Reserve Bank of India governor Bimal Jalan reiterated Monday the bank's soft monetary bias but said there was no immediate plan to cut the short-term repo rate.
Monetary policy committee had recommended no change in the key rate.
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.
Reserve Bank on Tuesday kept the bank rate and CRR unchanged, but hiked repo and reverse repo rate by 0.25 per cent to 5.5 per cent and 6.5 per cent respectively as part of measures to rein in inflation.
Passenger vehicle sales in India are estimated to have surged by nearly 25 per cent in June 2024, reaching approximately 4 lakh units, with Maruti Suzuki, Tata Motors PV, and Mahindra & Mahindra leading the growth, despite concerns over geopolitical tensions and monsoon impact.
Reserve Bank of India Governor Bimal Jalan said on Friday that there was no proposal to lower the short-term benchmark repo rate now.
Reserve Bank Governor Sanjay Malhotra on Friday said the key policy rates will remain at low levels for a long period and may go down even further.
The Reserve Bank of India on Saturday decided to reduce the one-day and 14-day repo rate under the liquidity adjustment facility by 0.5 per cent to 4.5 per cent with effect from Monday.
Expressing disappointment over the hike in repo rate by the RBI, India Inc on Friday said a rate cut by the bank would have helped ameliorate sentiments as businesses are "reeling" under a tight liquidity crunch due to high cost of capital.
Given the relevance of bank deposits for Indian savers, whether the regulator would permit linking savings interest rate to a repo-like structure needs to be seen, as a move of this nature could increase volatility in savings also.
With retail inflation surprising on the upside, the six-member monetary policy committee (MPC) of the Reserve Bank of India (RBI) is expected to increase the repo rate by 35-50 basis points (bps) in the review scheduled for September 28-30. According to economists, the central bank will continue to focus on bringing inflation down even though economic growth has remained sluggish. Data released by the government on Monday showed that the consumer price index (CPI)-based inflation increased by 7 per cent year-on-year (YoY) in August, thus, staying above the upper tolerance limit of the central bank for all the eight months of 2022.
IT majors and Maruti Suzuki down 8% were the top losers among Sensex-30.
"Our endeavour is to bring headline inflation in line with the target over the medium term," said RBI Governor Sanjay Malhotra, addressing concerns about the central bank's policy stance and economic outlook.
India's banking system liquidity has fallen into a deficit for the first time in nearly three months, prompting the Reserve Bank of India (RBI) to inject 1.41 trillion through a seven-day variable rate repo (VRR) auction to ease the temporary tightness.
Reserve Bank of India chief Bimal Jalan reiterated on Monday the bank's soft monetary bias but said there was no immediate plan to cut the short-term repo rate.
In January, the RBI hiked its cash reserve ratio or the amount banks keep with the central bank by 0.75 per cent to 5.75 per cent.
Reserve Bank of India cut interest rates for a third time this year.
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.
The RBI seems to be acknowledging that all deposits are not equal -- a deposit with a lower run-off assumption is inherently more valuable than one that could disappear overnight, points out Tamal Bandyopadhyay.
Finance Minister P Chidambaram on Tuesday said that the 0.25 per cent hike in repo rates by the Reserve Bank of India
Most members of the Reserve Bank of India's Monetary Policy Committee (MPC) expressed concerns about inflation becoming generalised and highlighted uncertainties surrounding both inflation and growth prospects due to the West Asia conflict, according to the recently released minutes.
Banking shares are down up to 11% after the Reserve Bank of India has increased the policy repo rate by 25 basis points from 7.25% to 7.5% with immediate effect.
The central bank deputy chief said on Monday that the monetary authorities were unlikely to lower the repo rate from the current five per cent for quite some time.\n\n\n\n
The Reserve Bank of India on Friday decided to keep the policy rate unchanged at 6.5 per cent for the fifth time in a row as it maintains a tight vigil on inflation. 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 repo rate unchanged at 6.5 per cent.
The Indian banking system's net liquidity surplus has reached a four-year high of Rs 4.57 trillion, driven by maturing government securities, with further maturities expected to push the surplus to around 5 trillion.
India's central bank kept its key repo lending rate unchanged at 6.75 percent on Tuesday.
Banks and realty among the most hit on account of high borrowing costs.
'Rate cut looks unlikely and there is reason to believe that the cycle is over.'
The Indian rupee is highly vulnerable among Asian currencies, with Barclays and MUFG warning of a potential depreciation towards 100/$ if the West Asia conflict persists, driven by widening current account deficits and elevated crude oil prices.
The move will to a large extent speed up the monetary transmission process--which is banks passing on the rate cuts that the Reserve Bank announces to their borrowers without much delays--something that has been missing all these while and something that the RBI has been unhappy with.
India Inc on Friday said it is looking forward to a repo rate cut in future as cost of funds has to come down in coming times, and expects continuation of accommodative policy stance by the Reserve Bank of India (RBI). The RBI decided to leave the benchmark interest rate unchanged at 4 per cent but maintained an accommodative stance, as the economy faces the brunt of the second COVID-19 wave. Sanjay Aggarwal, president of PHD Chamber of Commerce and Industry, said the RBI has maintained an accommodative stance as long as necessary to revive and sustain growth on a durable basis and to mitigate impact of COVID-19, apart from an aim to keep inflation within the target.
The MPC headed by RBI Governor Urjit Patel said that the recent excise duty cut by the government on petrol and diesel will help contain inflation.
Reserve Bank of India governor, Bimal Jalan, said on Monday there was no proposal to cut the repo rate as of now and added the bank's bias towards soft rates would continue.
RBI said inflation in the second half of the current fiscal is projected at 2.7-3.2%. It retained its GDP forecast for the current fiscal at 7.4%
Home loan consumers shouldn't rejoice yet expecting a cut in their home loan rates, feels Harsh Roongta, CEO, Apnapaisa.com, a day after the banking regulator Reserve Bank of India cut the repo rate by 0.5 per cent.
Banks and bond dealers expect RBI to slash its bank rate by 0.50 per cent and reduce repo rate by 0.25-0.50 per cent in the forthcoming busy season credit policy, going by the excess liquidity and lower yield on government papers.
The Monetary policy committe comprising 6 members voted 6-0 in the favour of the rate cut.
Reserve Bank of India has kept options open for a possible repo rate cut but said there was no "great urgency" for slashing it from the present level of 5.0 per cent.
The Reserve Bank of India (RBI) is likely to take a "more dovish" stance in its upcoming monetary policy review on December 2 and may go in for a cut repo rate in February, according to a British brokerage house report.
India's banking system is grappling with a persistent liquidity surplus exceeding Rs 5 trillion, driven by significant government spending and bond redemptions, leading market participants to anticipate the Reserve Bank of India will step up Variable Rate Reserve Repo operations to manage the excess funds.
