Banks may reduce their interest rates.
Heading to the third year, will Urjit Patel be busy firefighting a currency crisis? Almost no governor of the RBI managed to evade it and Patel perhaps knows it.
Economists and investors want RBI to retain independence in setting rates
RBI will now increasingly shift focus to domestic parameters
The government on Wednesday asked the Reserve Bank to maintain retail inflation at 4 per cent with a margin of 2 per cent on either side for another five-year period ending March 2026. To control the price rise, the government in 2016 gave a mandate to the RBI to keep the retail inflation at 4 per cent with a margin of 2 per cent on either side for a five-year period ending March 31, 2021.
TCS, Power Grid and Infosys are among the top S&P BSE Sensex gainers
Exposure to debt funds and gold is essential even if current returns from these asset classes are low, suggests Sanjay Kumar Singh.
The RBI said that the impact of unseasonal rains is still unfolding.
"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.
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.
"We did not abuse RBI governors," says Chidambaram.
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.
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%
The report said efforts to stabilise the economy through monetary policy interventions need to be complemented by appropriate fiscal policy measures.
Any market correction, analysts say, would be an attractive entry point for risky assets, which should do well over the medium-to-long term.
'When you need to revive the economy, when you need to revive aggregate demand, you cut taxes.' 'But what's this government doing?' 'It's increasing taxes for the middle class and the vast majority of the poor on fuel, which has a ratchet effect on most other products.'
SBI Chairperson Arundhati Bhattacharya said any rate cut by the bank would depend on a lot many factors.
In its mid-quarter review of monetary policy, RBI on Wednesday kept all key interest rates unchanged notwithstanding persistent high inflationary pressure.
The market direction will be guided by corporate earnings, especially the oil & gas companies, since they were responsible for earnings disappointment in the past quarter as well.
Only three of India's 45 commercial banks have cut base lending rates since the Reserve Bank of India's surprise easing this month, hurting the government's drive to lift business investment.
Amid an increase in localised lockdowns across the country, Reserve Bank Governor Shaktikanta Das on Wednesday said there is no need for a loan repayments moratorium at present, stating that businesses are better prepared to face the situation. It can be noted that the RBI had announced a six-month moratorium in the early days of the national lockdown last year to help borrowers impacted by a chilling in economic activity. The entire state of Maharashtra is in a lockdown for non-essential services and localised and night lockdowns are being observed in many pockets of the country, including the national capital, to restrict the surge in cases.
A two-year extension at the helm of the RBI still looks a real possibility
The former RBI Governor also emphasised on the need to boost economic productivity and attract investments.
'He is positive and likes to get work done,' is how a retired bureaucrat described him. 'I assume he will push the reform agenda with strength.'
The Reserve Bank of India unexpectedly raised its policy interest rate on Tuesday by 25 basis points (bps) but said that if consumer price inflation eases as projected, it does not foresee further near-term tightening.
From the 30-Sensex pack, 26 stocks ended with gains led by Tata Steel and ICICI Bank
The flawed response to the crisis has fed a us-vs-them mentality in which the banker, the expert, the coastal entrepreneur, the immigrant, the foreigner are all villains. The crisis was not that much of a problem; the response -- the over-reaction, the sovereign debt build-up and the lasting anger -- is the problem, says Mihir S Sharma.
The International Monetary Fund (IMF) has said India and China will account for half of the global economic growth in 2023, as the multilateral agency retained its growth forecast for Asia's third-largest economy for 2023-24 (FY24). "India remains a bright spot. Together with China, it will account for half of global growth this year, versus just a tenth for the US and euro area combined," the IMF said in its latest update to the biannual World Economic Outlook. Growth in India is set to decline from 6.8 per cent in 2022 (FY23) to 6.1 per cent in 2023 (FY24) before picking up to 6.8 per cent in 2024 (FY25), the global lender said while citing "resilient domestic demand despite external headwinds".
Echoing Prime Minister Narendra Modi's views that improving the health of financial markets alone cannot fuel growth, G20 business leaders on Friday said vigorous efforts should be made to go beyond fiscal and monetary policy to kickstart world economy and create jobs.
The real requirement for the finance minister's explanatory speech is to explain the measures taken in the Budget to influence inflation and growth not just through the announcement of a deficit goal, but more broadly through the impact on money supply, consumer demand, foreign trade and investment, explains Nitin Desai.
Outperforming peers following a crisis in the debt markets is an act that ICICI Prudential Asset Management Company fund manager Manish Banthia has pulled off more than once.
Rajan's departure from the RBI is an end to 'outside interference' in policy making, government insiders feel.
After Urjit Patel's appointment as RBI governor-designate, the bond market witnessed a sell-off, as it became evident that there won't be any significant change in stance
Bajaj hit out at banks for not passing the entire benefits to consumers.
Mishra, a 1967 batch Indian Administrative Service officer from the Uttar Pradesh cadre, has served in various administrative field positions.
The year 2014-15 could well go as one of long-pending financial sector reforms, expected to have a lasting impact.
CREDAI Chairman Lalit Jain said a long term status quo on interest rates would not help prospective home buyers.
Kaushik Basu, whose stint at the World Bank ends on July 31, was being looked at as a serious contender, the sources said
Inflation has remained a major concern.
Reserve Bank of India Governor Shaktikanta Das tells Anup Roy, Raghu Mohan and Niraj Bhatt that it is time for banks to lower interest rates and start lending to cash-starved finance companies after due credit appraisal and proper risk assessment.
