'We are very watchful about inflation and growth. But the main challenge is economic revival and growth.'
The poll of over 30 economists, taken in the past week, showed Asia's third largest economy will expand 7.8 percent in the fiscal year ending March 2017.
'There are deeper, underlying, forces at work and we need institutional arrangements to guard against them.'
Given the various risks to growth, one could argue for rate cuts to be deeper than the 5 per cent terminal repo rate that we are projecting at this stage, says Kaushik Das.
The industrial output for the third month in a row remained in the negative territory, contracting 1.5% in January
One incident should not be used to generalise the health of all cooperative banks, says RBI governor Shaktikanta Das.
With inflation remaining at elevated levels, central banks around the world, including the Reserve Bank of India (RBI), will kill excess demand in economy over the next six to eight months, sources in the know said. They also indicated that there could be a rate hike in June, when the inflation forecast for the current financial year would be raised. The RBI, the sources said, might announce more steps such as raising the limit on held-to-maturity (HTM) bonds to support government borrowings but might not come out with any further quantitative easing GSAP (Government Securities Acquisition Programme) measures.
India's services sector activity moderated further in January as new business rose at a noticeably slower rate amid the escalation of the pandemic, reintroduction of restrictions and inflationary pressures, a monthly survey said on Thursday. The seasonally adjusted India Services Business Activity Index fell to 51.5 in January, down from 55.5 in December, pointing to the slowest rate of expansion in the current six-month sequence of growth. For the sixth straight month, the services sector witnessed an expansion in output.
Banks normally park almost 27 per cent of their funds in government securitie.
'If the RBI now only prints Rs 100 in small denomination notes and the remaining amount is printed in Rs 500 and Rs 2,000 denominations, then by March-end the central bank can completely normalise the cash crunch situation.'
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.
RBI could opt for a 'deep cut' after winning inflation war, say experts.
At the World Bank Banga will be replacing David Malpass, a former Trump treasury official, reports axios.com. Malpass had already announced that he will resign by July, months ahead of his term expired. "Ajay is uniquely equipped to lead the World Bank at this critical moment in history," President Biden said in a statement. Banga, 63, currently serves as vice chairman at General Atlantic.
Consumer goods firms and auto companies are witnessing an upturn in rural demand, which had been lagging for most of FY24. Expectations of a bumper rabi crop harvest have helped turn the tide. The Reserve Bank of India's (RBI's) Monetary Policy Committee kept the repo rate unchanged last week, noting that as rural demand catches up, consumption is expected to support economic growth in 2024-25.
The Reserve Bank on Wednesday hiked key benchmark policy rate by 25 basis points to 6.5 per cent, citing sticky core inflation. This is the sixth time interest rate has been hiked by the Reserve Bank of India (RBI) since May last year, taking the total quantum of hike to 250 basis points. Announcing the bi-monthly monetary policy, RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) by a majority decided to raise the policy repo rate by 25 basis points and keep a 'strong vigil' on inflation outlook.
'The rising cost of construction, the cost of doing business, high compliance, and inflation/interest rates going up have already reduced returns to single digits.'
Rate cuts are unlikely to be aggressive, in our view.
Rajan said the process of dialogue with the government did not reach a stage where he could have agreed to stay on
IMF attributes the slower growth rate to supply-side bottlenecks.
Rajan had overturned the majority opinion of the members and chose to hold the rates at the last monetary policy review in October.
'Rate cut should reiterate RBI's commitment in providing confidence to consumers and small business.'
The bigger worry is that its effects could linger well into the next financial year.
The Reserve Bank of India (RBI) on Wednesday announced to increase the policy repo rate by 50 basis points to 4.9 per cent, the second hike in five weeks aimed at quelling the inflation. The MPC vote was unanimous and has decided to keep stance withdrawal from accommodative, RBI Governor Shaktikanta Das said in a press conference on Wednesday. The decision was taken during a three-day meeting of the RBI's Monetary Policy Committee (MPC) to review the interest rates in the country. The MPC voted unanimously to increase the policy repo rate by 50 bps to 4.90 per cent," Das said.
Costlier vegetables and eggs pushed up retail inflation to a nearly six-and-a-half year high of 7.61 per cent in October, keeping it significantly above the comfort zone of the Reserve Bank.
In twin blows to Indian economic revival, higher food prices drove retail inflation to a five-month high of 7.4 per cent while factory output fell for the first time in 18 months. The second consecutive month of rise in consumer price index (CPI)-based inflation will add to the pressure on the Reserve Bank of India (RBI) to again raise interest rates to tame high prices. Inflation has been above the targeted zone for the ninth month in a row and as per statute, the RBI will now have to explain to the government in writing why it failed to keep prices below 6 per cent.
The RBI was not party to the decision to demonetize 500 and 1,000-rupee notes, which was taken at the highest level of India's political leadership.
A staunch defender of demonetisation, it would be interesting to see how he handles the government's increasing demand for more cash from the RBI, and letting some weak banks get out of prompt corrective action.
We need a change in mindset, says the RBI Governor.
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.
A 13-member group, headed by RBI Executive Director R Gandhi, has made various recommendations on G-Sec market, retail participation and interest rate derivatives market.
The RBI may grant licences for setting up small finance and payment banks by April 2015.
The broad market depicted strength. 1,525 shares rose and 1,131 shares fell. A total of 156 shares remained unchanged
The downward surprise in Q2 stemmed from a stronger-than-anticipated drag from gross fixed capital formation and marginal weakness in private final consumption expenditure. In Q3, projection errors emanated mainly from a steep unanticipated contraction in gross fixed capital formation, which was the deepest in the new series of GDP.
'For the RBI, for a central bank, reputational risk is the worst risk.' 'Credibility is the worst risk,'
'The no-rate cut policy and preference to wait for the Budget and clarity on the fiscal front demonstrate RBI Governor Shaktikanta Das is maturing in his new role,' notes Tamal Bandyopadhyay.
Rajan's exit will neither affect the RBI's de facto independence nor its working.
Finance minister Arun Jaitley has delivered a Arun Jaitley delivered a bold, far sighted budget
Lower inflation, FCNR(B) outflows likely to influence central bank decision
Costlier vegetables slowly pushed retail inflation, which had remained well within the Reserve Bank's comfortable level of 4 per cent during most part of 2019, peaked to more than three-year high of 5.54 per cent in November.
The RBI governor-designate may be economical with spoken words, but is known for his sharp and critical writings
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