12 months. while commodities are less important to us than they used to be, they still make up about 30 to 35 per cent of our merchandise exports. although canadians have to deal with these difficulties coming from abroad, it is important to remember that, overall, our economy is still in good shape. this is, first and foremost, because some basic aspects of our economic situation have improved markedly in the last few years. we now have a low rate of inflation, a fiscal surplus, and a declining ( though still high ) public debt - to - gdp ratio. as well, canadian businesses have undertaken major restructuring and investment initiatives to increase their productivity. because of these fundamental strengths, we are now better positioned to weather sudden shocks. as for the near - term outlook, there are also a number of positive elements in the picture. economic activity in the united states, our main customer, remains high. and here in canada, the latest indicators suggest continued expansion in consumer spending and business investment, supported by higher employment and low medium - and long - term interest rates. this year, the canadian economy will not repeat the 4 per cent growth experienced through 1997. but it may still expand by 2½ to 3 per cent ( fourth quarter over fourth quarter ). clearly, a good deal of uncertainty surrounds any estimate at this juncture, given the international situation. for one thing, it is difficult to judge how quickly and effectively japan will deal with its problems, and what this will mean for the rest of asia. the extent of the impact from the recent spreading of the crisis to russia and the pressures in parts of latin america is also uncertain. but, at the same time, most forecasters have consistently underestimated the resilience of the us economy, and may still be doing so. implications for the canadian dollar one of the most talked - about economic events in canada over the past year has been the decline in the external value of our currency. at its lowest point, in late august 1998, the canadian dollar had depreciated by about 13 per cent against the us dollar and by more than 7 per cent against the german mark from its average value in the first half of 1997, before the asian crisis erupted. since that low point in late august, the canadian dollar has recovered somewhat against the us dollar. what has caused these movements? exchange rates will typically reflect developments in canada and abroad. thus, it is important to keep in mind that the recent movements in the canadian dollar are

k c chakrabarty : indian banking sector – pushing the boundaries valedictory address by dr k c chakrabarty, deputy governor of the reserve bank of india, at the 11th advanced management programme “ towards the next orbit – indian banking sector ”, organized by the international management institute ( imi ), new delhi, 14 february 2013. * * * assistance provided by ms dimple bhandia in preparation of this address is gratefully acknowledged. 1. dr pritam singh, director general, international management institute ( imi ), participants from reserve bank of india and the commercial banks! it is a pleasure to be amongst you today as you complete the first leg of the learning experience which is the advanced management programme. i believe that the programme is craftily designed with an appropriate blend of lectures and interactive sessions with some leading academicians, industry captains and management experts, both from india and from european business schools. it is a rare learning opportunity for all participants – to understand and gain insights into global banking systems and develop awareness and appreciation of the emerging business environment. apart from the opportunity to gain from structured classroom learning, such programmes also offer a unique forum through which participants can learn from each other and assimilate the best management practices across organizations. i hope all of you will take advantage of this wonderful opportunity. 2. being a part of the banking system, which forms the core of the financial architecture of the economy, you have an inimitable opportunity to influence the economic lives of the nation ’ s populace. we all know that banking plays a silent, yet crucial part in our day - to - day lives. the banks perform financial intermediation by pooling savings and channelizing them into investments through maturity and risk transformations, thereby keeping the economy ’ s growth engine revving. 3. the central theme of the programme, as in the previous year, is : “ indian banking sector : towards the next orbit ”. the theme is, arguably, even more relevant today than a year ago. while, on the one hand, the outlook for the global economy continues to be grim, the outlook for the domestic economy is also far more subdued than the last year. growth of the indian economy for 2012 – 13 is projected at 5 per cent – significantly below the 9 per cent growth rate envisaged during the twelfth plan and well below our desired goal of double digit growth rate. the indian banking sector has also faced significant challenges. asset quality of banks has come under