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.
Raghuram Rajan, who has been pilloried by his critics for keeping interest rates high and has also been accused of stifling growth.
The RBI, which has been keeping rates at an elevated level citing the high inflation, wants to bring it down to 6 per cent by January 2016.
An immediate RBI rate cut will lower lending rates for banks' MSME/retail/mortgage loans before the 'busy' industrial season ends in March.
The RBI has targeted 6 percent inflation by January 2016
Rs 5,000 crore additional liquidity facility to be provided by the National Housing Bank to boost liquidity in housing sector, the RBI said.
Mahindra & Mahindra was the top laggard in the Sensex pack, sliding 2.05 per cent, followed by Bajaj Finance, Tata Steel, SBI, Asian Paints, Kotak Mahindra Bank and Titan. However, IT majors HCL Technologies and TCS defied the trend and gained 1.02 per cent and 0.47 per cent, respectively. FMCG firm Hindustan Unilever rose 0.32 per cent.
Rajan added "many" market participants were convinced that India could hit the RBI's target of bringing down consumer inflation to 6 percent by January 2016.
Everyone is worried about inflation making their money worth less or even worthless.
Probably 35 bps. There could be even an encore in February 2023 to take the policy rate to 6.5% before the financial year ends, predicts Tamal Bandyopadhyay.
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Improved investor sentiment is expected to drive the economy forward in the coming quarters.
Prices may go up because of higher energy costs, caused by the rise in shipping charges, with commercial vessels taking a longer route to avoid the troubled Red Sea region, the finance ministry said on Monday. Iran-backed Houthi rebels of Yemen are repeatedly attacking ships in the Red Sea. While the global economy is grappling with challenges such as sticky inflation, sluggish growth, and mounting fiscal pressure, India's external sector could face "potential risks" due to the ongoing geopolitical tensions, according to the finance ministry's report on the review of the Indian economy.
Titan surged 2.98 per cent, followed by IndusInd Bank, ITC, JSW Steel, Infosys, Tech Mahindra, Tata Consultancy Services and Maruti. Hindustan Unilever, Asian Paints, Bharti Airtel and HDFC Bank were among the laggards.
The Reserve Bank of India's (RBI's) decision to withdraw the incremental cash reserve ratio (I-CRR) is expected to benefit banks during the festival season. They are likely to increase deposit rates by up to 25 basis points (bps) in select maturity buckets. The rise in demand for funds to cover tax payments and meet quarter-end business targets could influence rate decisions by banks, according to bankers and money market executives.
Achieving inflation target of 4 per cent, recovery after remonetisation and hardening profile of oil prices are some of the risks which the RBI is watching closely, says Gaurav Kapur.
On seeing them, Gandhi got off his vehicle, walked up to them and shook hands with several people in the crowd.
After dipping by as much as 17 per cent in April, readymade garment (RMG) exports of all textile categories in India are showing signs of recovery in May. Exporters in Tiruppur are indicating a rise in rupee terms during the month, while it may take at least a month for volumes to be back in positive terrain. Among the global majors that are placing orders in the textile hub include Walmart, H&M (Hennes & Mauritz AB), Tommy Hilfiger and Target.
RBI is expected to cut policy rates by 50 basis points by 2016.
The RBI expects inflation in 2015 to hover around 6 per cent -- its target for January 2016 -- and sees risks to the target evenly balanced.
'Will Imran compromise with the army? We are all human beings. We all compromise.'
'We will see a lot of investments from the private sector.' 'As long as we are not impacted by some global events, I think we will be in a strong place.'
'A weak monsoon always spells disaster. But it's too early to have a pessimistic view.'
Domestic stock markets would be driven by inflation numbers, global trends, and the last batch of Q4 earnings this week, analysts said. Markets will also react to industrial production data and consumer inflation numbers that were released after market hours on Friday. "Participants will react to macroeconomic data viz. IIP and CPI first, which were released post-market hours on Friday.
Will the 6 per cent inflation target be met?
RBI seen cutting repo rate 25 bps on Sept 29, says a poll
Analysts are expecting inflation to fall further in October and November on base effect. Inflation measured by consumer prices has been trending down for over four months, and came in at 6.7 per cent in September.
'To the believers of crypto regulations, I have only one question to ask, how will you regulate it?'
Government and the Planning Commission had earlier projected a growth rate of 9 per cent during 2011-12, up from 8.6 per cent in the previous fiscal.
As inflation rate is near the upper limit of the comfort zone, experts rule out rate cuts anytime soon
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Narrowing of the current account deficit will help arrest depreciation of the rupee and ease inflation concerns, industry groups said.
'It is India's first vehicle that can be driven on road, marshy terrain and in water as well.'
'The BJP is using administrative machinery to fight elections'
Inflation may come down to RBIs projections, if it does not we will have to take steps, RBI deputy governor K C Chakrabarty said on the sidelines of an event organised by Confederation of Indian Industry and Suresh Neotia Centre of Excellence.
Food prices probably fueled a sharp rise in India's retail inflation in December after the record low struck the previous month.
Following are the highlights of the Economic Survey 2022-23 tabled in Parliament on Tuesday
RBI Governor Raghuram Rajan, who today surprised markets with a rate hike, defended the move saying a rate cut would not have impacted either banks or borrowers and that bringing down retail prices is the key to sustainable growth.
CPI inflation is on the decline since July.
Bankers have been criticised for not passing the benefits of rate cuts
The repo rate, at which the central bank lends to the system, will come down to 5.75 per cent after the cut.
Brokerage firm Nomura said inflation levels in India are close to post global financial crisis lows, and also retained its positive stance on Sensex.
