The Hindu Business Line : Centi talk on the Minty Street

THERE is little cricket to watch on the telly in a (conditional access system) CAS regime, where we are so adamant about not buying set-top-boxes. Yet, we are happy with a minimised screen on the desktop, where the score keeps ticking. Likewise, another site on the tray for continual monitoring is www.rbi.org.in, where the guv is at the crease and the scoreboard has been inching towards the magical 100 all these days.

This is the time, as in matches, when spectators share guesses and information with one another about how their man is in form, what the ultimate score is going to be, and so forth. Similarly, fence-sitters on the Mint Street are asking and talking, waiting and watching:

Hundred what? Days in office?

Y.V. Reddy is not a politician or moviemaker to celebrate such trivial things as the first hundred days in office, though a back-of-the-envelope calculation would show that he crossed that benchmark on December 13. What we are now busy with is when the reserve mountain. It had crossed $98 billion according to the latest bulletin, and since then having a shy at the 100-mark.

All that hundred bullion? So much gold?

You are wrong on two counts: For one, it's not bullion, but billion, which, if you are too dumb, is 1,000 million, or 100 crore. Multiply by the exchange rate to get the rupee equivalent. Next, the reserve is not fully made of gold. If you can digest some numbers, try this: On December 12, total reserves were about $99 billion of which foreign currency assets made up 96 per cent, and gold constituted only 4 per cent.

I am losing patience. Why couldn't they top it up soon?

You know what happens when the batsman loses patience with his score creeping towards a century. He goes for the big hit and then... Things don't work so dramatically in the RBI where even when they cross the 100-mark — which experts were saying would not happen till the end of the year — we would know only when the statistical supplement is published or they called up the media to announce.

Will they welcome that one-billionth dollar with fanfare?

Since all the figures get collated and compiled into tables of numbers, it would be tough to say the source of the crucial dollar that made the reserve jump to a digit more to touch the $100-billion mark. For all you know, it may be hiding in the `invisibles.' So, you are not going to be seeing it happen as in cricket awards ceremonies where they hand over a big-size cheque to the winner.

Why not a gala event?

There are too many ideas pouring in as to how Reddy and his men should celebrate the occasion — ranging from popping of champagne to a catwalk, from fireworks to high-five. However, the big bank seems to be concerned about the pile, so they have put on the Web site the "Report of the Working Group on Instruments of Sterilisation."

Are you sure you didn't stumble upon a family planning site?

Wait, sterilisation is serious business, because here we are talking about "the market based approach aimed at neutralising part or whole of the monetary impact of foreign inflows." Market based approach, if you want to know, involves financial transactions between the central bank and the market, which leads to withdrawal or injection of liquidity, as the case may be. And injection of liquidity has nothing to do with running saline over IV.

Will we get to keep all of that?

Sorry, the flow is a two-way road. Remember that, "external capital flows cannot be easily predicted and can also reverse even in the presence of sound fundamentals," as the RBI puts it. Also, it is not possible to say that the flows are of a permanent and sustainable nature or whether such inflows are temporary.

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