Real estate developers and consultants on Tuesday said RBI's decision to hike policy rates by 25 basis points will affect the sentiment of the property market, but they do not foresee any major impact on housing demand and prices.
"He (RBI governor Duvvuri Subbarao) has explained the position. I think the governor's statement is very balanced, very appropriate as far as I could understand," Reddy said.
The Reserve Bank has decided to keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of their net demand and time liabilities and keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 7.25 per cent.
Growth remains weak, inflation is within 2-6% range, rate cut would help recoup forex reserves
Fitch Solutions sees RBI keeping benchmark interest rates unchanged during the fiscal to March 2022 following its decision to buy Rs 1 lakh crore of government bonds. "We had initially expected another policy rate cut to arrest the rise in government bond yields since the Union Budget announcement in February. "However, having an explicit bond purchase guidance from the RBI following the announcement of the G-SAP will also achieve a similar effect, if not even be more effective than a rate cut on capping the increase in bond yields," it said in a note. The Reserve Bank of India (RBI) held its policy repurchase (repo) rate unchanged at 4 per cent at its monetary policy meeting on April 7.
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.
Banks are expecting a 25-basis-point increase in the repo rate (7.75 per cent at present) -- the central bank's short-term lending rate against government securities -- when the Reserve Bank of India announces its monetary policy on April 24.
RBI's liquidity tightening stance had stumped the Street as a result of which bond yields had risen.
The Reserve Bank may go for a final 25 basis points increase in the current rate hike cycle next week and a reduction would come in only by the end of third quarter of FY24, economists at Axis Bank said on Wednesday. As per media reports, RBI officials met economists on Tuesday, and the latter have suggested the central bank to go for a 25 basis points hike in key rates. Since May 2022, the RBI has hiked rates by 250 basis points, hurting borrowers and some are already concerned about loan tenors extending beyond their working lives as a result of the hikes.
At present, the repo rate acts as the policy rate when liquidity is in deficit mode while reverse repo becomes the operating rate when there liquidity is surplus.
The members of the Reserve Bank of India's (RBI's) Monetary Policy Committee (MPC) voiced different views on the interest rate and stance, with two of them indicating they may not vote for further rate increases even if Governor Shaktikanta Das and Deputy Governor Michael Patra maintain bringing down inflation as their primary objective, the minutes of the December review of the monetary policy showed. The other two members remained neutral. The MPC increased the policy repo rate by 35 basis points (bps) - which was lower than the previous three hikes of 50 bps. The repo rate has been hiked by 225 bps to 6.25 per cent since May this year.
While the rate increase was beyond Street expectations, it would put further pressure on demand and profitability of firms in rate-sensitive segments.
While demand for sub Rs 50-lakh affordable housing prevails, market players cite increased land rates, escalated construction costs and low margins as key prohibiting factors.
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 Shaktikanta Das on Friday said that this stage would have been "premature" and "very very risky" as the retail inflation is still high, and future monetary policy action would depend upon the income data and outlook. Earlier this month, the RBI continued to maintain the status quo in the short-term lending interest rate (repo), citing inflationary concerns, though it changed the monetary policy stance to neutral.
The Reserve Bank of India (RBI) conducted two overnight variable rate reverse repo (VRRR) auctions on Tuesday, marking the first instance of such action in a single day. The move aimed to reduce liquidity from the banking system, which has been largely in deficit mode for the past four months. Market participants noted that the central bank held the second VRRR auction due to its awareness of funds being released to banks during the day.
It believes that RBI will continue with liquidity infusion through CRR cuts and open market operations. Rate cut may happen only in January
It's not the high interest rates that's affecting the economy but the policy bottlenecks.
The finance ministry wants the Reserve Bank of India (RBI) to switch its policy stance, with growth concerns occupying centre stage and inflation showing signs of moderating.
These are the highlights of the seventh bi-monthly monetary policy statement for 2019-20 by the RBI amid COVID-19 pandemic:
CRR to remain unchanged at 4.00 pc this fiscal
It maintained, however, that RBI's lending (repo) and borrowing (reverse repo) rates to banks will rise by 75 basis points (0.75 per cent) in 2010, in view of rising prices coupled with the surge in industrial production.
Lending rates have to be sensitive to the policy rate, says RBI.
The Reserve bank of India has kept the repo rate and reverse repo rates unchanged in its mid-quarter review of monetary policy announced on Thursday.
The Reserve Bank of India is unlikely to change the policy rates the repo and reverse repo rates in its mid-term review of the monetary policy amid persistent inflationary expectations following copious foreign capital inflows. Headline inflation has dropped significantly below RBI's target of 5 per cent for 2007-08 but this is a result of the government deciding not to pass on the increase in oil prices to consumers.
RBI policy surely cannot impact agflation, in any case.
With RBI rate cut, loans are likely to be cheaper.
With the RBI infusing Rs 7.5 lakh crore in liquidity -- and possibly more in the future -- the short- to medium-term corporate bond market is expected to benefit.
The Reserve Bank may announce cut in policy rates up to 50 basis points soon as inflation has been on way downward for past three successive weeks, bankers said.
The Reserve Bank of India has increased the repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 8.0 per cent to 8.25 per cent with immediate effect.
The banking industry is hoping for more rate cuts by the Reserve Bank, which in turn, will help soften both deposit and lending rates, a top financial industry expert said.
The RBI on Tuesday maintained status quo on interest rates, saying there have been no developments to warrant further easing since an unscheduled rate cut about a fortnight ago.
BofA-ML said the liquidity deficit is running higher than the forecasts because the RBI has suspended its bond buybacks or open market operations.
In its quarterly macroeconomic review on Monday, the central bank said it expects inflation to remain near current elevated levels for the remainder of the fiscal year that ends in March.
Axis Bank reported a sharp drop in net profit in the second quarter of financial year 2026 (Q2FY26) on higher provisions and weak operating profit growth while revenue growth was moderate. But loan growth and deposit growth improved to double-digits year-on-year (Y-o-Y) and asset quality also improved with the gross non-performing loan or NPL ratio moving down.
With inflation figures expected to be well within RBI's target, there may be room for further rate cut.
Retail investors could be hesitant to invest in floating rate savings bonds, as these specific bonds tend to be profitable only in a rising rate environment, according to market participants. The Reserve Bank of India has allowed subscriptions for floating-rate savings bonds, 2020, via retail direct - an online portal that enables individual investors to purchase government securities.
Shares of rate-sensitive realty, bank and auto sectors were on buyer's radar on Wednesday.
The rate of interest at which the Reserve Bank of India (RBI) lends money to other banks is called repo rate. At present, it stands at 6.75 per cent.
Cutting the rates and the ratio by about a 100 basis points will send the right signal as well as give the RBI credible room to make further reductions in the coming months as the situation warrants.
