The wholesale price-based inflation accelerated to a record high of 12.94 per cent in May, on rising prices of crude oil and manufactured goods. Low base effect also contributed to the spike in WPI inflation in May 2021. In May 2020, WPI inflation was at (-) 3.37 per cent. This is the fifth straight month of uptick seen in the wholesale price index (WPI)-based inflation. In April, 2021, WPI inflation hit double digit at 10.49 per cent. "The annual rate of inflation, based on monthly WPI, was 12.94 per cent for the month of May, 2021 (over May, 2020) as compared to (-) 3.37 per cent in May 2020.
Bankers have been criticised for not passing the benefits of rate cuts
The bonds were available for seven years. Since these were not traded in the secondary market, redemption took place at maturity.
If this turns into reality, India's gross domestic product (GDP) growth will be the lowest since 2012-13, which could severely hit job creation and income growth in the near term.
If you invest for the shorter-term now, you will be able to roll over to higher rates when the interest-rate cycle turns, advises Sarbajeet K Sen.
Currently, banks follow system of internal benchmarks, including Prime Lending Rate, Benchmark Prime Lending Rate, Base rate and Marginal Cost of Funds based Lending Rate.
Central bank may raise the limit on repo borrowings or purchase more of govt bonds.
RBI, in its first bi-monthly monetary policy statement, left the short-term lending rate, or repo rate, unchanged at 8 per cent and the cash reserve ratio static at 4 per cent.
RBI Governor has been under pressure from Finance Ministry.
The Reserve Bank of India, for the second straight time, on Thursday kept its key policy rate unchanged at 5.15 per cent, maintaining its accommodative policy stance as long as it was necessary to revive growth. The central bank retained GDP growth at 5 per cent for 2019-20 and pegged it at 6 per cent for the next fiscal.
Public sector banks, including the country's largest lender State Bank of India (SBI), have come out with a templated approach for restructuring retail and small business loans of up to Rs 25 crore under the Reserve Bank of India's (RBI) Covid restructuring package 2.0. They have also come out with standardised products to make funds available to business entities for improving healthcare infrastructure and to individuals for meeting Covid treatment expenses. Business loans have been divided into three categories.
The CPI and WPI data for December 2013 holds the key for the third-quarter monetary policy review to be announced later this month.
Investors should look at short term or floating rate schemes for market based returns.
The bond market is not in a mood to reason with the Reserve Bank of India (RBI) on keeping yields low. The 10-year bond yields continued to rise for the fourth straight session to close at 6.202 per cent from its previous close of 6.135 per cent. The yield was at 6 per cent a week ago. The RBI wants the yields to remain at 6 per cent, but bond dealers say the central bank will have to step up its bond-buying programme.
RBI's intention to keep its target inflation rate at 5% was the main reason behind keeping rates unchanged, says Adhil Shetty, CEO of BankBazaar.com.
India's macroeconomic situation is improving fast and the country's GDP growth will turn positive in the third and fourth quarters of the current financial year, eminent economist Ashima Goyal said on Sunday. Goyal in an interview to PTI said the management of the COVID-19 pandemic and gradual unlocks announced by the government have helped in avoiding multiple COVID-19 peaks. The growth estimates by different agencies are being continuously revised, she said.
A majority of the CEOs are expecting the economy to show growth in the next financial year on the back of rising consumer spending and a sharp turnaround in rural India.
In his first monetary policy review since taking office on September 4, RBI Governor Raghuram Rajan increased the repo rate by 25 basis points to 7.50 per cent.
FY22 will be the year to rebuild with the IMF projecting output growth at 11.5 per cent, economic survey at 11.0 per cent and the RBI's Monetary Policy Committee at 10.5 per cent.
Finance Minister Pranab Mukherjee on Tuesday said the Reserve Bank's decision to hike short-term borrowing and lending rates will help contain inflation and was in line with the government's policy.
India's economic growth is estimated to have slowed down to 11-year low of 5 per cent during the current financial year ending March 2020.
India's industrial production contracted by 3.6 per cent in February, official data showed on Monday. According to the Index of Industrial Production (IIP) data released by the National Statistical Office (NSO), manufacturing sector output declined by 3.7 per cent in February 2021. Retail inflation rose to 5.52 per cent in March, mainly on account of higher food prices, government data showed on Monday. The consumer price index (CPI) based retail inflation stood at 5.03 per cent in February.
Retail inflation crossed the RBI's comfort level and rose to 5.21 per cent in December on increase in prices of food items.
Business houses expect rate cut in next RBI policy.
The SBI report ruled out a October rate hike
In the Sensex pack, Sun Pharma was the biggest gainer, rallying 4.48 per cent, followed by Bajaj Auto, Tata Motors, Coal India, Hero MotoCorp, Maruti and HCL Tech, rising up to 3.01 per cent. While, RIL, PowerGrid, HDFC, L&T, IndusInd Bank, NTPC and Bajaj Finance declined up to 1.50 per cent.
'We believe there will be a full shutdown for four weeks and a partial shutdown for eight weeks.' 'Hence, economic activity is unlikely to normalise before the end of May.'
The most recent RBI effort could be the final push that would allow enough and more room for banks, builders and buyers to start moving towards change.
If the data breach is found to be genuine, and if the company is found guilty on the grounds of dereliction of duty, or misleading the general public and the RBI about the data breach, actions taken against it will be severe, the person quoted above said.
The Reserve Bank has decided to keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of their net demand and time liabilities and keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 7.25 per cent.
India's factory output climbed 22.4 per cent in March, benefiting from the base effect of the lockdown-marred month a year back as well as a turnaround in the manufacturing sector, while retail inflation slipped to a three-month low of 4.29 per cent in April. The high positive annual growth in the index of industrial production (IIP) in March 2021 came on back of a contraction of (-)0.9 per cent and (-)3.4 per cent in January and February 2021 respectively, according to the data released by the National Statistical Office (NSO) on Wednesday. This turnaround was led by recovery in the mining, manufacturing and electricity sectors.
The Reserve Bank has raised short-term borrowing rate (reverse repo) by 0.50 percentage points and lending rate (repo) by 0.25 percentage points.
Home and auto loans are likely to become more cheaper with several PSU banks promising to revise their lending rates if RBI eases its monetary policy on Saturday.
Many analysts over the past week have said the RBI has legroom to cut rates to the tune of 65 bps by June and some like Barclays and BofA have also spoken about the likelihood of an inter-meeting cut.
Housing sales fell 37 per cent year-on-year during the 2020 calendar year while gross office space leasing declined 35 per cent on low demand because of the coronavirus pandemic, but demand improved significantly in the last quarter to cross pre-COVID level, property consultant Knight Frank India said on Wednesday. In its 'India Real Estate - Residential and Office Update H2 2020' report released on Wednesday, the consultant reported that sales of residential properties fell 37 per cent to 154,534 units in 2020 across eight cities as compared with 245,861 units in the previous year.
Industry houses are emphatic with the RBI pruning repo rate and CRR by 0.25 per cent each after a long nine months in its third quarter monetary policy review.
Record liquidity infusion by the central bank in the banking system during the financial year 2020-21 amid sluggish economic activity resulted in banks investing more in safe government papers than in extending loans, data from Reserve Bank of India (RBI) showed. This trend has not been seen in nearly two decades, barring 2016 - the year of demonetisation.
Encouraged by softening inflation, the RBI on Thursday decided to cut the benchmark interest rate by 0.25 per cent to 7.75 per cent with a view to boost growth.
Growth remains weak, inflation is within 2-6% range, rate cut would help recoup forex reserves
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