Earlier in November, RBI Governor Sanjay Malhotra said there is scope to further reduce policy interest rates, spurring rate cut hopes. However, strong GDP numbers lowered expectations of further monetary easing.
Foreign portfolio investment inflows into emerging market economies remained strong in May and June, amid improved global risk sentiment
RBI Repo Rate News: The RBI MPC reduced the inflation projection for FY26 to 3.7 percent to 4 percent earlier. The GDP growth projection remained unchanged for FY26 at 6.5 percent.
The RBI has also reduced its repo rate by 25 bps to 6 percent.
The rate cut, the first in almost five years, comes a week after Finance Minister Nirmala Sitharaman presented the budget for FY26.
Though the central bank cut the policy repo rate, it retained the neutral stance
The board of the capital markets regulator, which met here in Mumbai today, approved a slew of changes for the SME IPO segment, which has been under the regulatory scanner for quite some time now.
The three new external members were Ram Singh, Saugata Bhattacharya, and Nagesh Kumar
In a statement, the State Bank of Pakistan (SBP) said that its Monetary Policy Committee (MPC) had met earlier on Monday and reviewed the current economic developments, highlighting 'better than anticipated' decline in inflation for May
OMO sales simply put mean the RBI would look to sell bonds and absorb rupee liquidity from the system.
The MPC chose to keep the rates unchanged in the meeting but said it would act if the situation warranted so.
The MPC decision to pause is a bet on lower global growth and inflation
The central bank has increased its policy rate by 250 bps since May last year to tame inflation.
Under the rule, the Monetary policy committee (MPC) needs to keep inflation in a 2% to 6% band with a target on 4%.
RBI will take into consideration the impact of falling crude oil prices, amount of non-USD-based crude oil and other commodities India may import, and other ways of attracting dollar inflows via NRI remittances, while deciding the quantum of rate hike. However, it will be less than the US.
India’s CAD to widen to 3.1 percent of GDP and Balance of Payment deficit of around $65-70 billion in FY23, implying that the RBI would remain cautious on the external front
In his comments in the MPC minutes, Varma had said the logic of a 40 bps rate cut was not clear to him. He says he believes a decisive rate action can subdue the unpleasant inflationary episode we are witnessing currently, and bring inflation down to target.
The May 4 announcement was perplexing also against the backdrop of the fact that the same MPC had won plaudits in 2020 for its effective communication and management of the markets’ ability to price in forward expectations.
Tackling inflation risks is now front and centre and the RBI is expected to raise the policy rate by at least 50 bps in the June policy meeting
The rate-setting panel has maintained key lending rates for the ninth consecutive policy meeting
We are all agog to know whether Jayanth Varma’s question will be answered at Jackson Hole
Interest rates are likely to remain low for some more time and hence rate-sensitive sectors such as banks, real estate, NBFCs and automobiles will remain in focus.
Companies that are likely to benefit the most are the ones which are high debt companies, housing finance companies, as well as realty stocks, suggest experts.
We anticipate MPC to reduce repo rate by 25 bps in the December 2019 policy review to support economic growth, looking through the vegetable price-led uptick in the CPI inflation in October 2019.
The monetary policy committee, as expected, cut rates for the fifth consecutive time, but the quantum was below market expectations.