This is contrary to the expectations of a majority of analysts predicting for another hike given the rise in inflation lately, including domestic ratings agency Icra
The economic growth is likely to moderate to 6.1 per cent, slowest in over seven quarters, from 6.6 per cent last year same period.
Higher for longer' may be the narrative in the developed markets, but interest rates might not stay high for very long in India, with a section of the market expecting rate cuts to begin this year. The six-member Monetary Policy Committee of Reserve Bank of India (RBI) decided to keep interest rates unchanged at 6.5 per cent in the April review - after hiking the policy repo rate in six previous meetings. RBI Governor Shaktikanta Das emphasised that the pause was only for the April policy and that the central bank was ready to act if the situation demanded.
Financial markets are under stress and require steps by the central bank for market stability and revival of economic growth, he said while announcing the decisions taken by the Monetary Policy Committee in Mumbai.
The Reserve Bank of India (RBI) is expected to keep policy rates unchanged at a six-weekly rate review on Tuesday, ending a year-long cutting cycle as it focuses instead on underpinning the plunging currency.
'Investors can consider staying invested in long duration products as there is a possibility of rate cuts in the near term.' Positive macros - lower inflation, high forex reserves and favourable demand-supply dynamics for government bonds - make a strong case for rate cuts from December, says Devang Shah, head of fixed income, Axis Mutual Fund. In an interview with Abhishek Kumar in Mumbai, Shah says this view may not hold true if commodity prices go up sharply.
These cash shortages increase banks' funding costs, making it harder for them to lower lending rates
The Indian economy is recovering from the slowdown in momentum witnessed in the September quarter, driven by strong festival activity and a sustained upswing in rural demand, according to a Reserve Bank of India (RBI) bulletin released on Tuesday. An article on the 'State of the Economy' in the December bulletin noted that the global economy continues to exhibit resilience with steady growth and moderating inflation.
RBI's likely focus will shift back towards the resolution of non-performing loans in the banking system for reviving credit demand
'Investment creates capacity and reduces inflation. Income, employment, and savings rise.'
Shares of rate-sensitive realty, bank and auto sectors were on buyer's radar on Wednesday.
Gains were led by index heavyweights with Reliance Industries contributing the most.
Despite inflation easing, experts see RBI maintaining status quo on Dec 2
Private sector lender ICICI Bank has revised its external benchmark lending rate (EBLR) to 8.10 per cent, and state-owned Bank of Baroda has raised the rate to 6.90 per cent with immediate effect after the RBI hiked the key repo rate. Likewise, two other public sector banks -- Bank of India and Central Bank of India -- have also raised the repo linked lending rate. In an out of turn Monetary Committee Meeting (MPC), the Reserve Bank on Wednesday announced to hike the benchmark repo rate -- the short term lending rate it charges to banks -- by 0.40 per cent to 4.40 per cent with immediate effect, aimed at taming the rising inflation caused by the global geopolitical situation.
There is evidence of asymmetric adjustment to monetary policy
With the economy heading for a double-digit inflation due to the spiralling food prices and costlier fuels and manufactured articles, the Reserve Bank is expected to hike its key policy rates next month, say leading economists.
The criticism that the Reserve Bank of India was behind the curve in hiking interest rate to tame rising inflation is unfair, former RBI Governor D Subbarao said on Wednesday and asserted that it is difficult for any central bank to anticipate the future more accurately. Earlier this month, Monetary Policy Committee (MPC), the central bank's rate-setting panel, surprised the markets with a 40 basis points hike in repo rate in an off-cycle policy meeting. It was also the first rate hike after August 2018, amid spiralling inflation.
The US Fed rate cut of 50 basis points is unlikely to have any significant impact on foreign inflows into India, Economic Affairs Secretary Ajay Seth said on Thursday. He said the US Federal Reserve has done what it assesses is good for the largest economy in the world, but the RBI will take a decision on interest rate cut keeping the Indian economy in mind. "It is a positive for the global economy, including the Indian economy. "It is a 50 basis points cut from a high level.
Encouraged by softening inflation, the RBI on Thursday decided to cut the benchmark interest rate by 0.25 per cent to 7.75 per cent with a view to boost growth.
He feels that RBI could be waiting for a period or an opportune movement when there could be sustained reduction.
A bit of good news is that it has already mopped up $19 billion in forwards in May.
Inflation to peak in the current quarter within tolerance band, moderating in the second half of next fiscal, says central bank.
Expressing disappointment over RBI's decision to hike the key policy rate, real estate developers said this would lead to increase in finance cost and also affect housing demand during the festive season.
Lower inflation, FCNR(B) outflows likely to influence central bank decision
It further pointed out that the twin balance sheet problem -- at the end of banks and corporate -- more attractive interest rates for borrowers in the bond market and from non-banking financial institutions are other reasons for slow bank credit growth.
While there is pressure on the Reserve Bank of India to cut policy rates to spur stagnating industrial growth rates, Pronab Sen, principal advisor to the Planning Commission, says the central bank should exercise caution till it is sure inflationary expectations are under control.
The Lok Sabha elections in 2024 are not a consideration when it comes to monetary policymaking, said Reserve Bank of India governor Shaktikanta Das to underscore the central bank's commitment to controlling inflation. "It's not possible for me to comment what we do in the next MPC (Monetary Policy Committee), but one thing I can tell and I would like to make it very clear-that the fact of elections coming up in 2024 is not a factor at all so far as monetary policymaking is concerned. "Monetary policymaking is for checking (and) controlling inflation," Das said at the Business Standard, BFSI Insight Summit.
Bank Nifty pared all its intraday gains to end over 1% lower led by losses in BoB, ICICI Bank, Axis Bank and Bank of India
The index of industrial production -- gauge of industrial activity in terms of production -- showed a 2.4 per cent growth in May, down from 6.2 per cent a year ago.
The Reserve Bank of India (RBI) would further cut down key policy rates with inflation continuing its downward trend, Punjab National Bank chairman and managing director K C Chakrabarty said.
Most banks are yet to pass on the benefits to the consumers.
The cut in the policy rate by RBI will help lower interest rates
Price rise in services sector after the goods and services tax (GST) gets implemented and the pay hike of central government employees will make inflation control a tough job for the central bank
The Reserve Bank of India on Friday decided to keep the benchmark interest rate unchanged at 4 per cent but maintained an accommodative stance as the economy is yet to recover from the impact of the second Covid wave.
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.
Reserve Bank Governor Raghuram Rajan is widely expected to hold the key rates citing high inflation at the fourth bi-monthly monetary policy announcement on Tuesday, even though the pro-growth lobby has been wishing for a rate cut.
The repo rate, at which the central bank lends to the system, will come down to 5.75 per cent after the cut.
From the 30-share pack, Adani Port, Bharti Airtel, Asian Paints, IndusInd Bank, Bajaj Finserv, Reliance Industries, Infosys, UltraTech Cement, HDFC Bank, HCL Technologies and ICICI Bank were among the laggards. Tata Motors, Axis Bank, Maruti, Larsen & Toubro, ITC and Tata Steel were among the gainers.
RBI kas hiked short-term lending (repo) rate by 0.25 per cent to 7.5 per cent.
