It is the six per cent target RBI is more concerned about.
Following the meeting, Subbarao said the central bank will look into the latest inflation numbers before coming out with the monetary policy review.
.jpg)
Markets ended tad lower with financials declining the most ahead of RBI policy review tomorrow.
Speaking at the Business Standard Banking Round Table in Mumbai on Monday, five of the six bank chiefs said 'no' when asked whether RBI should raise rates in the second quarter review of the monetary policy on October 25.
The Reserve Bank on Friday projected retail inflation to be in 5-5.2 per cent range during the first half of the next fiscal year, expecting further softening of vegetables prices in near term. Also, it has lowered the retail inflation forecast for the current January-March quarter of 2020-21 fiscal at 5.2 per cent. The Reserve Bank (RBI) has kept the key policy rate unchanged at 4 per cent, with an accommodative stance, so as to ensure that inflation remains well within the target, Governor Shaktikanta Das said while announcing the last monetary policy of 2020-21.
For July-September, it pegged CPI-based retail inflation at 4.2 per cent which it saw firming up to 4.8 per cent in the second half of the current fiscal.
India Inc has pitched for rate cut to boost economic activities.
The Reserve Bank of India kept interest rates unchanged at 8.0 percent on Tuesday as widely expected, staying focused on containing inflation while adopting a more dovish tone in response to the government's call for help to revive economic growth.
The Reserve Bank of India on Monday gave strong hints of another hike in its key interest rates at the policy review on Tuesday, saying that high inflation requires further monetary tightening, slowdown in growth notwithstanding.
'Overall, domestic demand has moderated significantly. 'The weakening of private consumption, which for long has been the bedrock of aggregate demand, in particular, is a matter of concern,' RBI Governor Shaktikanta Das said in the MPC meetings, in October.
Costlier onion and other vegetables pushed up inflation for the third month in a row to 6.1 per cent in August, making it difficult for the RBI to cut rate in the monetary policy review due later this week.
The Reserve Bank may be hitting the end of its tolerance for high inflation and will most likely hike interest rates in the first half of 2022, analysts said on Friday. The central bank will also start rolling back its accommodative policies which have led to easy liquidity conditions, they said. The view from analysts came even as inflation cooled down to 5.6 per cent for July, after two months of breaching the upper end of the RBI's tolerance band of 6 per cent.
Rajan had overturned the majority opinion of the members and chose to hold the rates at the last monetary policy review in October.
The CPI and WPI data for December 2013 holds the key for the third-quarter monetary policy review to be announced later this month.
Despite inflation easing, experts see RBI maintaining status quo on Dec 2
.jpg)
The rupee had earlier this month touched a life time low of 61.21 to a dollar.
Six out of eight monetary policies announced by him during his entire tenure so far have been on Tuesdays
Foreign portfolio investors' (FPIs') net investments in the domestic debt market surged in December, marking a 77-month high, that is, since July 2017. According to market participants, this significant uptick in FPI inflows can be attributed to the post-domestic policy outcome and the US Federal Reserve's dovish stance at the December policy. FPI inflows into debt stood at Rs 18,393 crore in December against Rs 14,106 crore in November, according to data on the National Securities Depository Limited.
Shifting its stance of monetary policy towards targeting retail inflation as it is an "inequitable tax", RBI today said it may exceed 8 per cent by March end and efforts will continue to bring it down.
After fighting inflation for more than two years, Reserve Bank of India (RBI) Governor Duvvuri Subbarao finally managed to bring it below the five per cent level - the tolerance level of the central bank - in FY14.
Reserve Bank-sponsored professional forecasters on Monday scaled down India's growth projection to 4.8 per cent for the current fiscal from 5.7 per cent estimated earlier.
In the Union Budget for Financial Year 2023-24 (FY24), Finance Minister Nirmala Sitharaman had held forth on the need for better governance and investor protection in the banking sector. She had proposed certain amendments to the Reserve Bank of India Act (RBI Act), 1934; the Banking Regulation Act (BR Act), 1949; and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970.
The HSBC India Composite Output Index, which maps both services and manufacturing activity, fell to 48.4 in July, down from 50.9 in June, indicating an overall contraction.
RBI Governor Raghuram Rajan on February 2, left the key interest rate unchanged citing inflation.
.jpg)
The Reserve Bank is scheduled to unveil its first quarter review of the monetary policy on July 30.
Reserve Bank Governor Raghuram Rajan is widely expected to hold the key rates citing high inflation at the fourth bi-monthly monetary policy announcement on Tuesday, even though the pro-growth lobby has been wishing for a rate cut.
Private sector output in India expanded for the first time in 8 months in February as slump in the services sector moderated and manufacturing grew at a stronger pace, an HSBC survey said.
Rating agency Icra on Wednesday said while there is some evidence of the economic recovery becoming broad-based in the third quarter of fiscal 2022, it is yet to attain the durability being sought by the Monetary Policy Committee (MPC) as a precursor to policy transmission. The agency expects the real GDP to expand 6-6.5 per cent year-on-year in the third quarter of FY2022 (+8.4 per cent in Q2 FY2022). It also sees the RBI maintaining the status quo in the upcoming monetary policy review to be held in February.
Retail inflation dipped marginally to 6.44 per cent in February, mainly on account of a slight easing in prices of food and fuel items though it remained above the Reserve Bank's comfort level of 6 per cent for the second month in a row. As per the government data released on Monday, the Consumer Price Index (CPI)-based inflation was at 6.52 per cent in January and 6.07 per cent in February 2022. The retail inflation rate for the food basket worked out to be 5.95 per cent in February, marginally lower than 6 per cent in January.
Rajan said it was important that the government and the RBI be vigilant to the growth scenario.
Achieving inflation target of 4 per cent, recovery after remonetisation and hardening profile of oil prices are some of the risks which the RBI is watching closely, says Gaurav Kapur.
The central bank had nudged banks to cut lending rates.
RBI may go for a 25-basis point cut at its February policy meet.
The stronger than expected monsoon has not yet softened food inflation as much as it should have and in particular, vegetable prices have been impacted by weather-driven supply disruptions, said RBI Governor D Subbarao while unveiling the first quarter monetary policy review.
With pricing power of producers unlikely to strengthen and commodities ex-crude oil likely to remain sluggish in the immediate term, the core-WPI inflation may remain sub-zero in the rest of this calendar year.
If this turns into reality, India's gross domestic product (GDP) growth will be the lowest since 2012-13, which could severely hit job creation and income growth in the near term.
"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 SBI report, however, said the economic growth rate will pick up pace in 2020-21 to 6.2 per cent.
In the June quarter of FY24, 51 per cent of consumers who took small-ticket personal loans already had more than four credit products at the time of accessing yet another new loan, compared with just 17 per cent in the June quarter of FY20, points out Tamal Bandyopadhyay.
© 2026 Rediff.com - Investor Information - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances