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.
Weakness in the rupee against the US dollar also weighed on domestic stocks. The local unit fell 11 paise to 70.60 against the US dollar intra-day.
Reserve Bank Deputy Governor S S Mundra on Friday said that he expects banks to cut interest rates
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.
The Governor said the MPC had voted to maintain its accommodative stance, implying more rate cuts in the future if the need arises.
After two years of a record low interest-rate regime, Indian corporate houses are experiencing a sharp and abrupt increase in funding costs. With the Reserve Bank of India last month making an unequivocal turn towards policy tightening amid high inflation, firms looking to tap the capital markets for funds are ending up shelling out more. The yield on the benchmark triple-A-rated corporate bonds maturing in three years has climbed 98 basis points (bps) since the policy rate hike in May. It was last at 7.47 per cent, Bloomberg data showed.
The Reserve Bank of India in its quarterly monetary policy review has hiked rates.
The repo rate has been unchanged since January, when the RBI increased it by a quarter percentage point.
Public sector banks have already begun slashing their prime lending rates while some in the private sector space have so far refrained from doing so. "Private sector banks will (now) have to reduce their rates," Prime Minister's Economic Advisory panel chief Suresh Tendulkar said. "Banks are well-capitalised but the current problem is that they are unwilling to lend."
The RBI's next policy review is set for Sept. 29.
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.
Kotak Mahindra Bank was the biggest loser in the Sensex pack, sliding 2.68 per cent, followed by Tech Mahindra, Mahindra & Mahindra, Axis Bank, Hindustan Unilever, Tata Motors, Tata Consultancy Services, Bajaj Finserv, Bajaj Finance, Nestle and Titan. In contrast, NTPC, Power Grid, Larsen & Toubro, HDFC, Reliance and HDFC Bank were the gainers.
Part of a focus on retail advances, as corporate demand remains subdued; could reverse if RBI raises repo next month
Elections may be a few months away, but the government may get into election mode much earlier than that, predicts A K Bhattacharya.
The Reserve Bank of India (RBI) unexpectedly kept the country's policy interest rate on hold on Wednesday, despite calling current inflation too high, citing the prospect of easing retail prices and its concerns about the weak domestic economy.
India's booming real estate sector might feel the pinch after RBI's decision to hike short-term interest rates, as a possible shift in bank lending away from the sector as well as an imminent hike in home loan rates could spoil the realty party.
Most members of the Reserve Bank of India's monetary policy committee (MPC) decided to stick to the course on bringing retail inflation to the target of 4 per cent while voting for maintaining status quo in the April review, except external member Jayanth Varma who voted for a 25 bps cut in the repo rate. "I believe that the extant monetary policy setting is well positioned," RBI governor Shaktikanta Das said in the minutes of the policy review, which came out on Friday. "Monetary policy transmission is continuing and inflation expectations of households are also getting further anchored.
The Reserve Bank will go for a "dovish pause" at Wednesday's policy review announcement amid developments such as a rise in inflation, government maintaining the inflation target band and a likely impact on growth due to local lockdowns on rising COVID-19 infections, analysts said on Monday. Economists at American brokerage Bofa Securities said price stability, growth and financial stability will become the prime focus areas for the central bank going forward. "The RBI MPC (Monetary Policy Committee) should deliver another dovish pause on Wednesday," it said. The policy announcement, the first for the fiscal, will come days after the government maintained the RBI's target to ensure inflation to be within 2-6 per cent band for five more years.
The lender, however, is not likely to reduce its base rate to which all loan rates are linked.
As per SIAM data, the total sales of vehicles across categories registered a decline of 5.45 per cent at 14,51,278 units in February 2013 as against 15,34,910 units in the same month of 2012.
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.
RBI on Tuesday raised the repo rate, at which banks borrow from the central bank, by 50 basis points to 7.25 per cent, thereby making funds costlier for banks.
CRR to remain unchanged at 4.00 pc this fiscal
Listed housing finance companies (HFCs), as a group, posted a 3.7 per cent drop in second-quarter (Q2) profit year-on-year (YoY) to Rs 5,830 crore and 19 per cent sequentially on rise in interest expenses and uptick in provisions and write-offs. Operating income rose 13.7 per cent YoY to Rs 54,086 crore in Q2 of 2022-23 (FY23). Sequentially, income was up 62.3 per cent, from Rs 33,331 crore in the first quarter (Q1) of 2021-22 (FY22).
As it stands, there does not seem to be a threat to prices.
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.
Bankers and other stakeholders are now almost certain that the Reserve Bank of India (RBI) will increase the key policy rate, or the repo rate, by 25 basis points (bps) on Tuesday.
If the interest rate on bank deposits is linked to any external benchmark, it would jeopardise the banks' fund-raising ability. Interest rates on small savings schemes are likely to be reduced very shortly, to maintain parity. All these steps would indeed affect retired people, and particularly those dependent on interest income, says Arindam Gupta.
Mirroring weak cues from the overseas markets, the Sensex opened with a negative gap of 215 points at 10,765. The index thereafter tried to recover but slipped to lower levels after the Reserve Bank of India (RBI) announced its annual credit policy.
RBI has announced a 50 bpc rate cut, India Inc cheers the move.
Real estate companies' borrowing costs have moved up by a third in the last one and a half years, from 11.5-12 per cent to 16 per cent now.
'Comparing the rates of interest with PSU banks, the three- and five-year time deposit rates of the post office are more favourable.'
Growth remains weak, inflation is within 2-6% range, rate cut would help recoup forex reserves
The Indian currency resumed lower at 61.50 per dollar as against the last closing level of 61.46 at the Interbank Foreign Exchange Market.
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.
RBI slashes repo and reverse repo rates to all-time lows.
The transmission of the last cash reserve ratio cut has also not happened fully because that came in March.
Retail inflation crossed the RBI's comfort level and rose to 5.21 per cent in December on increase in prices of food items.
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