The RBI is also concerned that the banks have turned to bulk deposits and certificates of deposit to mobilise funds, as retail deposits (both savings and term deposits) have become stagnant
The real pressure point in today's GDP statistics is the "agriculture & allied activities" sector that has posted a growth of just 1.2 per cent (Y-o-Y) in Q2FY24, the lowest in the past 18 quarter
Our financial system needs more time for the broad-based transmission of the past concentrated increases in the repo rate (190 basis points in just four months)
As India's early-stage recovery has been derailed by the second wave, the MPC will continue to focus on growth and maintain the status quo on policy rates and liquidity stance
The rate cut will encourage other players to follow suit. This should at least help struggling sectors like MSMEs, automobiles and housing finance, to some extent
A large body of theoretical literature and the experience of the past decades indicate that monetary policy's best contribution to economic stability is to maintain price stability
In the current scenario, is there a case for RBI to lower policy rates? Not much, as the core CPI still remains elevated around 7.9% versus 8.0% in November 13