'...A new challenge has emerged in the form of Mythos.'
Former Reserve Bank of India governor Yaga Venugopal Reddy said he would have preferred a tighter monetary policy as managing inflation and inflationary expectations were crucial to keep the economy growing.
FM P Chidambaram has endorsed RBI's monetary policy. He expressed concerns about the gap in India's and the US' interest rates and will discuss it with RBI's Governor Y V Reddy.
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The truth is the government and the Reserve Bank enjoy a free, frank and cordial relationship.
The time frame for this is difficult to specify and much depends on stability in the foreign exchange markets, Prime Minister's key economic advisor C Rangarajan said.
The central bank is yet to consider actions such as a rate hike or mobilising dollar inflows from non-resident Indians to boost forex reserves as it cannot afford to continue with them for long when the rupee's internationalisation tops its agenda, explains Tamal Bandyopadhyay.
"It is quite possible that the rates will remain low in the near to medium term, but that will depend on how conditions evolve," said RBI Governor Sanjay Malhotra.
The policy will be presented in the backdrop of rising inflation.
'Banking is the only sector that can see double-digit growth in FY27.'
The Reserve Bank of India's proposal to allow non-banking financial companies (NBFCs) access to the term money market is projected to significantly increase market volumes by 40-60 per cent in the first year, potentially doubling turnover within two to three years, according to treasury executives.
India Ratings and Research predicts the Reserve Bank of India (RBI) will maintain the repo rate at 5.25 per cent throughout FY27, despite potential inflationary pressures from higher fuel prices, with inflation expected to remain within the central bank's tolerance band.
'Rate cut looks unlikely and there is reason to believe that the cycle is over.'
The RBI under new Governor Sanjay Malhotra on Friday cut interest rate for the first time in nearly five years as the central bank pivoted the policy stance to support a shuttering economy. The 25 basis points rate cut to 6.25 per cent comes after last rate reduction in May 2020. The last revision of rates happened in February 2023 when the policy rate was hiked by 25 basis points to 6.5 per cent.
Strong domestic growth will continue to draw foreign investment into the Indian economy, Reserve Bank of India (RBI) Governor Sanjay Malhotra said on Tuesday. He said this was reflected in recent free trade agreements and investment commitments by large technology companies.
Shrugging off concerns over the depreciation of rupee, the RBI has cut interest rate by 25 basis points to 5.25 per cent in a bid to further bolster economic growth, which rose to a six-quarter high of 8.2 per cent in the second quarter of the current financial year.
The Reserve Bank of India (RBI) and the central government have introduced a package of measures, including tax exemptions for FPIs on government securities and a concessional foreign-exchange swap facility, aiming to attract up to $50 billion in foreign capital. This initiative is designed to strengthen India's balance of payments and potentially cover the projected BoP gap for FY27.
The RBI's bi-monthly policy review on June 3 will be the first after Prime Minister Narendra Modi assumed office on May 26.
Asked if the RBI will cut rates in its upcoming policy review, he said the central bank will definitely factor into account various developments and make an assessment of the macro economic conditions.
Indian stock market benchmark indices Sensex and Nifty experienced a significant decline, driven by escalating tensions in the Middle East and rising crude oil prices.
A revival in investment activity, which is key to stimulating growth, depends particularly on the recent policy announcements by the government being translated into effective actions, Subbarao said while announcing the second quarterly review of the monetary policy.
India's wholesale price index (WPI) inflation surged to 9.68 per cent in May, up from 8.26 per cent in April, primarily due to significant increases in the prices of fuel and power, manufactured goods, and food items.
The Reserve Bank of India (RBI) has projected a 6.9 per cent GDP growth for the current financial year, citing concerns over commodity prices and supply chain disruptions stemming from the West Asia crisis.
Remarks come at a time when he is under pressure from the govt to cut interest rates.
In an event-heavy week ahead, stock markets' movement would highly depend on macroeconomic data announcements, global trends, RBI's interest rate decision and trading activity of foreign investors, analysts said. India's industrial production data for October 2025 will be released on December 1, an official statement said on Friday.
The Reserve Bank of India (RBI) has projected that crude oil prices will average USD 85 per barrel and the rupee will weaken to 94 against the dollar by FY27, according to its bi-annual Monetary Policy report.
Former Reserve Bank Governors do not seen any harm in central bank consulting the government before firming up monetary policy initiatives saying such an step would not amount to infringement on its independence.
Sanjay Malhotra has made structural changes to banking regulation to bring down costs and increase efficiency. Plus, he kicked off a benign interest regime. But there are challenges ahead.
The Reserve Bank of India (RBI) has proposed new measures to combat financial fraud in digital payments, including lagged credit for authorised push payments and a 'kill switch' for users to disable all digital transactions.
The bank chiefs have also cancelled the customary media conference after the bi-annual policies.
The International Monetary Fund (IMF) has reduced India's growth forecast for FY27 to 6.4 per cent, citing the potential impact of higher energy prices offsetting the country's economic resilience. Despite this, India remains among the fastest-growing major economies.
The year 2022 saw the Reserve Bank of India (RBI) start acting on the policy repo rate after a gap of two years. The six-member monetary policy committee of the RBI reduced interest rate sharply - by 115 bps - when Covid-19 struck in 2020. In March 2020, days after the nationwide lockdown was announced, MPC in an unscheduled meeting reduced the repo rate by 75 bps, followed by another 40 bps in May. Status quo was maintained for the next two years since the May repo rate hike.
Reserve Bank Governor Sanjay Malhotra on Friday said the central bank does not target any band for the rupee in the forex market, and allows the domestic currency to find its own correct level.
While the economy will wait for a rate cut in December, the banking industry should be happy with the wave of liberalisation -- a big push for growth in bank credit, points out Tamal Bandyopadhyay.
The RBI seems to be acknowledging that all deposits are not equal -- a deposit with a lower run-off assumption is inherently more valuable than one that could disappear overnight, points out Tamal Bandyopadhyay.
Raghuram Rajan, who was Chief Economic Advisor in the Finance Ministry before taking over as RBI Governor on September 4, is scheduled to announce the next mid-quarter policy review on December 18.
The rupee appreciated 13 paise to close at 90.34 against the US dollar on Thursday, on trade deal optimism and overnight decline in commodity prices, even as the upside remained capped as investors look for more clarity on the India-US trade deal.
The Reserve Bank of India (RBI) on Wednesday kept its policy interest rate unchanged at 5.5 per cent for the second consecutive time, citing concerns over tariff uncertainties.
India's banking system is grappling with a persistent liquidity surplus exceeding Rs 5 trillion, driven by significant government spending and bond redemptions, leading market participants to anticipate the Reserve Bank of India will step up Variable Rate Reserve Repo operations to manage the excess funds.
