The US Fed rate cut of 50 basis points is unlikely to have any significant impact on foreign inflows into India, Economic Affairs Secretary Ajay Seth said on Thursday. He said the US Federal Reserve has done what it assesses is good for the largest economy in the world, but the RBI will take a decision on interest rate cut keeping the Indian economy in mind. "It is a positive for the global economy, including the Indian economy. "It is a 50 basis points cut from a high level.
Rajan was expected to join the search committee to appoint three external members of a new six-member RBI Monetary Policy Committee
The RBI is likely to reduce the key interest rate by 25 basis points this week after keeping it on hold for two years, complementing the Union Budget initiatives to push consumption-led demand, though the sliding rupee continues to be a concern. As the retail inflation has remained within the Reserve Bank's comfort zone (less than 6 per cent) for most of the year, the central bank can take rate action to boost growth hit by sluggish consumption, opined experts.
The Reserve Bank on Friday retained inflation projection at 4.5 per cent for the current financial year, lower than 5.4 per cent in the last fiscal. Assuming a normal monsoon this year, CPI (consumer price index-based) inflation for the current year is projected at 4.5 per cent, with Q1 at 4.9 per cent, Q2 at 3.8 per cent, Q3 at 4.6 per cent, and Q4 at 4.5 per cent.
The Reserve Bank of India on Thursday marginally lowered its inflation projection for the current financial year to 5.1 per cent, as Governor Shaktikanta Das said the central bank's monetary policy actions are yielding the desired results. In April, the Reserve Bank had estimated the consumer price index (CPI) based retail inflation at 5.2 per cent during the fiscal 2023-24. CPI inflation fell sharply to 4.7 per cent in April 2023, from 6.4 per cent in February, on the back of favourable base effects, with softening observed across all the three major groups.
The Reserve Bank of India on Friday decided to keep the policy rate unchanged at 6.5 per cent for the fifth time in a row as it maintains a tight vigil on inflation. The rate increase cycle was paused in April after six consecutive rate hikes, aggregating to 250 basis points since May 2022. Announcing the bi-monthly monetary policy, RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) unanimously decided to keep the repo rate unchanged at 6.5 per cent.
The Reserve Bank of India (RBI) has projected retail inflation at 4.2 percent for the next financial year beginning April while retaining the forecast for 2024-25 at 4.8 percent. The central bank attributed the expected easing of inflation to good kharif production, winter-easing in vegetable prices and favorable rabi crop prospects. However, the RBI also noted that continued uncertainty in global financial markets coupled with volatility in energy prices and adverse weather events presents upside risks to the inflation trajectory.
The weakening of inflation, prospects of economic growth, geopolitical uncertainty and comfortable system liquidity may result in the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) to cut the repo rate by another 25 basis points, opine top economists. They also said the external economic pressures like trade policies and others would require continued RBI's accommodative stance and policy support for the Indian industry to sustain the growth.
Retail inflation eased to a nearly six-year low of 3.16 per cent in April mainly due to subdued prices of vegetables, fruits, pulses, and other protein-rich items, creating enough room for the Reserve Bank to go for another round of rate cut in the June monetary policy review. The Consumer Price Index (CPI) based inflation was 3.34 per cent in March and 4.83 per cent in April 2024. It was 3.15 per cent in July 2019.
'Once bitten, twice shy, I didn't take up the challenge this time...' 'I realised I had failed to follow my karma because I feared failure.'
Amid a debate on the basis of a monetary policy stance, one may be curious enough to know how non-food retail inflation has behaved over the years in India. Let the eager souls catch a glimpse of facts. In the past 10 years, non-food inflation came down below 4 per cent on two occasions - pre-Covid period of 2019-20 and now in the first four months of the current financial year (FY25).
The Reserve Bank of India (RBI) is expected to cut interest rates for the first time in nearly five years in Governor Sanjay Malhotra's first monetary policy committee (MPC) meeting on Wednesday. The meeting of the six-member MPC, which will culminate on Friday, aims to boost sluggish economic growth, which is seen falling to a four-year low. Malhotra took charge as the 26th RBI governor in December last year.
Days after the US Fed raised the interest rate, the RBI may go in for its third consecutive policy rate hike by at least 35 basis points to check high retail inflation, experts said. The central bank has already announced to gradually withdraw its accommodative monetary policy stance. The Reserve Bank of India's rate-setting panel -- the Monetary Policy Committee -- will meet for three days from August 3 to deliberate on the prevailing economic situation and announce its bi-monthly review on Friday.
The Reserve Bank of India on Friday retained its projection for retail inflation at 4.5 per cent for the current fiscal assuming a normal monsoon, while emphasising that uncertainties related to food price outlook warrant a close monitoring. Consumer Price Index (CPI)-based retail inflation has been projected at 4.5 per cent with quarter-wise projections at 4.9 per cent in Q1 (April-June), 3.8 per cent in Q2, 4.6 per cent in Q3, and 4.5 per cent in Q4.
Host of lenders led by State Bank of India (SBI) and Bank of India hiked lending rates after the Reserve Bank raised the benchmark interest rate to tame inflation. The hike has been effected in their benchmark rate linked to the repo rate, which increased by half a percentage point to 5.9 per cent. Even financial institutions like mortgage lender HDFC Ltd hiked the lending rate by 50 basis points effective Saturday.
A day after his appointment as the 26th governor of the Reserve Bank of India (RBI), outgoing Revenue Secretary Sanjay Malhotra on Tuesday said one must understand the economic landscape and do what was best for the economy. "Let me first go, join, understand the turf ... Here it is a different role," Malhotra said, speaking to reporters in front of North Block.
