India Inc's reactions to the RBI rate cut.
The Reserve Bank of India (RBI) may opt for a 25 per cent cut in the repo rate, to prop sagging demand in the interest rate-sensitive durables sector in the mid-term review of its 2007-08 monetary policy on October 30.The likely reduction in the repo rate would take place despite concerns about inflation, which suggest that interest rates can be left unchanged, banking sources said.
After falling substantially in the previous week, inflation rose marginally by 0.06 per cent to 7.87 per cent for the week ended September 11 mainly due to costlier manufactured products including some edible oils.
Consequently, the reverse repo rate under the LAF will remain unchanged at 7.5 per cent and the marginal standing facility (MSF) rate at 9.5 per cent.
This is the fourth consecutive time that the RBI has kept key interest rates unchanged despite clamours from the industry to cut rates to boost economy.
Reserve Bank Governor D Subbarao will, however, not touch the policy rate or the repo, rate at which RBI lends to banks, on October 30 when he unveils the half-yearly monetary policy because headline inflation continues to be elevated at 7-7.5 per cent, the agency said.
Public-sector banks, including Canara Bank and Bank of India, are tapping the infrastructure bond market. Canara Bank on Tuesday raised Rs 10,000 crore at a coupon rate of 7.40 per cent through 10-year infrastructure bonds. This comes after SBI on July 10 raised Rs 10,000 crore also through infrastructure bonds with a 15-year tenor at a coupon rate of 7.36 per cent.
When investing in fixed-income products, balancing considerations like safety, liquidity, and income is essential.
The Reserve Bank of India (RBI) on Monday directed banks and non-banking financial companies (NBFCs) offering gold loans to thoroughly review their policies, processes, and practices to identify any gaps. The central bank also told them to closely monitoring their gold loan portfolios amid significant growth observed in this segment vis--vis some lenders. Additionally, the RBI, through a circular, instructed these lenders to ensure adequate controls over outsourced activities and third-party service providers.
The Reserve Bank of India has raised the cash reserve ratio of banks by 0.5 per cent to 5 per cent of their net demand and time liabilities (NDTL), in two stages beginning fortnight September 18.
The key short-term lending rate (repo rate)has been hiked by 0.25 pc to 7.50 pc.
Concerned over surging inflation, Reserve Bank of India hiked the short-term repo rate on Wednesday by 0.25 per cent to 7.50 per cent while keeping reverse repo, bank rate and cash reserve ratio unchanged.
The principles of central banking in Asia are likely to change. Be prepared for surprises.
In a late Tuesday evening development, RBI raised the repo rate, or the rate at which it lends to banks, by 50 basis points to 8.50 per cent. The cash reserve ratio, or the proportion of deposits kept with the central bank, will be increased by 50 basis points to 8.75 per cent.
Hike in CRR to suck out Rs 12,500 crore from the banking system.
At its monetary review on Tuesday, the RBI raised the statutory liquidity ratio by 1 percentage point to 25 per cent and discontinued the special repo facility for banks to provide liquidity to mutual funds and others.
'There are occasions when the prices of individual items like food raise inflation; then supply-side measures must be taken.' 'But if there is continued inflation, it means liquidity is aggravating the situation.'
After hiking the repo rate by 0.50 per cent, RBI Governor Shaktikanta Das on Wednesday said future policy actions by the central bank will be guided by the evolving conditions. Addressing a press conference, the governor said the RBI has changed the policy stance to drop the phrase "remains accommodative", and instead opted for "withdrawal of accommodation" for guiding its future moves. The central bank did not hike the cash reserve ratio contrary to speculation, he said, adding that the liquidity withdrawal will be calibrated and measured.
The government has introduced friendly policies for the infra sector
The global brokerage firm believes that CRR cut is likely to help cut lending rates and revive growth sentiments.
The Reserve Bank of India on Tuesday hiked the cash reserve ratio by 25 basis points.
The RBI is likely to raise CRR, the portion of funds that banks have to keep with the regulator, by 50 basis points in its forthcoming monetary review next week and signal tight monetary measures, says Moody's.
The use of RBI capital to strengthen public sector banks will have many positive implications for the economy -- and a few manageable downsides, points out R Jagannathan.
Short-term lending rate unchanged at 7.75 pc.
The Reserve Bank of India on Tuesday cut the bank rate by 0.25 per cent to 6 per cent with effect from close of business hours.
The central bank was widely expected to maintain status quo.
Reserve Bank of India (RBI) Governor Sanjay Malhotra said the repo rate cut in the February meeting of the monetary policy committee (MPC) was due to inflation aligning with the target and recognising the fact that monetary policy is forward-looking.
The flow of money into Non-Resident Indians (NRIs) deposits witnessed a substantial increase, touching $2.14 billion in the first quarter of this financial year (Q1FY24), compared with $349 million in the same period in FY23. The outstanding NRI deposits rose by $2.5 billion, standing at $141.28 billion at the end of June 2023, up from $138.77 billion in May 2023, according to Reserve Bank of India (RBI) data. RBI released the updated data in the bulletin after almost three months.
RBI will be cautious easing rates further given oil price uncertainties
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SBI Chairman in the last year's banking conclave had started a debate by seeking to abolish cash reserve ratio to enhance liquidity in the banking sector for more productive use.
Amid liquidity tightness in the banking system, certificate of deposit (CD) rates topped 8 per cent for some smaller banks, with rates remaining on the higher side for derivatives loss-hit IndusInd Bank. On Thursday, CSB Bank raised Rs 100 crore via one-year CDs at 8.5 per cent, while Utkarsh Small Finance Bank issued three-month CDs at 8.05 per cent to raise Rs 50 crore.
The Reserve Bank of India on Thursday decided to keep policy rate unchanged for third time in a row as it maintains heightened vigil on inflation. The rate increase cycle was paused in April after six consecutive rate hikes aggregating to 250 basis points since May 2022.
The Reserve Bank of India is likely to take a call on the relaxations sought by HDFC Bank in relation to the merger, as the date of merger draws closer, sources said. The HDFC twins, which announced their decision to merge in April last year, received National Company Law Tribunal's (NCLT's) approval recently - a key milestone to close the deal in due time. The management of both the entities had said that it will take 15-18 months for the merger.
The Reserve Bank of India has kept the key short term lending rate (repo rate) unchanged at 7.25%.
State Bank of India (SBI), India's largest lender, is looking to raise Rs 10,000 crore through 15-year infrastructure bonds as early as next week, said multiple sources aware of the development. Market participants expect a coupon in the range of 7.15-7.18 per cent for SBI's upcoming infrastructure bond issuance. This comes as demand for longer-tenor papers has remained strong in recent domestic capital market offerings.
The Reserve Bank is expected to go for another rate hike of 0.40 per cent at the scheduled review of the monetary policy next week, a foreign brokerage said on Friday. The central bank's rate setting panel will follow it up with a 0.35 per cent hike in rates at the next review in August, or make it into a 0.50 per cent hike next week and a 0.25 per cent increase in August, to make the total quantum of rate hikes at 0.75 per cent, the report by Bofa Securities said. On May 4, the Reserve Bank of India (RBI) hiked rates by 0.40 per cent, and Governor Shaktikanta Das has already called a rate hike at the forthcoming review as a "no brainer" given the pressure to maintain its core mandate of inflation in the targeted band of under 6 per cent.
Financial markets are under stress and require steps by the central bank for market stability and revival of economic growth, he said while announcing the decisions taken by the Monetary Policy Committee in Mumbai.
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