India's retail inflation marginally increased to 3.4 per cent in March, up from 3.21 per cent in February, primarily due to an uptick in certain food items and the initial impact of the West Asia crisis on fuel prices, according to government data.
The Reserve Bank of India on Thursday opted for a pause second time in a row, maintaining key benchmark policy rate at 6.5 per cent as inflation moderates. The rate increase cycle was paused in April after six consecutive rate hikes aggregating to 250 basis points since May 2022. Announcing the bi-monthly monetary policy, RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) unanimously decided to keep the rate unchanged at 6.5 per cent.
Stock markets closed higher on Friday after the Reserve Bank of India kept its benchmark interest rate unchanged as expected and proposed allowing banks to lend to Real Estate Investment Trusts (REITs) with certain prudential safeguards to deepen the financing pool for the real estate sector.
In the last policy review in December, RBI had decided to keep policy rate unchanged.
India's GDP for the three-month period ended September 30 grew 7.4%.
Retail inflation crossed the RBI's comfort level and rose to 5.21 per cent in December on increase in prices of food items.
While participants in the domestic financial market are expecting a 25 basis-point policy repo rate cut in the December meeting of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), economists remain torn between a reduction in rate cut and a pause.
Private sector lender IDFC First Bank has lowered its savings account rates and introduced new slabs for small and medium balance categories, effective January 9, 2025, as per its website. The interest slabs and rates for higher balance accounts remain unchanged. Despite the revision, the bank continues to offer one of the highest savings account interest rates in the industry among mid-sized banks.
Mixed views were expressed by top economists on the Reserve Bank of India's (RBI) Monetary Policy Committee's (MPC) decision to hold the repo rate at 5.5% and maintain a neutral stance. While some say the decision was as expected and one more rate reduction is expected this fiscal, there is also a view that rate cut by MPC was warranted given the evolving global situation.
In policy review meet in June, RBI Governor Raghuram Rajan kept interest rates intact.
The Reserve Bank is unlikely to cut the benchmark interest rate in its forthcoming bi-monthly monetary policy review later in the week as retail inflation is still a cause of concern, and there is a possibility of the Middle East crisis deteriorating further, impacting crude oil and commodity prices, say experts.
The RBI has made serious attempts to improve fiscal deficit.
The Reserve Bank of India kept interest rates on hold at 7.50 per cent.
Reserve Bank of India (RBI) Governor Sanjay Malhotra stated that recent regulatory measures to address foreign exchange market volatility, such as capping banks' net open positions, are temporary and aligned with current market conditions, not signalling any structural shift in policy.
The Reserve Bank of India's (RBI) Monetary Policy Committee's (MPC) decision to cut the repo rate by 50 basis points (bps) to 5.5% was contrary to the expectations of many economists. Firstly, most of the economists expected the MPC to cut the repo rate by 25 bps citing the weakening of inflation, prospects of economic growth, geopolitical uncertainty and comfortable system liquidity.
Reserve Bank of India Governor Shaktikanta Das on Friday said the central bank will ensure adequate liquidity in the system to ease the financial stress caused by the Covid-19 pandemic. The central bank reduced the reverse repo rate -- the rate at which banks park their fund with the central bank -- by 25 basis points to 3.75 per cent.
RBI will be cautious easing rates further given oil price uncertainties
The Reserve Bank is unlikely to ease the benchmark policy rate during 2024 given the uncertainty over food inflation, State Bank of India (SBI) chairman C S Setty has said. The US Federal Reserve's first cut in interest rates in more than four years is expected soon, triggering central banks in other economies to follow suit. "On the rate front, a lot of central banks are taking independent calls.
Union Finance Minister Nirmala Sitharaman's call for making lending rates affordable may not resonate anytime soon as banks still struggle with margin compression, and await clues from the Reserve Bank of India (RBI) on liquidity and rate action. Hinting that any lending rate cut was some time away, State Bank of India (SBI) managing director Vinay M Tonse said there was still some aggression in the market regarding deposit pricing.
RBI's likely focus will shift back towards the resolution of non-performing loans in the banking system for reviving credit demand
'The RBI's MPC will maintain the current policy rates (6.50%) at the policy meeting, given ongoing inflationary pressures.'
