In a first, the Reserve Bank of India (RBI) has announced that it will conduct daily variable rate repo (VRR) auctions on all working days in Mumbai, until further notice. The daily auctions, aimed at easing the current liquidity tightness in the banking system, will begin on Friday, with a notified amount of Rs 50,000 crore.
While liquidity in the banking system has turned surplus in the last few weeks, it could go back to deficit again, mainly due to corporate advance tax outflows. The net liquidity surplus of the banking system rose to touch Rs 1 trillion on Tuesday on the back of government spending, according to the data released by the Reserve Bank of India.
The Reserve Bank of India has raised inflation projection to 6.5 per cent with an upside bias by this fiscal end from 5 per cent projected earlier.
What is the reason behind this drying up of talent for the top post in private banks?
The Reserve Bank of India on Friday cut short-term lending rate by 0.25 per cent.
After investing a staggering amount in May, foreign investors turned net sellers with a withdrawal of Rs 8,749 crore from the Indian equity markets in the first week of this month triggered by renewed US-China trade tensions and rising US bond yields. This momentum follows a net investment of Rs 19,860 crore in May and Rs 4,223 crore in April, data with the depositories showed.
Infrastructure bonds, which were relied upon the most in 2024-25 (FY25) by commercial banks to raise funds through the domestic debt capital market amid lagging deposit growth, seem to have lost their sheen in FY26. So far in FY26, no bank has tapped the domestic debt capital market to raise funds via infra bonds, and the expectation is that the amount raised through this route will be significantly lower than that last year, unless credit demand picks up.
The Reserve Bank of India said it would attempt to bring down inflation from 11-12 per cent to 7 per cent by March, 2009.
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.
The industry also emphasised on supply-side interventions by the government to tackle persistently high food inflation.
The RBI, however, kept other key rates and ratios like repo, reverse repo and cash reserve ratio unchanged.
There are however, enough dovish signals in the governor's statement to indicate a pro-growth policy going forward.
The RBI has flagged concerns over rising volatility in gold prices and advised lenders to exercise caution in the gold loan segment.
Challenged by unrelenting inflationary pressures, Reserve Bank on Tuesday announced stringent measures of hiking mandatory cash reserve of the banks and its short-term lending rate to them to suck up an estimated Rs 20,000 crore (Rs 200 billion) -- a move that could make loans dearer for housing, car and personal expenses as also to the industry.
Prime Minister's Economic Advisory Council Chairman C Rangarajan on Tuesday called RBI's policy action a "wise decision". The liquidity easing measures will have an impact on interest rates, he said.
While the IT stocks traded firm since the start of the day, the BSE IT index soared to a 10-year high.
Snapping its six-day losing streak both benchmarks rallied over 1% after RBI kept key policy rates unchanged.
'The central bank has highlighted that the slowdown in growth has been limited to a few sectors and overall growth is expected to pick up in the second half of the year.'
The interest rate is the RBI's best bet for keeping the economy close to the 'normality' benchmark.
The Reserve Bank of India (RBI) may not go in for key policy rate cuts in its quarterly policy review slated for January 23, said a senior finance ministry official.
The change in stance to neutral from accommodative in the June monetary policy meeting does not necessarily signal that the Reserve Bank of India's (RBI's) rate setting body - monetary policy committee (MPC) - will go on a prolonged pause on rate cuts going forward, believe experts.
The bank kept cash reserve ratio unchanged at 6 per cent.
The central bank held the cash reserve ratio at 4 per cent.
The economists, polled by industry body Federation of Indian Chambers of Commerce and Industry, said the RBI may raise the cash reserve ratio, which is a portion of deposits that banks keep in cash with the central bank, by 50 basis points to 5.5 per cent, although this would have no impact on containing inflation.
What impact will this hike in RBI rates have on the banks and industries? What do the bankers have to say? How is India Inc reacting to the rate change?
The Reserve Bank of India has launched an assault on inflation by increasing the cash reserve ratio (CRR) 75 basis points to 5.75 per cent. While sounding upbeat on economic growth, the central bank has kept the door open for an increase in interest rates even before the annual policy statement in April.
'Credit growth in India remains in double digits, even though corporate borrowing is subdued.' 'Corporate credit is weak because companies are cash-rich and cautious amid global uncertainty.'
CRR is the proportion of deposits each bank must keep in the form of cash.
The central bank raised statutory liquidity ratio, the portion of deposits that banks are required to keep in government securities, by 100 basis points to 25 per cent. Other key rates were unchanged.
The Reserve Bank on Friday eased money supply further by cutting key policy rates and ratios - decisions that would among other things infuse Rs 20,000 crore (Rs 200 billion) into the banking system.
Reserve Bank of India said on Thursday it is looking at liquidity, inflation and credit growth to see if it will have to take more steps to tighten monetary conditions.
'Given the lag in transmission, further softening of lending rates may happen in the coming months.'
S&P Global Ratings on Tuesday said the Indian economy is set for "resilient growth" in 2025 and projected inflation pressure to recede which will lead to "modest" easing of the monetary policy by the RBI. In its India outlook for 2025, S&P also retained India's growth forecast for current fiscal at 6.8 per cent, followed by 6.9 per cent growth in 2025-26.
The Reserve Bank has kept the key policy rates unchanged, while the Cash reserve Ratio (CRR) has been cut by 25 bps to 4.25%.
The Reserve Bank has kept the key policy rates unchanged in its Mid-Quarter Monetary Policy Review.
The RBI's assessment of the economy, presented as a prelude to the policy announcement, was relatively downbeat. Conceding the persistence of a hostile global environment and domestic weakness, the RBI expects GDP growth during 2009-10 to be 6 per cent. This is slightly higher than the 5.7 per cent that reflects the median of its external forecasters' survey.
The Reserve Bank of India on Tuesday left all the key interest rates unchanged in the first quarterly review of the monetary policy.
Industry body Confederation of Indian Industry said with the government having announced a clear road map for fiscal consolidation and non-food inflation demonstrating a secular decline, conditions are conducive for RBI to have intervened with a repo and cash reserve ratio reduction.
High inflation continues to be an obstacle in lowering policy rates as of now.
