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RBI orders probe into how policy decision leaked out

RBI orders probe into how policy decision leaked out
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First Published: Tue, Jul 29 2008. 10 15 PM IST

Strong stand: The Reserve Bank of India building in New Delhi. Photograph: Harikrishna Katragadda / Mint
Strong stand: The Reserve Bank of India building in New Delhi. Photograph: Harikrishna Katragadda / Mint
Updated: Tue, Jul 29 2008. 10 15 PM IST
The Reserve Bank of India’s (RBI) quarterly review of monetary policy was “leaked” about half an hour before the embargo on its publication was lifted.
Calling it as an “unusual development”, RBI governor Y.V. Reddy said the central bank is making a thorough inquiry into the matter.
Strong stand: The Reserve Bank of India building in New Delhi. Photograph: Harikrishna Katragadda / Mint
Equities and bonds tumbled and the rupee rose after a 60-page mail, purportedly showing Reddy’s decision to increase borrowing costs for the third time in two months, was sent to media from a Gmail account.
Television channels, including CNBC-TV18 and NTDV Profit, published the email before the official noon embargo was lifted.
“This is, we believe, a breach of the protocols related to the embargo by a central bank,” Reddy said, pointing to the news flash of the policy decisions at about 11.47am, before the embargoed time of 12 noon.
“I have also requested an immediate inquiry into the circumstances under which the information came out,” he said. “The web manager, who have been hired by us, has intimidated to us that the email did go out from them erroneously at about 11.20am. We are making further inquiries to take necessary corrective measures.”
Mint independently confirmed this with at least four professionals who received the policy document from an rbiteam@gmail.com email address at 11.29am, 31 minutes before the official embargo was to be lifted. The subject line for the mail was ‘Macroeconomic and Monetary Developments– 2008-09’, which was the title of what RBI released on Monday evening. But the email itself actually contained the quarterly policy review that was to be officially released at noon on Tuesday.
A bond dealer, who said he got the mail half an hour before the embargo was lifted, added: “People sold bonds heavily before the policy action was officially known.” The yield on 10-year benchmark paper, which was trading at 9.04%in early trading hours, rose to 9.20% by 11.30am and further to 9.35% by 11.43am when TV channels started showing the policy highlights.
(Cherian Thomas and Anoop Agrawal of ‘Bloomberg’ contributed to this story.)
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First Published: Tue, Jul 29 2008. 10 15 PM IST