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.
The government has invited applications for the post of deputy governor of the Reserve Bank of India (RBI) from interested candidates with at least 25 years of experience and below 60 years of age as on January 15, 2025. One of the deputy governors, Michael Patra's current term will end on 15 January. The last date of submission of applications is November 30, 2024.
RBI interest rate decision, macroeconomic data and global trends would guide markets' movement this week, analysts said. Besides, trading activity of foreign investors and the last batch of Q1 earnings announcements would also guide trends in equities. HSBC PMI (Purchasing Managers' Index) for the services sector is scheduled to be announced on Monday.
The central bank says that there is room for policy action, but warns of persistent inflation risks.
In trade negotiations, as in chess, sometimes you need to accept a temporary disadvantage to secure a better long-term position, points out Sonal Varma, chief economist (India and Asia ex-Japan) at Nomura.
The Reserve Bank of India is widely expected to lower interest rates for a third time this year.
Forecasting that inflation is inching towards zero, ICICI Bank managing director and chief executive officer K V Kamath on Tuesday suggested to the Reserve Bank of India to further cut key policy rates by 100 basis points as part of a calibrated move to usher in a low interest rate regime.
Headline inflation, as measured by the wholesale price index, was 9.7 per cent in March, 8.7 per cent in April and 9.1 per cent in the following month.
The Reserve Bank's rate setting panel on Thursday met to finalise a report for the government on why it failed to keep retail inflation below the target of 6 per cent for three consecutive quarters since January this year, said sources. The report will be presented to the government as per the Reserve Bank of India Act, they added. The six-member Monetary Policy Committee (MPC) is headed by Governor Shaktikanta Das.
In September, the headline inflation accelerated to a seven-month high of 6.46 per cent, while the retail inflation quickened to 9.84 per cent.
Tata Steel was the top gainer in the Sensex pack, climbing 2.11 per cent, followed by Infosys, HDFC Bank, HDFC, Kotak Bank, M&M and PowerGrid. NSE Nifty jumped 142.05 points to end at 17,605.85.
RBI Governor Shaktikanta Das said the central bank saw economic growth slowdown in February, prompting it to cut rates ahead of the curve and wondered why markets were surprised with the decision to pause rate reduction. Noting that there is a need for an "informed and objective discussion" on the country's economy, Das said the RBI would do "whatever is necessary" to address growth slowdown, spikes in inflation as well to ensure good health of banks and non-bank lenders. The apex bank went for five consecutive rate cuts starting in February this year, making it a cumulative reduction of 1.35 per cent.
Majority of the experts expect a 25 basis point reduction.
The halt in the RBI's monetary tightening drive comes after 13 hikes since March, 2010.
The global financial services major had earlier said that the central bank would keep its policy rates on hold.
Of the 52 economists polled, 50 expect the policy repo rate to remain at 7.25 per cent, and 47 of 48 respondents see the cash reserve ratio, or the portion of deposits banks have to maintain with the central bank, unchanged at 4 per cent.
Reserve Bank Governor D Subbarao will, however, not touch the policy rate or the repo, rate at which RBI lends to banks, on October 30 when he unveils the half-yearly monetary policy because headline inflation continues to be elevated at 7-7.5 per cent, the agency said.
According to the global financial services major, the Consumer Price Index based inflation is peaking off and is expected to be around 7.5-8 per cent in September.
Many analysts over the past week have said the RBI has legroom to cut rates to the tune of 65 bps by June and some like Barclays and BofA have also spoken about the likelihood of an inter-meeting cut.
RBI recently hiked the repo and reverse repo rates by 25 basis points to check the spiraling inflation in the country. Any further rate hike is also expected as the RBI has hinted to do so in order to suck excess liquidity from the market.
Banks have reduced their base rate or the minimum lending rate in the range of 0.1-0.5 per cent till April 15.
Inflation declined marginally to 8.23 per cent in January from 8.43 per cent in the previous month, as prices of certain commodities like wheat, pulses and sugar eased, although essential items like onion and other vegetables continue to remain dearer.
The Reserve Bank of India unexpectedly raised its policy interest rate on Tuesday by 25 basis points (bps) but said that if consumer price inflation eases as projected, it does not foresee further near-term tightening.
Reserve Bank is scheduled to announce its bi-monthly monetary policy on August 3.
RBI is closely monitoring monsoon.
The Reserve Bank of India on Tuesday kept key rates unchanged.
Reserve Bank Deputy Governor S S Mundra on Friday said that he expects banks to cut interest rates
Following are the highlights of the RBI's first monetary policy statement of 2022-23 unveiled by Governor Shaktikanta Das: Policy repo rate unchanged at 4%; marginal standing facility rate & bank rate too remain unchanged at 4.25%. Monetary stance to be accommodative with focus on withdrawal of accommodation to keep inflation within target. GDP growth projection for FY'23 slashed to 7.2% from 7.8%; growth projections based on assumption of crude oil (Indian basket) price at $100 a barrel during FY'23. Inflation forecast hiked to 5.7% for FY'23 from 4.5%.
The Reserve Bank of India (RBI) on Monday allowed microfinance lenders to fix interest rates on loans with a rider that those should not be usurious for the borrowers. A microfinance loan is defined as a collateral-free loan given to a household having an annual income of up to Rs 300,000. Each regulated entity (RE) should put in place a board-approved policy regarding pricing of microfinance loans, said the 'Master Direction - Reserve Bank of India (Regulatory Framework for Microfinance Loans) Directions, 2022'. In the past, the central bank used to announce the rates on quarterly basis.
Jaitley said inflation has been under control for long and is likely to remain so on the back of good monsoon and unlikely spike in oil prices.
The government is likely to name a successor to Rajan sometime this month
Economists praise Das for his pragmatism and willingness to face challenges head on. And in doing so with the finesse of an able administrator.
The RBI is understood to be dithering since it would want more clarity on the cost of the fiscal policies the new government would undertake before it decides to cut rates, even though it has pencilled in a lower gross domestic product growth rate for this fiscal year.
The Reserve Bank of India on Wednesday kept the benchmark interest rate unchanged at 4 per cent and decided to continue with its accommodative stance against the backdrop of concerns over the emergence of the new coronavirus variant Omicron.
RBI Governor Raghuram Rajan in his maiden policy review, however, eased liquidity though a reduction in the marginal standing facility rate, at which banks borrow from the central bank, by 0.75 per cent to 9.5 per cent.
CRR is the proportion of deposits each bank must keep in the form of cash.
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.
A week ahead of the RBI reviewing the monetary policy with expectations of a policy rate hike, Commerce and Industry Minister Anand Sharma has cautioned that raising cost of borrowing "may not be suitable" tool to rein in inflation.
The RBI's next policy review is set for Sept. 29.
The monetary authority said it was worried on three fronts with regard to inflation as well as the economy.
