Inflation declined to below four per cent for the first time in more than 15 months to touch 3.94 per cent for the week ended August 18, much less than the Reserve Bank's projection for this fiscal.
Slowing inflation prompted the RBI to cut the policy repurchase rate last month by 25 basis points to 6.50 percent, the lowest since 2011.
In the new decade, the scene will change because the banks till recently had been challenged by the fintechs, but the techfins have now entered the arena, observes Tamal Bandyopadhyay.
Shaktikanta Das is a master of the finest balancing act who listens to all but takes his own decisions, discovers Tamal Bandyopadhyay.
Finance Minister P Chidambaram again targeted the cement manufacturers and steel producers saying they were acting like a cartel and warned that the government was looking at legal and administrative measures to deal with them to contain runaway inflation.
Raghuram Rajan said a six-member monetary policy committee will decide on interest rates.
Aiming to push India into the list of the top 10 agri export nations, the policy has been backed by the Prime Minister's Office
The members of the Reserve Bank of India's (RBI's) Monetary Policy Committee (MPC) voiced different views on the interest rate and stance, with two of them indicating they may not vote for further rate increases even if Governor Shaktikanta Das and Deputy Governor Michael Patra maintain bringing down inflation as their primary objective, the minutes of the December review of the monetary policy showed. The other two members remained neutral. The MPC increased the policy repo rate by 35 basis points (bps) - which was lower than the previous three hikes of 50 bps. The repo rate has been hiked by 225 bps to 6.25 per cent since May this year.
'I'm pitching India for the strengths we offer, including the English language, engineers, doctors, nurses, professionals, innovative talent of startups.'
This development can strengthen the case for interest rate cut by the RBI.
Shifting its stance of monetary policy towards targeting retail inflation as it is an "inequitable tax", RBI today said it may exceed 8 per cent by March end and efforts will continue to bring it down.
The International Monetary Fund (IMF) on Tuesday lowered India's economic growth projection for the current fiscal to 5.9 per cent from 6.1 per cent earlier. Yet India will continue to be the fastest-growing economy in the world. In its annual World Economic Outlook, IMF also lowered the forecast for 2024-25 fiscal (April 2024 to March 2025) to 6.3 per cent from the 6.8 per cent it had predicted in January this year. The growth rate of 5.9 per cent in the 2023-24 fiscal compares to an estimated 6.8 per cent in the previous year.
Governor Urjit Patel and his deputies spoke to the media about the central bank's decision to raise the repo rate.
BSE market breadth is neutral. Out of 2,763 stocks traded, 1,340 shares have advanced while 1,307 shares have declined.
The inflation target of the RBI would be reviewed once every five years.
Zero inflation will pave way for rate cuts in the next RBI policy.
The stock markets, which had opened in the green on rate cut hopes, tumbled after the monetary policy announcement.
Yadav told the media that he was saddened by efforts to stop them from entering the centre by deploying the police.
Fall in both WPI and CPI inflation to pressure RBI, say analysts
The Monetary policy committe comprising 6 members voted 6-0 in the favour of the rate cut.
According to D&B, food price levels might witness a rebound as foodgrain production is estimated to have declined during 2014-15.
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The minister also promised more policy decisions in the coming days saying 'reforms is a work in progress'.
'I see in the BJP an attempt to get growth and redistribution of resources.' 'For growth you need growth of the economy.'
'The market should maintain optimism on the back of range-bound oil prices, a robust fiscal balance sheet, a better-than-expected monsoon, and moderating inflation.'
If India can fast utilise currency flows for long-term projects, the regulatory regime could be more liberal.
The Reserve Bank of India (RBI) on Wednesday raised the benchmark lending rate by 35 basis points to 6.25 per cent in a bid to tame inflation, which has remained above its tolerance level for the past 11 months. With the latest hike, the repo rate or the short-term lending rate at which banks borrow from the central bank now has crossed 6 per cent. This is the fifth consecutive rate hike after a 40 basis points increase in May and 50 basis points hike each in June, August and September.
Fitch on Tuesday affirmed India's sovereign rating at 'BBB-' with a stable outlook, on robust growth and resilient external finances, but said weak public finances remain a challenge. India's rating has been unchanged at 'BBB-', which is the lowest investment grade, since August 2006. "Fitch Ratings has affirmed India's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BBB-' with a Stable Outlook," it said in a statement, adding strong growth potential is a key supporting factor for the sovereign rating.
Finance Minister Nirmala Sitharaman on Wednesday said the country's economic growth remains a priority for the government, as inflation has come down to a manageable level. Job creation and equitable distribution of wealth remain the other focus areas, she said at India Ideas Summit. "Some of course are red-lettered (priorities), some may not be. Red-lettered ones would of course be jobs, equitable wealth distribution and making sure India is moving on the path of growth.
India's trade account could come under pressure and there could be an inflation push if crude oil prices remain above the $90 per barrel (Brent) for a prolonged period since India imports over 85 per cent of its oil and roughly 50 per cent of its gas. A rebound in economic activity is bound to lead to higher fuel demand. While India is the third-largest importer of crude, it is a net exporter of refined products, which helps to compensate to some degree.
Dismissing the contention that the decline in inflation was on account of the steps taken by the NDA government, Chidambaram said he wanted to know, 'what measures were taken by the government that contributed to decline in inflation rates.'
Highlights of the RBI monetary policy.
rediffGURU Dev Ashish answers your personal finance and mutual fund queries.
'If you post on social media on an issue like power cuts in Tral, the police will come to your home and tell you to remove your social media post.' 'If you don't, then the local police threaten you that they will book you under PSA.' 'This is happening all the time in Kashmir.'
'Some risks to this market rally include inflation, erratic weather conditions, rising crude prices, slowing global growth and the resultant impact on domestic exports, escalation in geopolitical tensions.'
rediffGURU Dev Ashish answers your personal finance and mutual fund queries.
With the setting of MPC, the interest rate setting powers would move from RBI Governor to the panel.
Besides high portfolio yield, investors may enjoy capital gains in debt funds in 2023 as bonds rally in anticipation of rate cuts.
