Friday, December 10, 2010

A puzzling data revision

Ordinarily, official statistics get revised because at first, provisional estimates are released, and when the full data filings come in, then improved estimates are put out.

In the case of RBI's data about RBI's trading on the currency market, such data revisions should ordinarily not arise.

But yesterday, data released by RBI modified the previous information that had been put out about RBI's trading on the currency market. Earlier, trading in June had been claimed to be 0. Now it shows purchase of $370 million and sale of $260 million. Earlier, trading in September had been claimed to be 0. Now it shows a purchase of $260 million. I wonder why this data revision took place.

The newest data - for October - shows a purchase of $450 million on the spot and $450 million on the forwards. At a time when rupee trading is estimated at above $40 billion a day (worldwide), it is hard to see how such a small scale of trading can generate a significant impact upon the price; so I wonder what is going on in terms of the rationale and the thought process.

4 comments:

  1. $260 Billion!! Either you or RBI are reporting it wrong perhaps.

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  2. Any Nick Leeson's hiding at the RBI?

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  3. My apologies for a typing mistake! Unlike RBI's data releases, which come out of a back office system, my blog posts come out of the top of my head!!

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  4. There is a mention of the same in Economic Times (December 15, 2010 – Money & Banking: Current Account – Titled “Figure Watch”). Please find the extract of the same –

    “The RBI has partially erred in publishing the figures on its intervention in the currency markets. Until November, the columns on gross dollar sales and purchases were blank, implying that it has neither bought nor sold dollars from the market since Jan 2010. However, in the Dec bulletin, one could see that the central bank did intervene in March, June, Sept and Oct. But in the earlier bulletins, this had to be deciphered from another column that gave cumulative figures for the fiscal year”

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