The RBI Governor brought down retail inflation to 3.8% in July.
The reform priorities are clear: enhance savings, improve productivity. Just 25 basis points of moving interest rate up or down would not boost investment: Former RBI Governor Y V Reddy.
It is time for the three finance ministers of the 1990s to reveal the real hero, says T C A Srinavasa-Raghavan.
The Reserve Bank remains laser-focused to bring back retail inflation to 4 per cent over a period of time in a non-disruptive manner, Governor Shaktikanta Das stressed while voting for status quo in interest rates, as per minutes of the October policy meeting released on Friday. The central bank has been mandated by the government to ensure the Consumer Price Index (CPI) based inflation is at 4 per cent, with a band of 2 per cent on either side. The retail inflation, which was above 6 per cent during May and June, has started moving down and stood at 4.35 per cent in September.
According to Soumya Kanti Ghosh, chief economic advisor of the State Bank of India group, a 50 bps rate cut is a possibility, but 25 bps is more likely.
The economy is gaining traction with gradual pick up in manufacturing activity and moderation in contraction of services, spurred by comfortable liquidity conditions, an RBI article on Tuesday said. Observing that the retreat of the second wave of coronavirus pandemic has been slow, the RBI in an article on the 'State of Economy' said, the aggregate demand conditions are buoyed by the release of pent-up demand post unlock, while the supply situation is improving with the monsoon catching up to its normal levels and sowing activity gaining pace. "Reaffirming the traction that the economy is gaining, the manufacturing activity is gradually turning around, while contraction in services has moderated.
Financials were among the top losers along with Sun Pharma and index heavyweight Reliance Industries
While efforts are being mounted on a war footing to arrest its spread, COVID-19 will impact economic activity in India directly through domestic lockdown. The second-round effects, it said, would operate through a severe slowdown in global trade and growth.
This is the first time in the RBI's history that a governor is leaving without willing to renew his contract
'If rate cuts happen, bond yields will come down and investors will make mark-to-market capital gains on them.'
Banks might hold on to lending rates for the time being.
Inflation targeting has worked well and the government must stay with it, and the framework is going to work well in the period ahead also, former RBI Governor D Subbarao said on Thursday. He also said low inflation contributes to sustainable growth. Addressing the 'Times Network India Economic Conclave' virtually, Subbarao said the government's proposal to privatise some public sector units is not akin to selling family silver but it is a route for putting India on a sustainable growth path.
Here are the key decisions announced by the Reserve Bank of India on Thursday.
The report, however, said it remains watchful of the upside risks to inflation emanating from pass-through of minimum support prices (MSPs), adverse movement in crude oil prices, volatility in global financial markets, lagged impact of the rupee weakness on input prices, adverse implications from fiscal slippage and staggered impact of HRA increases by states and its second-round impact.
It's crucial for Modi to make India an easier place to do business.
RBI recently cut repo by 0.25 percentage point, taking the rate to 7.25 per cent in three reductions since January.
Finance Commission has got new team who are committed to growth initiatives.
RBI Governor Raghuram Rajan is regarded as credible by global financiers.
Since last month, the realty (down 23%), auto (down 16%) and finance (down 14%) indices have underperformed the market by falling over 13%, as against 8% decline in the benchmark indices
'Trust your new governor,' Omkar Goswami advises RBI Deputy Governor Viral Acharya. 'Just because he is from the IAS and doesn't carry a PhD from a US university does not make him unsuitable for the task.' 'If anything, Das will pour oil on troubled waters, and save the RBI's reputation.'
Thanks to the recapitalisation by the government and measures taken by the central bank, collapse of any large housing finance company won't pose as big a risk as it had six months ago.
'They can transition from short to long-duration funds when the yield curve normalises.'
Banks might not have realised the exact implication of risky projects under PPP projects, which were getting implemented under high leverage
Probably in August. We can argue whether RBI is dovishly neutral or neutrally dovish but the telltale signs of at least one more rate cut are strewn all over the policy statement, points out Tamal Bandyopadhyay.
Finance minister Nirmala Sitharaman on Wednesday exuded confidence that inflation would further decline and the government is on track to meet its budgetary target for deficit and said that there is no fear of stagflation in India. Replying to the debate on first batch of Supplementary Demands for Grants 2022-23 in Lok Sabha, the finance minister said inflation has come down and it is now in the tolerable band of the RBI. Inflation has been declining since April 2022 and it is declining further, she said.
The regulator said that it is vested within its purview to regulate the bank account for payment systems and the settlement systems are finally posted in the books of account of banks with the RBI to attain settlement finality.
The public sector banks are not in a position to cut rates because of their weak balance sheets and massive portfolios of non-performing assets, says Devangshu Datta.
he reason behind the cut in policy rate seems to be a slowing economy
The central bank can directly print money and finance the government, but it should avoid doing so unless there is absolutely no alternative, former RBI governor D Subbarao on Wednesday said while pointing out that India is 'nowhere' near such a scenario. In an interview with PTI, Subbarao suggested that to deal with the second wave of COVID-19 induced slowdown in the economy, the government can consider Covid bonds as an option to raise borrowing, not in addition to budgeted borrowing, but as a part of that.
Experts have started giving comments on provisions that the govt must make in Budget 2016-17.
However, it may still not change its stance on the policy rate as inflationary pressures are coming from high commodity prices.
The S&P BSE Sensex shed 119 points to close at 27,977 and the Nifty50 dropped 45 points to finish at 8,591.
He will be the first bureaucrat to head the central bank in almost five years.
RBI will take a cue from the Fed policy statement.
Will Arundhati Bhattacharya be the RBI's first woman governor? Or will Urjit Patel succeed Raghuram Rajanas RBI governor when his term ends on September 4?
Seeking to dispel possible notions of the RBI not having done enough by opting for a pause for the second consecutive time, Das said the RBI has a wide dashboard of instruments beyond rates that can be deployed.
During the month, inflation in vegetables shot up to 35.99 per cent, as against 26.10 per cent in October. Likewise, the prices of cereals and eggs grew at a faster pace of 3.71 per cent.
The Reserve Bank of India has set up an experts committee to implement Basel II accord by 2006 to strengthen the financial health of banks by adopting globally accepted norms for capital adequacy.
He has had a productive first year at the RBI -- one which saw, also, India's economic imbalances improve and the unexpectedly strong general election outcome.
With a sole mandate of inflation targeting, RBI wears many hats.
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