The Indian services sector growth touched an 11 month high in July, supported by a pickup in new exports orders and sharp rise in overall sales, a monthly survey said on Tuesday. The seasonally adjusted HSBC India Services PMI Business Activity Index was at 60.5 in July, little-changed from 60.4 in June, and the rate of expansion was the best seen since August 2024.
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 on Friday decided to keep the policy rate unchanged for fourth time in a row as it maintains a tight vigil on inflation. The rate increase cycle was paused in April after six consecutive rate hikes aggregating to 250 basis points since May 2022. Announcing the bi-monthly monetary policy on Friday, RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) unanimously decided to keep the repo rate unchanged at 6.5 per cent.
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.
'If it doesn't, it will continue with measures to infuse liquidity, signalling a new cycle,' predicts Tamal Bandyopadhyay.
The Reserve Bank's rate-setting panel began its three-day deliberations on Monday to decide the next monetary policy amid expectations that the central bank will maintain status quo on the benchmark interest rate in the backdrop of global scare due to the new coronavirus variant Omicron. Reserve Bank Governor Shaktikanta Das headed six-member Monetary Policy Committee (MPC) is scheduled to announce the policy resolution on Wednesday. If the RBI maintains status quo in policy rates on Wednesday, it would be the ninth consecutive time since the rate remains unchanged.
Deputy Governor Michael Patra warned about the spillover effects of food inflation.
The Reserve Bank of India's (RBI's) job to bring down inflation is not over, and any premature move on the policy front could undermine the success achieved so far on the price situation, according to RBI Governor Shaktikanta Das. RBI's rate setting panel, Monetary Policy Committee (MPC), had met for three days from February 6-8. The panel decided to leave the key policy rate unchanged at 6.5 per cent for the sixth time in row.
Sanjay Malhotra takes charge as the 26th RBI governor at a time when headline retail inflation has shot up to 6.2%.
'Deposit and lending rates have started to fall considerably. It is likely to spur investment and consumption of durables.'
Mixed views were expressed by top economists on the Reserve Bank of India's (RBI) Monetary Policy Committee's (MPC) decision to hold the repo rate at 5.5% and maintain a neutral stance. While some say the decision was as expected and one more rate reduction is expected this fiscal, there is also a view that rate cut by MPC was warranted given the evolving global situation.
With the setting of MPC, the interest rate setting powers would move from RBI Governor to the panel.
The Reserve Bank of India on Friday raised the retail inflation target for the current financial year to 5.7 per cent on the back of rising global prices amidst the ongoing geo-political tensions, even as it expected the prices of cereals and pulses to soften on prospects of good winter crop harvest. "Global food prices along with metal prices have hardened significantly. "Economy is grappling with a sharp rise in inflation... Inflation is now projected at 5.7 per cent in 2022-23 with Q1 at 6.3 per cent; Q2 at 5 per cent; Q3 at 5.4 per cent and Q4 at 5.1 per cent," RBI Governor Shaktikanta Das said while unveiling the first monetary policy review for the current fiscal year.
Benchmark equity indices Sensex and Nifty pared early gains to settle lower on Wednesday due to late selling in index major Reliance Industries, ITC and HDFC Bank even as the RBI took the first step towards a rate cut in its monetary policy review. Erasing its early gains, the 30-share BSE Sensex fell 167.71 points or 0.21 per cent to close at 81,467.1. During the day, it surged 684.4 points or 0.83 per cent to hit an intra-day high of 82,319.21.
While participants in the domestic financial market are expecting a 25 basis-point policy repo rate cut in the December meeting of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), economists remain torn between a reduction in rate cut and a pause.
Wholesale inflation fell to a 3-month low of 2.04 per cent in July on decline in prices of food items especially vegetables, government data released on Wednesday showed. The decline in wholesale price index (WPI) based inflation in July came after it rose for four months in a row till June, when it was 3.36 per cent. It was (-) 1.23 per cent in July last year. In April wholesale inflation stood at 1.19 per cent.
"The Monetary Policy Committee recognises that there is monetary policy space for future action. However, given the evolving growth-inflation dynamics, the MPC felt it appropriate to take a pause at this juncture," the RBI said in its fifth bi-monthly monetary policy for this fiscal.
Shaktikanta Das will demit the office on Tuesday after completing six years as the 25th Governor of the Reserve Bank of India. Revenue Secretary Sanjay Malhotra will replace him as the 26th Governor. He was appointed as the Governor on December 12, 2018, after the abrupt exit of Urjit Patel.
From the 30-share pack, Adani Port, Bharti Airtel, Asian Paints, IndusInd Bank, Bajaj Finserv, Reliance Industries, Infosys, UltraTech Cement, HDFC Bank, HCL Technologies and ICICI Bank were among the laggards. Tata Motors, Axis Bank, Maruti, Larsen & Toubro, ITC and Tata Steel were among the gainers.
The central bank's next monetary policy review is scheduled for April 5. It had kept the policy rate unchanged in its February meeting on fears of inflation.
Maintaining 4 per cent inflation is appropriate for India as targeting a lower rate could impart deflationary bias to the monetary policy, said a Reserve Bank paper. Under the current dispensation, the RBI has been mandated by the government to maintain retail inflation at 4 per cent with a margin of 2 per cent on either side. The paper, authored by RBI Deputy Governor Michael Debabrata Patra and another official Harendra Kumar Behera, has found a steady decline in trend inflation to 4.1-4.3 per cent since 2014.
State Bank of India, Adani Ports, Tata Consultancy Services, ICICI Bank, Reliance Industries and PowerGrid were also among the laggards.
Here are the highlights of the monetary policy announced by RBI governor Shaktikanta Das on Friday.
'The statistical confidence bands of the fan charts of the forecasts will provide a better sense of the potential variability of outcomes.'
