Uncertainty is the biggest challenge right now and a lot depends on COVID-19 vaccine, said Reserve Bank of India (RBI) Governor Shaktikanta Das.
He also emphasised the need to remain watchful and see to it that the momentum in inflation does not get entrenched, given the uncertain inflation outlook.
We are more confident that yields will remain contained on the shorter end, given abundant liquidity and our view of the continuation of abundant liquidity.
The pressure on the RBI to conduct a larger quantum of OMOs is likely to rise given the huge borrowing calendar ahead.
Generally, the auto sector and related segments benefit from interest rate cut due to lower EMIs.
In the last two consecutive quarters (January - March of FY 2019-20 and April - June of FY 2020-21), the average consumer price index-based inflation breached 6 per cent. The MPC need to target inflation to keep it within 4 per cent, within a band of +/- 2 per cent
The central bank has also asked payment providers to offer an online dispute resolution mechanism to address consumer grievances.
Reserve Bank of India’s Monetary Policy Committee kept the repo rate unchanged at 4 percent and maintained the stance as accommodative.
RBI Monetary Policy LIVE Updates: The Reserve Bank of India’s Monetary Policy Committee (MPC) has kept the repo rate unchanged at 4% amidst COVID-19
RBI Governor Shaktikanta Das is expected to address the media at 12 pm on August 6.
In the last monetary policy review, the RBI had noted that inflation outlook remains “highly uncertain” and had listed factors that could pull down inflation in Q3 and Q4 of FY21.
Headline inflation breached 6 percent in June, which is beyond the comfort level of the RBI tasked with keeping inflation at 4 percent in the medium term.
As per the RBI Act 1934, the MPC is required to meet at least four times in a year.
A panel comprising RBI Governor Shaktikanta Das and Economic Affairs Secretary Tarun Bajaj are tasked with picking replacement members
The Nifty appears to have witnessed profit booking from its intraday high of 10,894, after opening gap up, as it tested its 200-day simple moving average whose value is placed at 10,885 levels
As of April 24 (the most recent data available), non-food credit growth on a y-o-y basis was at 6.5 percent on May 8, 2020, lower than 7.2 per cent on April 10, 2020.
Fixed-income mutual funds have a plethora of options for investors to suit varying risk appetite as also varying tenors.
Even if inflation is not an immediate concern, panel also wants to conserve some policy space to boost economy once normal activity resumes
Banks have been thrown open the door to borrow at around 4.4 per cent and deploy the funds at almost double the yield
In the case of other central banks which implemented OT or LTRO kind of operations, these decisions were taken by the main interest rate body.
The report titled "India: Growth and inflation targeting review", Radhika Rao, Economist at DBS Bank noted that the impact on India is felt through supply chain disruptions from China as well as regional players, who in turn are net importers from China.
Members not sure about durability of green shoots, call for structural reforms.
As the major events are already taken care of, the Street will largely be guided by global mood, which is currently highly dependent on the coronavirus outbreak, Umesh Mehta told Moneycontrol
One more rate cut will depend on how quickly inflation appears to be reverting back towards 4 percent.
In the April policy, it might have enough reasons to act and then wait some more.