Even if the Reserve Bank of India's Monetary Policy Committee decided to hold interest rates in the October meeting, it acknowledged the scope for further rate cuts while waiting for the impact of the past steps to play out.
Uncertainties over the impact of the United States' (US') tariffs on India, along with the ongoing transmission of past rate cuts, prompted the members of the Reserve Bank of India's Monetary Policy Committee (MPC) to maintain the status quo during the August meeting, the minutes showed. While some of the external members highlighted their concern over growth, the internal members cited the one-year headline inflation rate overshooting the 4 per cent target.
'The statistical confidence bands of the fan charts of the forecasts will provide a better sense of the potential variability of outcomes.'
'The US reciprocal tariff has added another element of uncertainty and the central bank may prefer to wait and get further clarity.'
The government on Tuesday appointed three external members -- Ram Singh, Saugata Bhattacharya and Nagesh Kumar -- to the RBI's rate-setting Monetary Policy Committee for four years. The central government has reconstituted the Monetary Policy Committee (MPC) of RBI, the finance ministry said in a statement. Ram Singh is the director of the Delhi School of Economics, Saugata Bhattacharya is an economist, and Nagesh Kumar is the director and Chief Executive, Institute for Studies in Industrial Development, New Delhi.
The alleged gang rape of a second-year medical student in West Bengal's Durgapur has sparked massive outrage, snowballing into a major political storm, with the survivor's father likening Bengal to 'Aurangzeb's rule' and Governor C V Ananda Bose calling for a 'second renaissance' to make the state safer for women.
The Reserve Bank of India's (RBI) Monetary Policy Committee's (MPC) decision to cut the repo rate by 50 basis points (bps) to 5.5% was contrary to the expectations of many economists. Firstly, most of the economists expected the MPC to cut the repo rate by 25 bps citing the weakening of inflation, prospects of economic growth, geopolitical uncertainty and comfortable system liquidity.
The Reserve Bank of India on Friday decided to keep the policy rate unchanged for the 11th time in a row but sharply lowered the GDP growth forecast to 6.6 per cent for the current fiscal, as against earlier projection of 7.2 per cent. The Reserve Bank of India (RBI) maintained the status quo on interest rate despite July-September quarter GDP growth falling to 7-quarter low of 5.4 per cent, as against its own projection of 7 per cent.
Dr Nagesh Kumar, one of the three new MPC members, wanted the MPC to reduce the repo rate by 25 basis points to 6.25%.
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.
'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 three day MPC meeting began on Monday and the decision will be announced on Wednesday by RBI Governor Shaktikanta Das.
The Reserve Bank is unlikely to cut the benchmark interest rate in its forthcoming bi-monthly monetary policy review later in the week as retail inflation is still a cause of concern, and there is a possibility of the Middle East crisis deteriorating further, impacting crude oil and commodity prices, say experts.
The Reserve Bank may go for a final 25 basis points increase in the current rate hike cycle next week and a reduction would come in only by the end of third quarter of FY24, economists at Axis Bank said on Wednesday. As per media reports, RBI officials met economists on Tuesday, and the latter have suggested the central bank to go for a 25 basis points hike in key rates. Since May 2022, the RBI has hiked rates by 250 basis points, hurting borrowers and some are already concerned about loan tenors extending beyond their working lives as a result of the hikes.
The duty cuts and export restrictions imposed by the government to control inflation may only have a marginal impact, economists have said. The long-term solution, they say, is to boost agricultural production to enable the sector to ride out of the current slump.
The roadshow in Dum Dum Lok Sabha constituency was held in support of the TMC's veteran leader and candidate Saugata Roy, who is seeking a fourth consecutive term from the seat.
Seven TMC MLAs within the Krishnanagar Lok Sabha constituency of party MP Mahua Moitra have written to Trinamool Congress supremo Mamata Banerjee demanding her removal as Nadia Uttar organisational district president. The lawmakers allege that Moitra has been ignoring Assembly representatives while undertaking party programmes and indulging anti-social elements, causing significant damage to the party's image. The MP has responded by dismissing the complaint as "district-level rubbish."
