By holding rates, the RBI has effectively kept its options open to respond should tariff disruptions persist and pose downside risks to growth
RBI faces a policy test: lower inflation, higher growth forecasts. Markets await dovish signals beyond rate action in October policy.
The Reserve Bank of India’s Monetary Policy Committee (MPC) decision is shaping up to be a close call, with economists divided between a rate cut and a pause amid ongoing growth concerns. SBI Research, in its latest report, noted there is merit in a rate cut at the upcoming policy but stressed it would require careful communication, as the threshold for easing has become higher post-June. The report suggested a 25 basis point cut would be most appropriate. On the other hand, several bankers have ruled out an immediate cut, though they still expect one more reduction during this fiscal. If the RBI holds rates, it would mark the second consecutive pause after August. Since February, the central bank has already lowered the repo rate by 100 basis points before opting to hold in the last policy. Catch Moneycontrol’s Nandita Khemka in conversation with CNBC-TV18’s Latha Venkatesh as they decode what to expect from this week’s policy outcome.
The MPC would like to assess how India’s ongoing trade tension with the US evolves
RBI Governor Sanjay Malhotra said the CRR cut served two objectives, one being to provide liquidity, and the second objective is that also reduce the cost of funding for the banks.
RBI MPC Meet: India’s annual retail inflation had eased to 3.16% in April from 3.34% in March.
A rate cut effectively reduces home loan EMIs for customers, which in turn boosts housing demand.
Malhotra said that exports are likely to be weighed down by the 'evolving global economic landscape', which appears to be 'uncertain at the current juncture'
Malhotra also said the recent tariffs announced by US President Donald Trump has dampened the global sentiment and fueled uncertainty
The new-look MPC left the repo rate unchanged at 6.5 percent for a tenth time but changed the stance to 'neutral'
A change in stance during April could be a precursor to a probable change in policy rates during June or August, said Deepak Jasani, Head of Retail Research at HDFC Securities
The six-member monetary policy committee kept repo rates unchanged at 6.5 percent in the December meeting
The RBI remains 'watchful' of emerging risks as it reiterates commitment to maintain price stability and providing ample liquidity for economic growth, analysts says
RBI MPC Meet 2023 Highlights: Witnessing a surprise move, the Monetary Policy Committee of RBI decided to pause the key repo rate, and it thus remains unchanged at 6.5 per cent.
The review by the six-member Monetary Policy Committee led by Governor Shaktikanta Das will indicate the course RBI will adopt in FY24 as it seeks to strengthen medium-term growth prospects and curb inflation, while battling against global headwinds.
RBI Monetary Policy 2023: February 8 monetary policy is seen as crucial as it will be RBI's first policy stance for calendar year 2023 and comes exactly one week after Finance Minister Nirmala Sitharaman unveiled the Union Budget 2023-24
The six-member monetary policy committee raised the key lending repo rate to 6.25 percent in a majority decision. Five of the six members voted in favour of the increase
The central banker estimated growth for the second quarter of FY23 at 6.3 percent (versus 6.2 per cent earlier)
RBI Monetary Policy Highlights: This has taken the repo rate, at which the RBI lends short-term funds to banks, to 5.90 per cent – the highest level since April 2019 – from 5.40 per cent
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.
RBI Monetary Policy Highlights: The central bank raised the repo rate to above pre-pandemic level and the MPC is focused on withdrawal of accommodation.
All but six of 50 respondents polled March 29-April 5 forecast no repo rate change on Friday. Thirty-two expected rates to still be unchanged by end-June.
The RBI estimates headline retail inflation to average 4.5 percent in financial year 2023, compared to forecasts of 5 percent or above by private economists. Moneycontrol dissects the likely reasons for the central bank’s sanguinity.
RBI Monetary Policy | GDP expected to grow 17.2% in Q1, 7% in Q2, 4.3% in the third quarter, and 4.5% in Q4 of FY23
A daily round-up of the most interesting articles to help jump-start the day.