The Reserve Bank of India in its quarterly monetary policy review has hiked rates.
Outgoing Reserve Bank Governor Shaktikanta Das said on Tuesday that restoring inflation-growth balance is the most important task ahead of the central bank. Addressing a press conference on his last day as the central bank chief, Das said his successor will have to navigate the changing world order, effectively deal with cyber threats, and focus on harnessing new technologies.
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.
RBI had previously cut repo rate by 0.25 per cent each in January and March.
Governor Raghuram Rajan's move to cut the MSF rate, at which banks borrow if they exceed their repo borrowing limits, by 0.50 per cent to 9 per cent should not be construed as a reversal in his policy stance and is more of a normalising measure, Citi said in a note.
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%;
The apex bank in its monetary policy for 2010-11 hiked the repo and the reverse repo to 5.25 per cent and 3.75 per cent, respectively, and the CRR to 6 per cent.
The Reserve Bank of India (RBI) kept its key policy repo rate unchanged at 8.0 percent on Tuesday, as widely expected, while expressing concerns about risks to its target to bring consumer inflation down to 6 percent by January 2016.
RBI retained the GDP growth for the financial year 2018-19 at 7.4 per cent.
'The rate cut could have been higher in the current economic conditions which would have had a stronger impact on business sentiment and spurred investment in a big way.'
The central bank may increase both repo and reverse repo rates by another 25 basis points each in the next policy meeting.
'Maintain a balanced approach with a preference for short-to medium-duration funds.'
'Choose an FD tenure that provides a balance between returns and the horizon for which you can invest.'
Analysts feel the RBI should not opt for another hike in the calendar year.
Most say a rate cut could come in RBI's June policy.
A host of lenders, including State Bank of India, IDBI Bank, Indian Bank and Andhra Bank, have lined up meetings of their asset-liability committees this week, to review their lending and deposit rates.
Wholesale price inflation (WPI) softened to 0.13 per cent in September on easing in prices of food articles and manufactured items, government data showed on Tuesday. WPI-based inflation was 0.52 per cent in August and 1.91 per cent in September last year.
RBI ups inflation target to 7 per cent from 6 per cent projected earlier.
'When you need to revive the economy, when you need to revive aggregate demand, you cut taxes.' 'But what's this government doing?' 'It's increasing taxes for the middle class and the vast majority of the poor on fuel, which has a ratchet effect on most other products.'
Due to tight liquidity condition, RBI would cut cash reserve ratio.
The Reserve Bank on Friday said India is poised to become the growth engine of the world as it retained the GDP projection for the current fiscal at 6.5 per cent. Unveiling the bi-monthly monetary policy review, Reserve Bank of India (RBI) Governor Shaktikanta Das said the domestic economy exhibits resilience on the back of strong demand.
India's corporate bond market, driven by public sector undertaking (PSU) banks and financial institutions last year, is losing momentum since the second quarter of FY26.
Declining price of vegetables pulled down inflation to over three-year low of 5.96 per cent in March, core inflation moderated to 3.5 per cent and food price inflation also eased to 8.2 per cent, which is likely to prompt the RBI to consider a rate cut in its annual monetary policy next month.
Despite sharp interest rate cuts expected in this financial year amid easy liquidity conditions, state-run banks are treading cautiously on their loan growth projections for FY26. Most large banks are projecting loan growth at 11-13 per cent, almost similar to the previous financial year.
Retail inflation slipped to 1.54 per cent in September from 2.07 per cent in the preceding month mainly due to subdued prices of food items, including vegetables and pulses, according to government data released on Monday. The consumer price index (CPI) based inflation was 5.49 per cent in September 2024.
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.
The Reserve Bank of India (RBI) may not go in for key policy rate cuts in its quarterly policy review slated for January 23, said a senior finance ministry official.
RBI Governor Raghuram Rajan is expected to express that cautiousness as he looks to manage expectations.
With Deputy Governor Viral Acharya and another member Chetan Ghate voting for a status quo, RBI governor Shaktikanta Das and three others outvoted them for reduction in repo rate to 6.25 per cent from the existing 6.50 per cent.
Consumer price inflation touched a nine-month high of 11.24 per cent last month.
The Reserve Bank of India on Tuesday left all the key interest rates unchanged in the first quarterly review of the monetary policy.
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.
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.
As it stands, there does not seem to be a threat to prices.
CII suggested the policy measures required to ease the tight liquidity situation by cutting CRR by at least 50 basis points.
RBI has announced a 50 bpc rate cut, India Inc cheers the move.
Maruti, IndusInd Bank, Bajaj Finserv, Eternal, Mahindra & Mahindra, Tata Steel, Kotak Mahindra Bank, Titan, HDFC Bank, and NTPC were among the other major gainers. Bharti Airtel and Sun Pharma were the laggards.
'Investment creates capacity and reduces inflation. Income, employment, and savings rise.'
After two rate hikes in less than six weeks aimed at curbing inflation, RBI Governor Raghuam Rajan on Wednesday said the central bank may be done with interest rate increases as their impact on the economy is assessed.
The central bank had nudged banks to cut lending rates.
