The Reserve Bank has reduced interest rate by 150 bps since January 2015.
Indian stock market benchmarks, Sensex and Nifty, saw gains in early trading, driven by anticipation surrounding the Reserve Bank of India's monetary policy decision, despite mixed global cues and significant FII outflows.
Supporting Reserve Bank's hawkish stance on monetary policy, Finance Minister Pranab Mukherjee on Tuesday said the increase in the key rates was necessary to contain inflation.
The highlights of the RBI's fourth monetary policy review of fiscal year 2022-23 announced by Governor Shaktikanta Das.
Patra, as executive director of the central bank, was the principal advisor to the Monetary Policy Department since July 2012.
Inflation to peak in the current quarter within tolerance band, moderating in the second half of next fiscal, says central bank.
Baby steps are pleasing to see, but when it comes to policy-making, one has to see where they go. Policy statements rarely provide the specific rationale for the proposed "baby steps". Economists, who see "baby steps" as "interest rate smoothening", infer a rationale for such actions in a variety of ways, as for example from the minutes of the policy meetings where they are made available.
The Indian government has introduced a 0.4% transaction fee on Unified Payments Interface (UPI) payments exceeding Rs 2,000 for merchants, effective October 15, marking the end of nearly six years of free service. Person-to-person transfers and small-value transactions below Rs 2,000 remain free. The new Merchant Discount Rate (MDR) is capped at Rs 300 for transactions above Rs 75,000, with differentiated rates for essential sectors and investments, and safeguards to prevent costs from being passed to consumers.
The Reserve Bank of India (RBI) maintained its key policy rates for the fourth consecutive time, keeping the repo rate at 5.25 per cent, while the benchmark BSE Sensex closed 152 points higher in a volatile session, recovering from an intraday dip.
The FCNR (B) stratagem relies on using public money to defend the rupee. The State subsidises foreign borrowing to attract dollars. This tool requires large-scale borrowing to make a material difference against a gross external flow of $11 billion a day. A commensurately large fiscal cost falls upon the exchequer. The ministry of finance will choose how much it is willing to spend in exchange for this round number, points out Ajay Shah.
Indian benchmark indices, Sensex and Nifty, closed higher, primarily driven by bank stocks and encouraging US inflation data, which fuelled expectations of a less aggressive Federal Reserve monetary policy. However, escalating US-Iran hostilities tempered investor sentiment, leading to some profit-taking.
After four consecutive months of withdrawals, Foreign Portfolio Investors (FPIs) injected Rs 20,200 crore into Indian equities in July, driven by attractive valuations, improving corporate earnings, and a more favourable global environment.
'The MPC is likely to prioritise the key mandate, which is inflation, while relying on other instruments to stabilise the currency and bond markets.'
From liquidity, monetary policy operations to financial inclusion, know about RBI monetary policy
Let's wait for the monetary policy on February 8 -- to see how it complements the fiscal commitments, points out Tamal Bandyopadhyay.
The RBI cut the rate several times last year to reduce it by 125 basis points to the current 6.75 percent.
The Reserve Bank of India (RBI) has kept its key lending rate, the repo rate, unchanged at 5.25 per cent for the second consecutive time, citing concerns over rising energy prices, supply disruptions from the West Asia crisis, and potential inflationary pressures.
Gold and silver are expected to remain volatile with a corrective bias as investors assess the latest flare-up in the US-Iran conflict, movements in crude oil prices, and inflation data, which could reshape expectations for global interest rates, according to analysts.
Former Reserve Bank of India governor Yaga Venugopal Reddy said he would have preferred a tighter monetary policy as managing inflation and inflationary expectations were crucial to keep the economy growing.
Retail inflation was at a 25-month low of 8.1 per cent in February.
The inflation target of the RBI would be reviewed once every five years.
The Indian government has introduced a 0.4% Merchant Discount Rate (MDR) on UPI person-to-merchant (P2M) transactions exceeding Rs 2,000, effective October 15. This move ends nearly six years of fully free UPI payments, though person-to-person (P2P) transfers and small P2M payments remain free. The charges aim to bolster investment in UPI infrastructure, with specific exemptions and caps for essential sectors.
Highlights of the RBI monetary policy.
Legendary economist and former Federal Reserve chairman Alan Greenspan has died at the age of 100 due to complications related to Parkinson's disease, his wife Andrea Mitchell confirmed.
S&P Global Ratings projects India's economic growth to slow to 6.6 per cent in FY27, down from 7.7 per cent in FY26, citing energy stress and a potential sub-par monsoon.
Reserve Bank of India Governor D Subbarao on Friday increased mandatory cash reserve of banks held by RI by 75 basis points (0.75 per cent) in a bid to suck excess liquidity to combat rising inflation.
The RBI Governor, however, added it was 'difficult to say when that will take place and in what shape it will roll out'.
The RBI on Thursday hiked key policy rates for the 10th time since March, 2010, in a bid to tame inflation, which crossed the 9 per cent mark in May.
he government in its budget for 2009-10 proposed to raise Rs 4.5 lakh crore (Rs 4.5 trillion) from the market, up from Rs 3.1 lakh crore (Rs 3.1 trillion) in the previous year and pegged the fiscal deficit at 6.8 per cent of the GDP as against 6.2 per cent in 2008-09.
The central bank was widely expected to maintain status quo.
The Indian equity market is set for an event-heavy week, with analysts pointing to the Reserve Bank of India's (RBI) interest rate decision, developments in the US-Iran situation, and crude oil prices as the primary determinants of market trends.
Indian benchmark indices, Sensex and Nifty, saw early gains driven by lower crude oil prices and buying in Reliance Industries, even as the Reserve Bank of India maintained its benchmark policy rate for the fourth consecutive meeting, reinforcing confidence in the domestic economy.
The RBI has set up a panel to review ATM charges, and fees levied by banks.
The International Monetary Fund (IMF) has said the tightening of monetary policy by India is an 'appropriate' step, as the country is faced with high inflation and needs to consolidate the fiscal measures initiated during the slowdown.
India's banking system liquidity has fallen into a deficit for the first time in nearly three months, prompting the Reserve Bank of India (RBI) to inject 1.41 trillion through a seven-day variable rate repo (VRR) auction to ease the temporary tightness.
BRICS members have expressed 'serious concerns' over the unilateral imposition of trade and finance-related measures, including higher tariffs and non-tariff barriers, stating these actions distort trade and are inconsistent with WTO rules. The grouping also highlighted elevated risks to the global economic outlook due to geopolitical tensions, trade fragmentation, and protectionism.
This is the fourth consecutive time that the RBI has kept key interest rates unchanged despite clamours from the industry to cut rates to boost economy.
The Indian rupee weakened against the US dollar due to geopolitical tensions surrounding the Strait of Hormuz and ahead of the Reserve Bank of India's monetary policy review.
Indian benchmark indices Sensex and Nifty closed marginally lower due to profit-taking, following the Reserve Bank of India's decision to keep the repo rate unchanged while lowering its growth expectations for the current fiscal year and forecasting higher inflation.
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