India will be the world's third-largest economy by 2028 as it becomes the world's most sought-after consumer market and gains share in global output, driven by macro stability influenced policy and better infrastructure, Morgan Stanley said. From a $3.5 trillion economy in 2023, the Indian economy is projected to expand to $4.7 trillion in 2026, which will make it the fourth largest in the world behind the US, China and Germany.
The Reserve Bank of India (RBI) on Friday hiked repo rate by 50 basis points to 5.90 per cent in order to control the rising inflation, keeping in line with the aggressive policies of central banks and the volatile markets prevalent across economies. RBI Governor Shaktikanta Das announced the rate hike today. In the meeting of the Monetary Policy Committee (MPC) that started on Wednesday, five of the members of the MPC voted to hike the key lending rate, repo rate, by 50-basis points (bps).
The study points out that for the determination of growth and investment at the macroeconomic level, the real interest rate is more relevant, even though the nominal interest rate is important for investment planning at the firm level.
Of the 15 participants, 7 expect CRR cut, only one sees repo rate reduction.
Exactly a fortnight ahead of the Reserve Bank of India's (RBI's) next monetary policy review, a key market indicator of interest rates - the overnight indexed swap (OIS) - suggests that the central bank may tighten policy by 35 basis points and then refrain from further rate hikes. RBI Deputy Governor Michael Patra recently described the OIS as the primary instrument for hedging interest rate risk in India. The six-member Monetary Policy Committee (MPC) of the RBI will meet on December 5-7.
Reserve Bank of India (RBI) on Wednesday upped inflation projection for the current fiscal to 6.7 per cent from 5.7 per cent forecast in April. RBI Governor Shaktikanta Das said the upside risk to inflation persists and the recent spike in tomato prices would fuel food inflation. Also, high global crude oil prices would add to the upside pressure on inflation. The upward revision in inflation projection comes as domestic retail inflation has remained above RBI's comfort level of 6 per cent for four months in a row, mainly due to the Russia-Ukraine war which has impacted the prices of commodities across the globe.
Fitch said the full implications of Patel's resignation will only become clearer once there is some indication of the RBI's policy approach under his replacement, Shaktikanta Das
Voting for the 2014 general elections will begin in April and it is expected Budget 2014-15 will be presented in June.
Fitch Solutions sees RBI keeping benchmark interest rates unchanged during the fiscal to March 2022 following its decision to buy Rs 1 lakh crore of government bonds. "We had initially expected another policy rate cut to arrest the rise in government bond yields since the Union Budget announcement in February. "However, having an explicit bond purchase guidance from the RBI following the announcement of the G-SAP will also achieve a similar effect, if not even be more effective than a rate cut on capping the increase in bond yields," it said in a note. The Reserve Bank of India (RBI) held its policy repurchase (repo) rate unchanged at 4 per cent at its monetary policy meeting on April 7.
The Reserve Bank on Thursday marginally revised upwards the economic growth projection for the current fiscal to 6.5 per cent, from its earlier estimate of 6.4 per cent. Unveiling the first bi-monthly monetary policy of 2023-24 fiscal, RBI Governor Shaktikanta Das said the GDP growth in the first quarter of 2023-24 is expected at 7.8 per cent.
Finance Minister Arun Jaitley on Saturday said that retail inflation is expected to remain close to 5 per cent
RBI recently cut repo by 0.25 percentage point, taking the rate to 7.25 per cent in three reductions since January.
The Reserve Bank of India on Wednesday kept the benchmark interest rate unchanged at 4 per cent and decided to continue with its accommodative stance against the backdrop of concerns over the emergence of the new coronavirus variant Omicron.
The country's economic growth slipped to a decade-low of 4.5 per cent in 2012-13 and is estimated at 4.9 per cent in the current financial year.
'Maintain a balanced approach with a preference for short-to medium-duration funds.'
Among the Sensex firms, Adani Enterprises and Adani Ports sustained their gaining momentum and traded higher by 4.40 per cent and 4.37 per cent, respectively. BPCL, Axis Bank, Mahindra & Mahindra and SBI were the other major gainers. On the other hand, HCL Tech, Infosys and Bajaj Auto traded in the negative zone with a loss of up to 1.54 per cent.
With the setting of MPC, the interest rate setting powers would move from RBI Governor to the panel.
The central bank has clearly signalled the conditions under which monetary easing would take place early this quarter. And, current conditions meets the RBI's paramters
In the context of RBI's view that the real interest rate, defined as the repo rate less "look forward" CPI, should be around 150-200 basis points.
