The Reserve Bank of India (RBI) on Wednesday kept its key lending rate â€”the repo rateâ€”unchanged at 6.25 percent against a widely-anticipated cut of 25-50 basis points.
Wholesale prices of pulses, a common source of protein for most Indians, grew 21.80 percent in October compared with 23.99 percent in September.
Strong public investment in roads, railways and inland waterways, and the boost to spending from the 7th Pay Commission‘s award, should improve industrial outlook.
In an interview with CNBC-TV18, C Venkat Nageswar, Deputy MD, SBI, talked about the impact of the RBI's move to open up the corporate bond market and what this would mean for banks.
Indian economy continues to face multiple challenges, and this is being reflected in high frequency data such as industrial production and trade, it added.
This was the biggest award since October 30, when the Fed awarded USD 225.33 billion to 79 bidders at the same rate.
In its fourth bi-monthly monetary policy for the current fiscal, RBI cut benchmark repurchase (repo) rate from 7.25 percent to 6.75 percent, lowest in four-and-half-years.
The country's largest state-run lender, State Bank of India, has cut its base rate by 40 basis points, or 0.4 percent, to 9.3 percent, effective October 5, Chairperson Arundhati Bhattacharya told CNBC-TV18.
Global cues too are negative with the US markets having ended lower with the tech-heavy Nasdaq leading losses with 3 percent slump.
"If recent depreciation pressure on the rupee persists, we suspect that the central bank will be wary of lowering rates further," DBS said in a research note.
A day after RBI decided to keep its policy rates on hold, some top equity research firms including Morgan Stanley and SBI Research on Wedneday said the central bank may ease the rates on favourable macroeconomic data.
Shyam Srinivasan, MD and CEO, Federal Bank, is not alarmed on a full-year basis that margins will get impacted as long as the cost of funds keep going down.
The market has fallen sharply after RBI has kept cash reserve ratio (CRR) unchanged. The Sensex is down 274.08 points or 0.9 percent at 27574.91 and the Nifty is down 93.25 points or 1.1 percent at 8340.15. About 818 shares have advanced, 1243 shares declined, and 128 shares are unchanged.
This is the second out of turn 25 basis-point cut after the one in January. The RBI has, meanwhile, kept the cash reserve ratio (CRR) unchanged at 4 percent.
Borrowers should get rid of misconceptions about home loans and interest rates on home loans. Here is how interest rates are determined and why they fluctuate.
The market seems to be unmoved as the central bank keeps repo rates unchanged but cuts SLR by 50 basis points to 21.5 percent. The Sensex is up 9.22 points at 29131.49 and the Nifty is up 5.05 points at 8802.45.
The real interst rate equals the nominal interest rate minus the rate of inflation. It stands to reason that a depositor or a saver will save only if he gets something more than the inflation rate.
The path of inflation, while below the expected trajectory, has been consistent with the assessment of the balance of risks in the Reserve Bank‘s bi-monthly monetary policy statements, the RBI release said.
With macros improving, Ram Sangapure ED, Punjab National Bank spoke to CNBC-TV18 about the chance of a rate cut from Reserve Bank of India.
RBI Governor Raghuram Rajan is not uncomfortable with undershooting 6 percent inflation target and is not aiming at 4 percent consumer price inflation by January 2016.
RBI hikes repo rate by 25 bps to 8%, keeps CRR unchanged at 4%.
Tirthankar Patnaik expects a pause in RBI‘s monetary policy on January 28 and does not see any comfort from the central bank in terms of rate actions right now.
Sajjid Z Chinoy, Asia Economics, JPMorgan says the main disinflationary force has been the cooling of vegetable prices. Retail vegetable prices have corrected by more than 30 percent and the first 10 days of January has already seen another 20 percent cooling.
RBI‘s priority now is price stability and therefore it is keeping continuous watch on inflation, C Rangarajan, Chairman, PMEAC said.
According to Leif Eskesen, market has already factored in the 25 bps repo rate hike and would be surprised if RBI either does not take any action or tightens the monetary policy aggressively.