Two members recommended bringing down the rate by 50 bps in the April policy.
The S&P BSE Sensex shed 119 points to close at 27,977 and the Nifty50 dropped 45 points to finish at 8,591.
Equity markets will look for directions from global trends, ongoing quarterly earnings and investment patterns of foreign institutional investors (FIIs) in a holiday-shortened week ahead and may encounter volatility amid the scheduled monthly derivatives expiry, according to analysts. Equity markets will remain closed on Wednesday on account of 'Republic Day'. "This week is a holiday-shortened one and it's going to be critical due to the list of events and data that are lined up.
To cut interest rates, the central bank head has to open up a debate on inflation target revision.
The broader NSE Nifty closed 1.25 points, or 0.01 per cent down at 10,564.05.
The bond market expects at least 25 basis points cut in the June 6 policy.
Since last month, the realty (down 23%), auto (down 16%) and finance (down 14%) indices have underperformed the market by falling over 13%, as against 8% decline in the benchmark indices
Experts have started giving comments on provisions that the govt must make in Budget 2016-17.
The mismatch between industrialists' demand and account holders is because of inflation, Rajan said.
Finance Minister Arun Jaitley said RBI and the government are in continuous dialogue and that relationship will continue.
For the first time, the value of card and mobile payments of Rs 10.57 trillion was more than ATM withdrawals of Rs 9.12 trillion in Q4 of fiscal 2019-20. In the months of lockdown, the gap may have widened further, but cash could be back in vogue when the situation normalises.
The wider Nifty hit a low of 10,033.35 before finishing at 10,044.10, down 74.15 points or 0.73 per cent.
RBI said inflation in the second half of the current fiscal is projected at 2.7-3.2%. It retained its GDP forecast for the current fiscal at 7.4%
'Trust your new governor,' Omkar Goswami advises RBI Deputy Governor Viral Acharya. 'Just because he is from the IAS and doesn't carry a PhD from a US university does not make him unsuitable for the task.' 'If anything, Das will pour oil on troubled waters, and save the RBI's reputation.'
"The poor will not suffer disproportionately due to bouts of sharp inflation, and the middle class will not see its savings eroded," Raghuram Rajan said.
Central bank moves to infuse liquidity into bond market to help boost sentiment.
The speed at which he led the central bank in different areas -- ranging from internal reorganisation to inflation fighting, stabilising the currency, taking on rogue corporations, cleaning up bank balance sheets, and opening the sector -- makes one believe that Rajan knew he had only three years to do his job. A fascinating excerpt from Tamal Bandyopadhyay's MUST-READ Roller Coaster: An Affair with Banking.
Ajay Banga was on Wednesday appointed the next president of the World Bank, becoming the first-ever Indian-American to head the global financial institution which said it looks forward to working with him at a time when it's tackling the toughest development challenges facing developing countries. "The executive directors of the World Bank today selected Ajay Banga as president of the World Bank for a five-year term beginning June 2, 2023," the bank said in a press statement. In February, President Joe Biden announced that the US would be nominating Banga, 63, to lead the World Bank because he is "well equipped" to lead the global institution at "this critical moment in history."
Instead of a rate hike, or even a pause, there could be a window for the RBI for an interest rate cut
Raghuram Rajan speaks on the unscheduled rate cut.
Given that there are hundreds of players in the shadow banking space, it's hard to make a credible estimate of potential NPAs. That creates more scope for panic, says Devangshu Datta.
Taking advantage of the RBI's different accounting year, the Centre had started demanding an interim dividend till the time the latter's final balance sheet is prepared (usually in August). To address this anomaly, an expert committee led by former RBI governor Bimal Jalan had recommended aligning the RBI's financial year with that of the government.
RBI lowered economic growth for the current fiscal to 6.9 per cent from the previously projected 7.1 per cent, but saw it bouncing back in a big way to 7.4 per cent in 2017-18.
'We get to know secrets such as some of India's top-rated firms do not always make payments when due and many State-owned, listed, enterprises that borrow in bond markets default regularly.' 'Without naming the bank, he says that ever-greening of poor loans by a part of India's shadow banking lay at the doorstep of India's banking, notably 'one private bank'.' Viral Acharya's Quest for Restoring Financial Stability in India won't be music to many ears, observes Tamal Bandyopadhyay.
"Kharge dissents regularly," the minister said.
Expressing serious concern over contraction in industrial output in November, India Inc called for immediate policy interventions, including a rate cut by RBI, to prevent job losses and boost demand.
Industry players said they were indeed seeing a serious fall in capacity usage, though some sectors were seeming to prevent further fall in the overall capacity utilisation.
For the week, the battered rupee gained 26 paise against the greenback
The bank remains on high alert to intervene if markets freeze.
As per the RBI Act, the central bank has to have four deputy governors.
The public sector banks are not in a position to cut rates because of their weak balance sheets and massive portfolios of non-performing assets, says Devangshu Datta.
Inflation targeting framework is now enshrined as a formal agreement by the government and the RBI; thus, it may seem that we are flogging a dead horse, says Soumya Kanti Ghosh.
A smartly executed reform-recap will be the best booster for the economy, says Ajay Chhibber.
As inflation rate is near the upper limit of the comfort zone, experts rule out rate cuts anytime soon
Rajan tells RBI colleagues he will be returning to academics
Hardening prices of manufactured items during the month may refrain the Reserve Bank of India from cutting rates in its policy review on February 8.
The size of the Reserve Bank's balance sheet, which is reflective of activities carried out by it in pursuance of currency issue function as well as monetary policy and reserve management, has increased by 6.99 per cent during the nine-month period ended March 31, 2021. While income for the year decreased by 10.96 per cent, the expenditure decreased by 63.10 per cent, as per the RBI's Annual Report for 2020-21. The year ended with an overall surplus of Rs 99,122 crore as against Rs 57,127.53 crore in the previous year, representing an increase of 73.51 per cent, it added.
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.
State Home Minister Tamradhwaj Sahu said that in 2013-14, the state had received Rs 50 crore for police modernisation from the Centre. The allocation has come down to Rs 20 crore right now.
The previous high GDP growth of 8.1 per cent was recorded in April-June quarter of 2016-17.
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