Heightened geopolitical uncertainties will lead the Reserve Bank's rate-setting panel to opt for a status quo at the next week's meeting, Axis Bank's chief economist Saugata Bhattacharya said on Monday. Bhattacharya said he had earlier expected a tightening action at the policy meet scheduled for April 6-8 but the increased uncertainties on the geopolitical front due to the Russian invasion of Ukraine and its impact on commodity prices makes him now think that RBI will defer such an action. He said the central bank's Monetary Policy Committee (MPC) may hike rates in the second half of FY23 by up to 0.50 per cent.
An angry Banerjee slammed a minister, a former Trinamool Congress mayor and a few bureaucrats for their "below-par performance".
It then went on to ask whether a lion could be named after Swami Vivekananda or Ramakrishna Paramahansa.
The RBI is understood to be dithering since it would want more clarity on the cost of the fiscal policies the new government would undertake before it decides to cut rates, even though it has pencilled in a lower gross domestic product growth rate for this fiscal year.
High frequency indicators suggest that a growth recovery is underway, but very tentatively and with weak legs, says Saugata Bhattacharya.
The Trinamool Congress's candidate selection for the upcoming Lok Sabha polls is expected to prioritise the nominee's winnability, public image and sitting MPs' performance, while also reflecting the internal debate on whether experienced leaders should make way for the younger generation.
Price rise in services sector after the goods and services tax (GST) gets implemented and the pay hike of central government employees will make inflation control a tough job for the central bank
As FY20 Budget fiscal measures need to be better understood, a reversal of the stance back to neutral will allow MPC flexibility to respond to incoming data.
Growth impulses, while improving, remain fragile, and a rate hike will be disruptive to interest costs.
High inflation print is the price that the Reserve Bank of India (RBI) will have to pay to nurse a fragile growth back, say economists. Wholesale Price Index-based inflation rose to a record high of 12.94 per cent in May, aided by low base effect, but also because of higher fuel and commodity prices. Retail inflation, too, surprised by rising to 6.30 per cent, while the core inflation, which is the non-food and non-fuel component, rose to an 83-month high of 6.55 per cent. These numbers are much above RBI's upper limit of 6 per cent inflation target, but there is very little that the RBI can do at this moment.
He noted that the Rupee has firmed recently but cautioned that the currency should not lose its competitiveness in global trade.
Government has forecast annual economic growth to rise to 7.4%.
The Reserve Bank of India (RBI) is precariously balancing two opposing objectives - maintaining easy financial condition in the domestic market, while ensuring external stability - and economists have started taking note. They say India is going through the classic trilemma of the 'Impossible Trinity'. The RBI cannot have an independent monetary policy (setting domestic interest rates) in an environment of an open capital account and flexible exchange rates. What is even more complicated for the central bank now is that financial market stability overlays all the other three objectives.
Prime Minister's key economic advisor C Rangarajan on Friday lowered the growth forecast for the current fiscal to 5.3 per cent from 6.4 per cent projected earlier and listed out host of measures including further liberalisation of foreign direct investment norms to improve economic condition.
There is a near consensus that at least a 25 basis points cut, if not 50, can be expected in the June policy.
On the rupee, it expects some appreciation pressure on in the near term from greater portfolio flows.
However, RBI would continue to nudge banks to cut lending rates
West Bengal Chief Minister Buddhadeb Bhattacharya said on Thursday that he would continue to appeal to Trinamool Congress chief Mamta Banerjee to give up her indefinite fast on the Singur issue.
A strong currency helps in fighting some of the import-led inflation.
The central government's deposits with the RBI had fallen to just Rs 100 crore as of June 8.
'The current economic contraction is certainly due to the lockdowns as a response to the pandemic, which is an act of God.' 'Nobody has seen such a thing in the last 100 years.' 'Saying that this was an act of mismanagement is largely incorrect'
The Modi government has handled inflation far better than any government in the past two decades. Both the stock market and currency indices have begun to show confidence in the economy, despite the mounting global headwinds of trade.
While Raghuram Rajan has said in the past that other factors, including domestic fundamentals, outweigh the US Fed policy meet, this time it would be different
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