Clouding the inflation outlook is the recommendation of the 7th pay panel for an average 24 per cent pay hike for millions of its employees, which would lift demand-driven price pressures.
The bonds were available for seven years. Since these were not traded in the secondary market, redemption took place at maturity.
Spread investments in equities, bonds, gold and cash to tackle volatility advise Nitin Singh, MD and head, and Vinay Joseph, director, investment strategy, Standard Chartered Wealth Management, India.
The balance sheet of the Reserve Bank plays a critical role in the functioning of the country's economy.
"We expect GDP growth to slow from 7.3 per cent year-on-year in July-September 2016 to 6.0 per cent in October-December 2016 and 5.7 per cent in January-March 2017," Nomura said in a research note.
The move will likely attract more retail investors.
SBI Q3FY24 result review: A higher-than-factored weakness in the October-to-December quarter (Q3) results of State Bank of India (SBI), for financial year 2023-24 (FY24), has prompted brokerages to cut earnings estimates for the ongoing financial year. They, however, have maintained 'Buy' ratings on the stock, revising target price upwards in some cases, owing to the stock's recent underperformance relative to its peers.
For now, the concerns over bad loans have taken a back seat; a bigger challenge for the banking community is credit growth, explains Tamal Bandyopadhyay.
Dhawal Dalal, executive vice-president & head, fixed income, DSP BlackRock Investment Managers, expects the central bank to hold rates for the rest of calendar year 2016.
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BSE auto index surged 2%, capital goods, healthcare and oil & gas indices also up.
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.
Bankers need to take a call on whether they will allow technology firms to run banks or banks themselves will turn into tech firms, says Tamal Bandyopadhyay.
Risk sentiment received a boost after eight core sectors grew to a five-month high of 4.9 per cent in August
Gilt funds make sense only if you want to take a tactical view on interest rates and are looking for a short-term duration.
On Friday, the rupee fell to its 26-month low at 66.89.
Seeking to dispel possible notions of the RBI not having done enough by opting for a pause for the second consecutive time, Das said the RBI has a wide dashboard of instruments beyond rates that can be deployed.
Fitch Ratings has cut India's economic growth forecast to 8.7 per cent for the current fiscal but raised GDP growth projection for FY23 to 10 per cent, saying the second COVID-19 wave delayed rather than derail the economic recovery. In its APAC Sovereign Credit Overview, Fitch Ratings said India's 'BBB-/Negative' sovereign rating "balances a still-strong medium-term growth outlook and external resilience from solid foreign- reserve buffers, against high public debt, a weak financial sector and some lagging structural factors". The 'Negative' outlook, it said, reflects uncertainty over the debt trajectory following the sharp deterioration in India's public finances due to the pandemic shock.
After unseasonal rains, supply disruptions and pandemic-induced woes pushed retail inflation well over the Reserve Bank's comfort zone in 2020, the scenario is likely to stay that way at least in the short term as economic recovery slowly gains foothold. For most part of this year, pricier food items pushed the retail inflation, based on Consumer Price Index (CPI), higher in the range of 6.58-7.61 per cent, except for March when the reading was 5.91 per cent. Experts believe retail inflation is likely to average around 6.3 per cent this fiscal and mostly will remain sticky going forward owing to pick-up in demand across sectors.
The difference between what the banks play in the US and India is not that of soccer and football but rugby and football. SVB also has a unique character. But when risks are mispriced, the fallout could be very similar, points out Tamal Bandyopadhyay.
The big test will come at the end of March when the fiscal year ends and banks tend to hold on to cash.
The Lok Sabha elections in 2024 are not a consideration when it comes to monetary policymaking, said Reserve Bank of India governor Shaktikanta Das to underscore the central bank's commitment to controlling inflation. "It's not possible for me to comment what we do in the next MPC (Monetary Policy Committee), but one thing I can tell and I would like to make it very clear-that the fact of elections coming up in 2024 is not a factor at all so far as monetary policymaking is concerned. "Monetary policymaking is for checking (and) controlling inflation," Das said at the Business Standard, BFSI Insight Summit.
The finance minister's meeting with chief executives and managing directors of banks ahead of the Union Budget assumes significance in view of the critical role the banking sector plays in boosting consumer demand across sectors.
...but when they awaken, it's going to be overly optimistic to assume everybody will walk off the sleeping bed and come back to full life, Rajan noted.
What is killing the risk appetite of the bond buyers is the inconsistency in the central bank's approach. It needs to allow the yield to find its own level, gradually. To ensure that, the RBI may adopt a similar approach with which it handles a slipping rupee, asserts Tamal Bandyopadhyay.
'We have already sanctioned loans worth over Rs 3,000 crore to around 120,000 customers.'
The career bureaucrat-turned-central banker walked into the 19th floor corner room of the Reserve Bank on December 12, 2018. Since February 2019, the Das-led RBI has cut the repo rate by a whopping 135 basis points to support the sagging growth, including an unprecedented 35 bps reduction in August. As he completes one year at the helm, woes in the NBFC sector, overall health of the banking sector and steeply falling economic growth are among the major challenges that needs to be tackled sooner than later.
According to bond dealers, the spike in CD issuance could indicate that liquidity won't remain as comfortable by the end of the financial year (March 31) as it now is.
Indian factory growth likely slowed in Jan, inflation to stay muted.
'Any normalisation exercise will bring its share of volatility.'
GST rate cut for real-estate, income transfer scheme, farm loan waivers execution and recapitalisation of PSU banks have the potential to boost India's growth in a few months, says Neelkanth Mishra.
Governor's statements will be weighed to gauge confidence level.
Watchdogs of the economy have not been barking and it is high time we noticed it, says Shreekant Sambrani.
'The assumed linear correlation between forced lower yields, higher bank borrowing from the RBI, higher lending, and higher growth involves leaps of faith, each a step on the quicksand of false beliefs,' warns Debashis Basu.
The Indian economy is on the path of a durable recovery on the back of conducive monetary and credit conditions, the global headwinds notwithstanding, said a Reserve Bank of India (RBI) article on the state of the economy. Domestically, there have been several positives on the COVID-19 front, in terms of reduced infections and faster vaccinations, the article published in the RBI Bulletin November 2021 added. The Indian economy, the article said, is clearly differentiating itself from the global situation, which is marred by supply disruptions, stubborn inflation and surges of infections in various parts of the world.
Benchmark indices failed to hold on to early gains and closed in the red for the seventh straight session on Thursday, with participants remaining in wait-and-watch mode ahead of the RBI's interest rate decision. Unabated selling by foreign funds added to the pressure, though a modest recovery in the rupee cushioned the fall, traders said. After rallying in early trade, the 30-share BSE Sensex came under selling pressure in the afternoon session and closed 188.32 points or 0.33 per cent lower at 56,409.96.
'The overall stress on asset quality is indeed coming down.'
The RBI on Wednesday cautioned that while the Indian economy appears capable of weathering the deterioration in geopolitical conditions amid the ongoing Russia-Ukraine war, it faces headwinds from global spillovers from geopolitical tensions, elevated commodity prices and moderating external demand. The RBI, however, did not tinker with the GDP growth projection made in April. It had slashed the GDP growth projection for the fiscal 2022-23 to 7.2 per cent from its earlier forecast of 7.8 per cent.
RBI's status quo on rates disappoints economists.
Relations between the Mint Road and North Block have often been frosty, with the former's calls for lowering rates being the biggest point of difference
The policy will be presented in the backdrop of rising inflation.
