With the inflation rate almost halving from the peak levels in August and economic growth slackening, Planning Commission Deputy Chairman Montek Singh Ahluwalia today said there is further scope for the Reserve Bank of India to cut lending rates.
The government has already crossed the fiscal deficit at 132 per cent of the estimate as of December end.
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The truth is the government and the Reserve Bank enjoy a free, frank and cordial relationship.
Tata Steel was the top gainer in the Sensex pack, rising around 4 per cent, followed by Infosys, Bajaj Finance, TCS, HCL Tech, ICICI Bank and Tech Mahindra. On the other hand, Bharti Airtel, M&M, L&T and Axis Bank were among the laggards.
RBI raised lending rates to commercial banks 2 per cent to 10.25 per cent making loans costlier.
'Data-dependence means you can raise or drop rates. The present stance is only for raising rates.'
The Reserve Bank of India on Tuesday kept key rates unchanged.
A committee headed by Patel recommended retail inflation targeting and a monetary policy committee.
Patra, as executive director of the central bank, was the principal advisor to the Monetary Policy Department since July 2012.
The RBI Governor says he does not have a specific foreign exchange rate target, which raises concerns that the central bank is unlikely to defend any particular level strongly.
The IPO scam came to light in 2005 when the private 'Yes Bank' launched its initial public offer, which saw one Roopalben Panchal of Ahmedabad opening multiple fake demat accounts.
The repo rate has been left unchanged at 4 per cent, Governor Shaktikanta Das said while announcing the decisions taken by the central bank's MPC.
If the policy is extended to NBFCs and co-operative banks, they will have to disclose divergence in asset classification and provisioning during RBI inspections in their audited financial reports. Till now, these entities have been exempted from this. At present, there are more than 98,000 co-operative banks and 10,000 NBFCs. Sources said the RBI would concentrate on the top 50 co-operative banks and NBFCs.
There is so much liquidity in the system, in the global economy, and that's why the stock market is very buoyant. It will certainly witness correction in the future: RBI's Das.
The central bank is conducting a series of these meetings with individual banks as it prepares to announce the annual monetary and credit policy for the financial year 2011-12 on May 3.
The Indian economy continues to sustain the momentum achieved in the first half of 2023-24 and expectations of a fresh round of capex by the corporate sector is likely to fuel the next leg of growth, the Reserve Bank Bulletin said on Tuesday. "The likelihood of the global economy exhibiting stronger than expected growth in 2024 has brightened in recent months, with risks broadly balanced," said an article on 'State of the Economy' published in the bulletin.
The IMF expressed its opposition to any move that compromises the independence of central banks anywhere in the world.
There is little scope for significant monetary easing even in the next fiscal year.
In his first comments after resigning as RBI governor on December 10 last year amid sharp differences with the government, Patel said banks indulged in over-lending, while the government did not "fully play" its role, and also conceded that the regulator should have acted earlier.
Reserve Bank of India on Friday said the inflation for the 2004-05 will be lower than estimated 6.5 per cent and the economic growth will be higher than projected 6-6.5 per cent.
Pressure has been mounting on the Reserve Bank of India to cut interest rates in the wake of declining retail inflation and the need to fuel growth momentum. However, the RBI will have to do a tightrope walk as globally interest rates are inching upwards.
In its Third Quarter Review of Monetary Policy 2012-13, the Reserve Bank of India has reduced the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 8.0 per cent to 7.75 per cent with immediate effect.
RBI said the continuing sluggishness of the global economy led to some moderation in exports growth and invisible receipts, while import growth accelerated due to the strong domestic recovery.
With budgetary preparations on in full swing, the Reserve Bank of India on Friday advised the Finance Minister to at least partially roll back the stimulus that was provided to help the industry cope with the financial crisis.
The Centre's fiscal consolidation resolve led to the cut in banks' mandatory SLR for the second time in a row, RBI Governor Raghuram Rajan said on Tuesday, hinting at more such liquidity enhancing steps in tandem with the government's action on fiscal deficit.
Amid a debate on the basis of a monetary policy stance, one may be curious enough to know how non-food retail inflation has behaved over the years in India. Let the eager souls catch a glimpse of facts. In the past 10 years, non-food inflation came down below 4 per cent on two occasions - pre-Covid period of 2019-20 and now in the first four months of the current financial year (FY25).
The Reserve Bank of India (RBI) on Friday kept key repo rate unchanged at 4 per cent in view of rising inflation and faint signs of economic growth amid gradual lifting of coronavirus (COVID-19) lockdown. The central bank's newly-constituted monetary policy committee (MPC) began its three-day meeting on October 7 and maintained the stance as accommodative. It also kept the reverse repo rate unchanged at 3.35 per cent.
The finance ministry and the Reserve Bank are keeping a close watch on price movements in a bid to ensure that inflation remains moderate amid volatile global oil prices.
Rajan had cautioned against any deviation from the fiscal discipline path.
After all, India is the only one among the BRIC nations (Brazil, Russia, India and China) where lending rates are still ruling at their 2008 peaks.
Ahead of the much-talked about stimulus package to be announced this weekend, RBI governor D Subbarao said on Thursday the central bank will ensure continuous flow of credit to all productive sectors. Noting that a period of painful adjustment is inevitable, he said, "We hope that all the economic agents will plan their business activities on the basis of this assurance (comfortable liquidity flow will be maintained)."
Earlier, while announcing the Budget, finance minister Pranab Mukherjee projected the government borrowing in 2009-10 at Rs 4.5 lakh crore. "The RBI will ensure that the needs of the productive credit will be met. . . we are reviewing the situation and will use available instruments to conduct the borrowing programme in a non-disruptive manner," RBI deputy governor Shymala Gopinath told reporters in Mumbai.
The central bank also asserted that the country is ready for the tapering of the US Federal Reserve's bond purchases.
The RBI has also increased the saving bank rate by 50 basis points to 4 per cent to give higher returns to depositors in the wake of high inflation.
The gap between credit and deposit growth in the banking system is expected to decline sharply to 80 basis points (bps) in the next financial year from an average of 386 bps over the FY22-Q3FY25 period, according to rating agency India Ratings. This would be against the backdrop of sharp moderation in the incremental loan deposit ratio (LDR) of the Indian banking system to 85 per cent in February 2025 from 117-118 per cent in the same month of 2024.
Making a case for raising prices of diesel, kerosene and LPG, the Reserve Bank on Tuesday said hike in rates of petroleum products is necessary to arrest fiscal slippages.
Enthused by the high 8.4 per cent growth in the second quarter, the Reserve Bank of India on Wednesday revised upwards the economic growth for 2003-04 at 7 per cent.
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Industry's demand for a reduction in the repo rate, currently 8 per cent, has gained momentum after wholesale and retail inflation eased in February.
The need to maintain people's confidence in digital banking resulted in the action against HDFC Bank for service outages, RBI Governor Shaktikanta Das said on Friday and exhorted lenders to invest more on the technology front.
