Obama to nominate Summers as Fed chief: Japan's Nikkei

Last Updated: Friday, September 13, 2013 - 16:07

Tokyo: US President Barack Obama will name former Treasury Secretary Lawrence Summers as chairman of the Federal Reserve Board, Japan's Nikkei newspaper said on Friday.

The newspaper, quoting unnamed sources, said in its original Japanese version that Obama was "in the final stages" and moving toward naming Summers.

The English-language version said the president "is set to" name Summers as early as late next week.

Debate in Washington has focused on whether Obama will pick Summers or Fed Vice Chair Janet Yellen to succeed Ben Bernanke, whose term as head of the U.S. central bank expires in January. The appointment must be approved by the Senate.

Reports in the New York Times and Washington Post earlier this month suggested Obama was strongly inclined to pick Summers.

Republican Senator Johnny Isakson on Tuesday expressed concerns about a Summers nomination but stopped short of saying he would oppose him.

A number of senators - mostly Democrats - have criticised Summers for easing banking restrictions and not regulating derivatives when he was treasury secretary in the 1990s during the presidency of Bill Clinton.

The Nikkei said the White House is expected to announce the decision as early as late next week, after the Fed's rate-setting committee meets on Tuesday and Wednesday.


RBI to keep monetary policy tight till rupee stabilises: PMEAC

New Delhi: The Reserve Bank must continue its tight monetary policy until stability in the rupee value is achieved, Prime Minister's key economic advisor C Rangarajan said.

"The current stance of monetary policy has to continue until stability in the rupee is achieved. Thereafter, if the current trend in the moderation of wholesale price inflation continues, which is in fact expected, the monetary authorities can switch to a policy of easing," Rangarajan said while releasing the Economic Outlook for 2013-14.

The time frame for this is difficult to specify and much depends on stability in the foreign exchange markets, he said.

The rupee depreciated to 63.50 against the dollar yesterday from 54.99 on December 31. Raghuram Rajan, who took over as RBI Governor on September 4, said that apart from monetary stability, the central bank has the mandate for inclusive growth and development as well as financial stability.

The Chairman of the Prime Minister's Economic Advisory Council (PMEAC) said "there is a big dilemma facing the RBI because controlling inflation, maintaining price stability, is one of the major objectives of the monetary authority."

It has to take into account the impact on growth and what is happening in the real sector, but the primary responsibility of price stability rests with the Reserve Bank of India, he said.

Rangarajan today lowered the growth forecast for the current fiscal to 5.3 per cent from 6.4 per cent projected earlier. Inflation at the end of March is estimated at 5.5 per cent.

If pressure on the rupee had not mounted, he said, the policy easing would have continued, he said.

"Therefore, the dominant factor influencing the monetary authority will be the stability in the foreign exchange markets and if the stability in the foreign exchange markets continues, it will give greater room for the monetary authorities to act," he added.


First Published: Friday, September 13, 2013 - 16:07
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