Benchmark lending rates unchanged with repo rate at 5.25%
The Reserve Bank of India (RBI) on Friday cut the repo rate by 25 basis points to 6.25 percent, marking the first reduction in five years. The central bank also projected GDP growth for fiscal year 2026 at 6.7 percent and inflation to come down to 4.2 percent in FY26 from 4.8 percent in FY25. The RBI said the global economic backdrop remains challenging but the Indian economy continues to remain strong and resilient.
RBI cuts GDP growth projection to 6.6 per cent for current financial year, from earlier forecast of 7.2 per cent.
The Reserve Bank on Wednesday hiked key benchmark policy rate by 25 basis points to 6.5 per cent, citing sticky core inflation.
Even if the Reserve Bank of India's Monetary Policy Committee decided to hold interest rates in the October meeting, it acknowledged the scope for further rate cuts while waiting for the impact of the past steps to play out.
Benchmark interest rate hiked by 50 basis points to 3-year high at 5.90 per cent. Economic growth projection for FY23 cut to 7% from 7.2% estimated in August. GDP expected to grow at 6.3% in September quarter, 4.6% each in December and March quarters.
The apex bank hiked its repo, reverse repo (overnight lending and borrowing rates) to 5.25 per cent and 3.75 per cent, respectively, while the cash reserve ratio, or the portion of deposits banks park with RBI, to 6 per cent in line with analysts' expectations.
Rs 5,000 crore additional liquidity facility to be provided by the National Housing Bank to boost liquidity in housing sector, the RBI said.
* Repo rate reduced by 25bps to 5.25 pc; * 4th rate cut, totalling 125 bps, since February 2025; * MPC also decided to continue with neutral stance; * GDP growth forecast for FY26 raised to 7.3 pc from 6.8 pc;
Benchmark policy rate unchanged at 6.75 per cent.
Monetary Policy Committee keeps key interest rate (repo) unchanged at 4% for 7th consecutive time; Consequently, reverse repo rate too remains unchanged at 3.35%; Bank rate also remains same at 4.25%;
Short-term lending (Repo) rate is unchanged at 8 per cent.
The RBI has cut key rates to boost the economy.
Major laggards among Sensex constituents included Bharti Airtel, Hindustan Unilever, Tata Steel and ITC. Power Grid, UltraTech Cement, NTPC and Titan emerged as winners.
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.
From the Sensex pack, Power Grid, Mahindra & Mahindra, JSW Steel, HCL Technologies, Sun Pharma, Nestle, IndusInd Bank, Reliance Industries, Bharti Airtel and ITC were the major laggards. Tech Mahindra, Wipro, Bajaj Finance, State Bank of India, Bajaj Finserv, Axis Bank, Titan and ICICI Bank were among the major gainers.
From liquidity, monetary policy operations to financial inclusion, know about RBI monetary policy
These are the highlights of the seventh bi-monthly monetary policy statement for 2019-20 by the RBI amid COVID-19 pandemic:
Highlights of RBI's third quarter review of monetary policy.
Next bi-monthly policy statement on September 30.
The central bank raised statutory liquidity ratio, the portion of deposits that banks are required to keep in government securities, by 100 basis points to 25 per cent. Other key rates were unchanged.
Reducing policy rates is not enough. The key is to ensure banks lend to credit-constrained borrowers.
Short-term lending rate unchanged at 7.75 pc.
The highlights of RBI's bi-monthly monetary policy announced by Governor Shaktikanta Das:
Frequent weather shocks caused by climate change pose challenges for the monetary policy as well as downside risks to economic growth, a Reserve Bank report said. Global average temperatures are on a rise, with accompanying increase in extreme weather events (EWE), and the economic and social impact of global warming is becoming increasingly evident, said RBI's Monetary Policy Report - April 2024. The report said that climate change has increased the frequency and ferocity of weather shocks, posing challenges for monetary policy.
Amid expectations that the Reserve Bank may keep its monetary stance unchanged, the central bank will come out with its second quarter review of the credit policy for the current fiscal on October 27.
The central bank kept cash reserve ratio unchanged at 4 per cent.
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.
'We never waste a crisis. There will be learning and the supervisory tools will get better with each episode.'
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.
Subbarao's annual statement will be of unusual interest this year
RBI Governor Sanjay Malhotra stated that the central bank is closely monitoring whether the supply shock from the West Asia conflict will lead to a generalised price rise, potentially necessitating monetary policy action.
The central bank was widely expected to maintain status quo.
The Indian stock market is poised for a volatile week, influenced by the Reserve Bank of India's monetary policy decision, crucial global macroeconomic data, and the escalating geopolitical tensions in West Asia, according to market analysts.
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.
Faced with the challenging task of balancing growth and inflation, the Reserve Bank of India will take measures in its quarterly review later this month to perk up the economy and to control inflation, which rose to 0.83 per cent for the third week of September.
The RBI has set up a panel to review ATM charges, and fees levied by banks.
"It is heartening to note that the RBI has chosen growth over monetary tightening and inflationary fears," FICCI president Harsh Pati Singhania said.
Uncertainties stemming from the West Asia crisis and its potential impact on inflation and economic growth were key factors in the Reserve Bank of India's Monetary Policy Committee (MPC) decision to maintain the status quo on interest rates, according to the recently released MPC meeting minutes.
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