Markets will look for clear guidance on how the MPC interprets the uncertainty and what it implies for the future course of monetary policy, points out Rajeswari Sengupta.
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.
The government on Thursday kept interest rates unchanged on small savings schemes, including NSC and PPF, for the second quarter of 2022-23 amid high inflation and rising interest rate. The interest rate on small savings schemes has not been revised since the first quarter of 2020-21. Public Provident Fund (PPF) and National Savings Certificate (NSC) will continue to have an annual interest rate of 7.1 per cent and 6.8 per cent, respectively, in the second quarter of this fiscal.
The RBI is likely to reduce the key interest rate by 25 basis points this week after keeping it on hold for two years, complementing the Union Budget initiatives to push consumption-led demand, though the sliding rupee continues to be a concern. As the retail inflation has remained within the Reserve Bank's comfort zone (less than 6 per cent) for most of the year, the central bank can take rate action to boost growth hit by sluggish consumption, opined experts.
British banking major RBS on Thursday said it expects the Reserve Bank to cut key rate by 25 basis points or 0.25 per cent in its monetary policy review next week, leaving the cash reserve ratio (CRR) unchanged.
The Reserve Bank of India (RBI) has extended the trading hours for the interbank call money market from July 1, and that of repo and tri-party repo markets from August 1. Market participants said the decision is intended to help reduce the large Standing Deposit Facility (SDF) balances held by banks with the RBI, thereby addressing liquidity mismatches.
A neutral monetary policy stance, heavy government borrowing, and issuers adjusting to a higher-for-longer yield environment have set the stage for a largely stable corporate bond market in 2026.
The Reserve Bank of India on Friday decided to leave benchmark interest rate unchanged at 4 per cent but maintained an accommodative stance as the economy faces heat of the second Covid wave.
Uncertainties over the impact of the United States' (US') tariffs on India, along with the ongoing transmission of past rate cuts, prompted the members of the Reserve Bank of India's Monetary Policy Committee (MPC) to maintain the status quo during the August meeting, the minutes showed. While some of the external members highlighted their concern over growth, the internal members cited the one-year headline inflation rate overshooting the 4 per cent target.
Reserve Bank of India (RBI) is unlikely to cut the benchmark interest rate at its upcoming monetary policy review meeting, taking place soon after the announcement of the Lok Sabha election results, amid inflation challenges, said experts. The Monetary Policy Committee (MPC) may also refrain from rate cut as economic growth is picking up, notwithstanding the elevated interest rate of 6.5 per cent (repo) prevailing since February 2023. The meeting of the Reserve Bank Governor Shaktikanta Das headed MPC is scheduled for June 5 to 7.
The interest rate on these schemes have remained unchanged for over a year now.
Some public sector banks, including State Bank of India (SBI), Union Bank of India, Canara Bank, and Bank of India, are increasing the spread on home loans for new customers to protect margins.
While the economy will wait for a rate cut in December, the banking industry should be happy with the wave of liberalisation -- a big push for growth in bank credit, points out Tamal Bandyopadhyay.
In the mid-year monetary policy review on Tuesday, RBI, left the key interest rate unchanged but reduced cash reserve ratio by 0.25 per cent to infuse additional liquidity of up to Rs 17,500 crore (Rs 175 billion) into the system.
RBI Governor Raghuram Rajan will announce the monetary policy on April 1 and expectations of a status quo are rising ever since the official data on consumer price inflation for February pointed to a cool down to 8.1 per cent.
'The central bank has highlighted that the slowdown in growth has been limited to a few sectors and overall growth is expected to pick up in the second half of the year.'
A day after the Reserve Bank kept key interest rates unchanged, the International Monetary Fund on Wednesday said further interest rate increases are needed in India with monetary conditions still accommodative and credit expanding strongly.
RBI, in its first bi-monthly monetary policy statement, left the short-term lending rate, or repo rate, unchanged at 8 per cent and the cash reserve ratio static at 4 per cent.
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The repo rate continues to be at 8 per cent while the cash reserve ratio has also been retained at 4 per cent despite inflation based on the Wholesale Price Index coming down to a 5-year low of 1.77 per cent in October.
