iii. At the current juncture, it is appropriate to hold the policy rate, while allowing the rate increases undertaken during September 2013-January 2014 to work their way through the economy,� said Mr. Rajan, who had in previous policy announcements surprised the markets with policy rate changes.

iv. �The term repo has evolved as a useful indicator of underlying liquidity conditions. It also allows market participants to hold liquidity for a longer period...evolving market-based benchmarks for pricing various financial products,� he said.

v. Liquidity conditions have tightened in March, partly on account of year-end �window dressing� by banks, though an extraordinary infusion of liquidity by the Reserve Bank has mitigated the tightness,� he said.

vi. Liquidity conditions have tightened in March, partly on account of year-end �window dressing� by banks, though an extraordinary infusion of liquidity by the Reserve Bank has mitigated the tightness,� he said.

Following are the highlights of RBI monetary policy review: 

1. Repo rate unchanged at 8 pc.
2. Cash reserve ratio (CRR) too unchanged at 4 pc.
3. No rate hike if inflation continues to trend lower.
4. Economic growth for 2014-15 expected at 5.5 pc.
5. CAD expected to come down to 2 pc of GDP in 2014-15.
6. Retail inflation expected to be under 6 pc in 2014. 

2.    Manuel Valls Named New Prime Minister Of France

i. France's president has named 51-year-old Socialist Manuel Valls as the country's new prime minister.

ii. In a prerecorded televised speech, Francois Hollande said Valls, the former interior minister, would lead a "combative government."

iii. Hollande admitted "it's time to start a new stage," just 24 hours after his Socialists suffered heavy losses in nationwide municipal elections.

iv. Valls, who is consistently voted France's most popular Socialist in opinion polls, is considered to be part of the right-wing side of the party and is also relatively popular with French conservatives.

3.    ADB pegs GDP growth rate for 2014-15 at 5.5 pc

i. India's GDP is poised to accelerate to 5.5 percent in 2014-15 on the back of improved performance in industry and services but it may take some time for the country to reach its potential growth rate, says an Asian Development Bank (ADB) report.

ii. "The recent deceleration of economic growth in India appears to have bottomed out, but the economy will not reach its potential until remaining structural bottlenecks are overcome", said the ADB Outlook 2014 released on Tuesday. 

iii. Indian economy, according to Central Statistical Office (CSO), is estimated to record a growth rate of 4.9 percent in 2013-14, up from decade's low of 4.5 percent posted in the previous financial year. 

iv. The economy has been growing at 9 percent before the growth rate was pulled down by 2008 global financial meltdown. 

4.    RBI allows foreign investors to hedge currency risks

i. To improve risk mitigating environment in the country, the Reserve Bank on Tuesday allowed overseas investors to hedge their currency exposure.

ii. In its first bi-monthly policy, the RBI, in order to enhance hedging facilities for foreign investors in debt instruments, proposed to allow them to hedge the coupon receipts falling due during the next 12 months.

iii. The central bank also said it is in final discussion with market regulator, SEBI, to finalise the modalities for allowing FIIs to hedge their currency risk by using exchange traded currency futures in the domestic exchanges.

iv. The RBI also proposed to allow all resident individuals, firms and companies with actual foreign exchange exposures to book foreign exchange derivative contracts up to $ 2,50,000 on declaration, subject to certain conditions.

5.    SEBI disclosure norms for mutual funds effective from today

i. Mutual fund houses now require to make monthly disclosures about assets managed by them as well as explain the rationale behind exercising their voting rights in firms, as part of stronger SEBI norms effective from Tuesday.

ii. Mutual funds will have to disclose details with respect to Asset Under Management from different categories of schemes, AUM from places beyond top-15 cities, contribution of sponsor and its associates in AUM, contribution from different types of investors (retail, corporate etc), state-wise contribution and AUM from sponsor/non-sponsor group distributors.

iii. Besides, the mutual fund players would now have to disclose the specific rationale behind supporting their voting decision.

iv. The MFs are required to make the disclosures on their websites and share the same with Association of Mutual Funds of India (AMFI) within 7 working days from end of the month.

v. As per the new norms, Asset Management Companies (AMCs) would have to obtain auditor�s certification on the voting reports being disclosed by them.

