All members of the Monetary Policy Committee (MPC) -- Shashanka Bhide, Ashima Goyal, Jayanth R Varma, Mridul K Saggar, Michael Debabrata Patra and Shaktikanta Das -- had unanimously voted to keep the policy repo rate unchanged at 4 per cent after the three-day meet of the panel earlier this month. Further, except Varma, other members voted to continue with the accommodative stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward. Varma expressed reservations on this part of the MPC resolution, according to the minutes.
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.
Volkswagen Passenger Cars is targeting a volume sales growth of about 15 per cent in the country in 2024, even as it expects the Indian passenger vehicle (PV) industry to grow by 5-7 per cent in the current year, its India brand director, Ashish Gupta, said on Thursday. This means the company is expecting to grow 2-3 times faster than the Indian PV industry in 2024. But globally, the German automaker is expecting just 3 per cent rise in sales this year, down from 12 per cent last year.
Govt likely to get full control on policy rate.
'The Indian government is better prepared this time and has reached out to all contenders and not putting all eggs in one basket.'
Average policy rate over the next three years should be around 7.4%
The country saw two straight years of deficient monsoons.
The Budget should use the extra RBI surplus to better effect, suggests A K Bhattacharya.
The Consumer Price Index-based inflation rose to 5.11% in January
To cut interest rates, the central bank head has to open up a debate on inflation target revision.
After raising interest rate by a cumulative 250 basis points in 11 months, the Reserve Bank of India (RBI) on Thursday unexpectedly kept benchmark rate unchanged as global banking woes added uncertainty to the economic outlook. Five out of six members of MPC voted to remain focused on the withdrawal of accommodation to ensure inflation aligns with target while focusing on growth, RBI Governor Shaktikanta Das said on Thursday. The Monetary Policy Committee of the central bank decided to take a pause after a rate hike seen in previous six consecutive policies.
The government seemed unhappy with Raghuram Rajan's interest rate policy.
Bangladesh is in turmoil, which is not good news for India, which shares a porous 4000 km border with it. There is a danger of fundamentalism growing there, and India has to move in to reset its ties with the new dispensation before China and Pakistan make capital out of it, alerts Ramesh Menon.
The inflation numbers are still within the five per cent annual target of the Reserve Bank, which is due to review the monetary policy on July 31.
Among the Sensex firms, Tech Mahindra, HCL Technologies, Wipro, Infosys, Bajaj Finance, Tata Consultancy Services, Bajaj Finserv and ICICI Bank were the major gainers. Power Grid, Nestle, Asian Paints and Hindustan Unilever were among the laggards.
These sweeping financial sanctions follow the action earlier this week to cut off Russia's frozen funds in the United States to make debt payments.
It further pointed out that the twin balance sheet problem -- at the end of banks and corporate -- more attractive interest rates for borrowers in the bond market and from non-banking financial institutions are other reasons for slow bank credit growth.
The Reserve Bank will go for a "dovish pause" at Wednesday's policy review announcement amid developments such as a rise in inflation, government maintaining the inflation target band and a likely impact on growth due to local lockdowns on rising COVID-19 infections, analysts said on Monday. Economists at American brokerage Bofa Securities said price stability, growth and financial stability will become the prime focus areas for the central bank going forward. "The RBI MPC (Monetary Policy Committee) should deliver another dovish pause on Wednesday," it said. The policy announcement, the first for the fiscal, will come days after the government maintained the RBI's target to ensure inflation to be within 2-6 per cent band for five more years.
From the Sensex pack, Larsen & Toubro, JSW Steel, IndusInd Bank, Power Grid, ITC, Mahindra & Mahindra, NTPC, HDFC Bank, ITC, Reliance Industries and Tata Motors were among the major laggards. Bajaj Finserv, Asian Paints Bajaj Finance, Bharti Airtel and Axis Bank were among the gainers.
The International Monetary Fund (IMF) warned on Tuesday that India's general government debt (comprising both central and state government debt) could exceed 100 per cent of gross domestic product (GDP) in the medium term. It also cautioned that long-term debt sustainability risks are high due to the significant investment required to meet India's climate change mitigation targets. The Indian government, however, disagreed, arguing that risks from sovereign debt are extremely limited as it is predominantly denominated in domestic currency.
Looking under the hood, I see India on the terrible, but commonplace, road to prosperity failure, warns Rathin Roy.
Inflation stood at 5.48 per cent in the previous week and 4.56 per cent in the corresponding period of the previous year.
Growth in China's consumer inflation slowed than market expectation to 1.6 per cent in September, the lowest since January 2010, according to the official data released on Wednesday.
It has mostly been a one-way street for markets that have moved up sharply since July. The front-line indices - the S&P BSE Sensex and the Nifty50 - have gained 6.7 per cent and 7.3 per cent, respectively, in the past three months. The rally in mid- and small-caps has been sharper, with both indices surging 14 per cent and 9 per cent, respectively, during this period. This sharp run has made analysts at Jefferies cautious.
The RBI cut the rate several times last year to reduce it by 125 basis points to the current 6.75 percent.
Rajan retained the short-term lending rate at 6.5 and the cash reserve requirement of banks at 4 per cent.
The ministry sought to allay the rating agency's concerns and said economic growth was on an upward swing.
RBI Governor Raghuram Rajan is expected to express that cautiousness as he looks to manage expectations.
Infrastructure and inflation targeting are expected to be top priorities for the new Reserve Bank of India governor, says A V Rajwade.
Markets gave up most of the gains made in previous session as traders' dumped frontline IT shares after Infosys reported 17% jump in net profit y-o-y, trailing street expectations.
RBI watchers are going to be on tenterhooks for the next 3 weeks.
Most brokerages are betting that the new government will shift to a policy focussing on boosting rural incomes and consumption since that has clearly been a pain point.
The AAP will contest all the 90 assembly seats in Haryana on its own, but the Lok Sabha polls will be fought as part of the INDIA bloc, Kejriwal said.
Investors should view the increase in the LTCG tax rate in conjunction with the increase in capital gains exemption from Rs 1 lakh to Rs 1.25 lakh, which will provide some relief.
Inflation trajectory does not match the slump in demand, prolonged pause on rates likely.
For August, CRISIL core inflation indicator stood at 3.6 per cent, a tad higher than RBI's measure.
The RBI is expected to build reserves so the source of primary liquidity creation is backed by forex reserves.
Gold is an excellent asset class for diversification and should be included in all long-term portfolios.
'They can transition from short to long-duration funds when the yield curve normalises.'
So far, inflation outcomes have closely tracked these projections.