With no rate cuts on the table, the other monetary policy alternative could be to reduce the width of the asymmetric policy corridor or increase in reverse repo rate when the pandemic subsides, they opined.
The Reserve Bank on Wednesday announced the increase of the UPI Lite wallet limit to Rs 5,000 and per-transaction limit to Rs 1,000, in order to encourage wider adoption of the popular instant payment system through mobile phones. A limit of Rs 500 per transaction and an overall limit of Rs 2,000 per UPI Lite wallet, is presently applicable, with the facility of auto-replenishment. Unveiling the October bi-monthly monetary policy, Reserve Bank Governor Shaktikanta Das also said the per-transaction limit in UPI123Pay will be enhanced to Rs 10,000 from the current Rs 5,000.
The liquidity deficit in the banking system crossed Rs 2 trillion again on Monday, despite the second instalment of cash reserve ratio (CRR) reduction coming into effect from December 28.
In all, RBI has cut interest rates by 110 bps this year. But this has not yet led to a boost in economic activity. While the growth rate has slowed to a five-year low, consumer confidence is waning and foreign direct investment has plateaued.
'As the Budget has taken some measures to spur growth, similar action from the MPC may be expected.'
The RBI was not party to the decision to demonetize 500 and 1,000-rupee notes, which was taken at the highest level of India's political leadership.
The retail inflation eased to a four-month low of 4.87 per cent in October, mainly due to cooling prices of food items, government data showed on Monday. The Consumer Price Index (CPI) based retail inflation fell to a three-month low of 5.02 per cent in September. The previous low inflation was recorded at 4.87 per cent in June.
The Reserve Bank on Monday hinted at lowering interest rates saying that focus of monetary policy needs to be shifted to arrest declining growth while keeping inflation under control.
The final and most significant reset in the relations between the government and the RBI is the manner in which the process of appointing the governor and deputy governors of the central bank has been changed.
Despite sharp interest rate cuts expected in this financial year amid easy liquidity conditions, state-run banks are treading cautiously on their loan growth projections for FY26. Most large banks are projecting loan growth at 11-13 per cent, almost similar to the previous financial year.
In the second policy review under Governor Shaktikanta Das, the six-member Monetary Policy Committee voted 4:2 in favour of the rate cut.
The Reserve Bank on Wednesday marginally lowered the country's GDP growth projection for the current fiscal at 6.8 per cent from its earlier estimate of 7 per cent. However, despite the downward revision in the economic growth projection, India will remain among the fastest growing major economies in the world, said RBI Governor Shaktikanta Das while announcing the latest bi-monthly monetary policy.
Borrowers should consider switching from an MCLR-linked to a repo rate-linked loan.
RBI Governor Raghuram Rajan had set up a committee to review the monetary policy framework.
The Reserve Bank of India on Wednesday expectedly left interest rates unchanged and maintained an accommodative stance as the economy faces a renewed threat to growth due to the resurgence of coronavirus cases.
Reserve Bank of India (RBI) on Friday kept the benchmark interest rate unchanged at 4 per cent and decided to continue with its accommodative stance despite rising inflation. This is the 11th time in a row that the Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das has maintained the status quo. RBI had last revised its policy repo rate or the short-term lending rate on May 22, 2020 in an off-policy cycle to perk up demand by cutting the interest rate to a historic low.
The Reserve Bank on Wednesday increased the benchmark lending rate by 40 basis points (bps) to 4.40 per cent in a bid to contain inflation, which has remained stubbornly above the target zone of 6 per cent for the last three months. The decision follows an unscheduled meeting of the Monetary Policy Committee (MPC), with all six members unanimously voting for a rate hike while maintaining the accommodative stance. While the inflation has remained above the targetted 6 per cent since January, RBI Governor Shaktikanta Das said the inflation print in April is also likely to be high.
State Bank of India, Tech Mahindra, Larsen & Toubro, Tata Steel, Sun Pharma, Infosys, HCL Tech, Axis Bank, Tata Consultancy Services and NTPC were among the biggest laggards among Sensex shares. Nestle, Hindustan Unilever, Titan, Power Grid, UltraTech Cement and ITC were among the gainers.
Here is some background on the candidates seen as potential successors to Rajan at the RBI
The finance ministry has received about 100 applications for the post, which have been sent to the high-level panel that will select a suitable candidate for the post, sources said.
RBI retained the GDP growth for the financial year 2018-19 at 7.4 per cent.