6.    ITI signs MoU with Department of Telecom

i. Public sector ITI Ltd has signed an MoU with the Department of Telecommunications for 2014-15.

ii. The MoU envisages ITI�s role in the field of telecommunications to pursue opportunities of indigenous telecom equiptment manufacturing arising out of Government�s National Telecom Policy and preferential market access and also to play an important role in the Government of India funded projects of national importance like National Optical Fiber Network (NOFN) and Network for Spectrum (NFS).

7.    Nancy Powell resigned as the US Ambassador to India

i. Nancy Powell, the US Ambassador to India on 31 March 2014 announced her resignation in the US Mission Town Hall meeting. The resignation was submitted to Barack Obama, the President of US. She would now get back to her home in Delaware before the end of May 2014. 

ii. This action of resignation has ended a thirty-seven year career of Powell. During her long career, her other postings as the US Ambassador includes Uganda, Ghana, Pakistan, Nepal and India as well as service in Canada, Togo, Bangladesh, and Washington, where she was most recently Director General of the Foreign Service.  

iii. The bilateral ties between the two countries were shocked after the Indian diplomat Devyani Khobragade was handcuffed and strip-searched in New York in December 2013 on charges of Visa fraud and keeping her made underpaid.

8.    Change in Climatic condition may lead India to war: UN report

i. The latest report of UN panel on Climate Change released on 30 March 2014 has warned that the climate change being faced in Asia has increased the risk of armed conflict among India, Pakistan, Bangladesh and China. As per the report, the possibility of war would be due to the severe stress on water resources and food-grain production in future, due to climatic change.

ii. The UN�s Intergovernmental Panel on Climate Change in its report has assessed the impacts of climate change on human health, settlements and natural resources. In its findings the panel concluded that the environmental change is heading towards terrible conditions and the worst is yet to come, if no measures are taken to curb the ill-effects of global warming. 

iii. In context of India the report says that India, like other developing economies would lose a Gross Domestic Product (GDP) up to 1.7 percent in case the annual temperature rises at a mean of 1 degree Celsius as compared to pre-industrialisation level. The effects of the climatic change will hit maximum to the poor. 

Background
Earlier, UN release of fourth week of March has claimed that 2013 was the sixth warmest year in recorded history. In other separate releases National Oceanic and Atmospheric Administration (NOAA) and NASA have confirmed that the trend of global warming is continuing.

9.    Noel Tata takes over as chairman of Trent

i. Noel N Tata has taken over as Chairman of Tata group firm Trent Ltd following the retirement of F H Kavarana.

ii. Mr. Tata, who has been Vice-Chairman of the company, assumed the new role on March 31, 2014.

iii. Noel N Tata has taken over as Chairman of Tata group firm Trent Ltd following the retirement of F H Kavarana.

iv. Mr. Tata, who has been Vice-Chairman of the company, assumed the new role on March 31, 2014.

v. Established in 1998, Trent runs lifestyle chain �Westside�, hypermarket chain �Star Bazaar� and �Landmark�, a books and music chain.

vi. Earlier this year, British retail major Tesco formed a joint venture with the Tata Group firm by buying a 50 per cent stake in Trent Hypermarket Ltd (THL) for about 85 million pounds.

10.  India face South Africa in semis, Sri Lanka await West Indies or Pakistan

i. Unbeaten Team India will play South Africa in the second semi-final of the ICC World T20 on Friday. India had finished on top of Group two while South Africa finished as the second team in Group one. 

ii. On Monday night, Sri Lanka New Zealand by 59 runs in a low-scoring thriller to top Group one. The Lankans won the Asia Cup earlier in in March by beating Pakistan. They will now await the winners of West Indies and former World T20 champions Pakistan.

iii. Today an upbeat West Indies will clash with Pakistan to determine the second semi-finalist from the Group of Death.

11.  Sri Lanka enter semis with win over New Zealand

i. Sri Lanka secured a semifinal spot in the ICC World Twenty20 after defeating New Zealand by 59 runs in a Group I match of at Zahur Ahmed Chowdhury Stadium in Chittagong on Tuesday.

ii. Brief Scores:
Sri Lanka: 119 all out in 19.2 overs (Mahela Jayawardene 25, Lahiru Thirimanne 20; Tremnt Boult 3/20, Jimmy Neesham 3/22).

New Zealand: 60 all out in 15.3 overs.