RBI MPC highlights: 2nd wave has moderated; expect demand to pick up

RBI Monetary policy highlights: Governor Shaktikanta Das announced decisions on key rates after the MPC concluded its three-day meeting today. Stay tuned for all the LIVE updates

10:12 AM

RBI Monetary policy LIVE: Rural demand expected to remain robust given the expectation of a good monsoon

RBI Monetary policy LIVE: Rural demand expected to remain robust given the expectation of a good monsoon, says guv Shaktikanta Das

10:11 AM

India's real GDP growth is projected at 9.5% in FY22: RBI governor Shaktikanta Das

India's real GDP growth is projected at 9.5% in FY22: RBI governor Shaktikanta Das

10:10 AM

RBI Monetary policy LIVE updates: Reverse repo rate retained at 3.35%

MSC, Bank rate unchanged at 4.25%

10:09 AM

RBI Monetary policy LIVE: Smaller towns and cities more affected by Covid second wave

RBI to maintain accommodative stance as long as necessary: Governor Das

10:08 AM

Covid-19 second wave a cause for concern for the economy: RBI governor Shaktikanta Das

NSO data released on May 31 pegged India's GDP contraction in FY21 at 3%

 

10:07 AM

RBI monetary policy LIVE: RBI maintains accommodative stance for now

10:05 AM

RBI Monetary policy LIVE updates: RBI keeps repo rate unchanged at 4%

RBI Monetary policy LIVE updates: RBI keeps repo rate unchanged at 4%

9:59 AM

RBI Monetary Policy LIVE: If the rates are left unchanged, this would be the sixth consecutive such action

RBI Monetary Policy LIVE: If the rates are left unchanged, this would be the sixth consecutive such action.

9:54 AM

RBI Monetary Policy LIVE: Key rates

- Repo rate (lending rate) is likely to continue at 4 per cent and reverse repo rate (RBI’s borrowing rate) at 3.35 per cent.

9:24 AM

RBI monetary policy: Bond market expects minimum Rs 1 trn of G-SAP in Q2

The bond market is eagerly waiting for the Reserve Bank of India (RBI) to announce how much it plans to buy in the second quarter under its government securities acquisition programme (G-SAP), and if the second tranche would bring in any conditions.

 

The central bank has plans to buy Rs 1 trillion of bonds under the G-SAP in the first quarter, of which it has already bought Rs 60,000 crore of bonds.

 

Friday’s monetary policy will be the last for the quarter, and therefore, the second quarter numbers are expected to be spelt out in the policy. Read on...

9:19 AM

RBI Monetary Policy LIVE: Another moratorium?

Bankers and borrowers policy will closely watch the to see if the central bank comes out with another round of moratorium on loan repayments like last year.

 

The RBI announced in 2020 a repayment moratorium initially for three months and extended it by another three months. The central bank also allowed lenders to invoke a standstill clause, which means classification of the asset would remain unchanged during the period of the moratorium. In other words, the lenders were allowed not to classify any loan as non-performing due to non-payment of dues.

 

“Industry officials have sought a temporary moratorium, for instance automotive dealers and real estate firms, for the duration of the state-specific lockdowns, according to the press reports. Selected banks have also reportedly sought a moratorium for 2Q21 to tide over till 3Q just as the new recast window is being invoked. Inclusion and special concessions for large and mid-tier corporates as well as affected contact intensive industries like aviation, retail sector etc., into the fresh restructuring facility, are reportedly the other demands,” Rao of DBS Bank said.

9:12 AM

RBI Monetary Policy LIVE: Bond buying

The central bank, in the April policy, had announced a bond-buying programme from the secondary market. The Government Securities Acquisition Programme (G-SAP 1.0) aimed at enabling a stable and orderly evolution of the yield curve amidst comfortable liquidity conditions, RBI Governor Shaktikanta Das had said.

 

The programme had two rounds of bond purchases for Rs 60,000 crore, out of Rs 1 trillion announced. The market expects the central bank to announce another tranche of bond buying under G-SAP 1.0 on Friday, particularly in the light of a projected fall in revenue collection from GST.

 

“For the bond markets, two rounds of bond purchases under the GSAP 1.0 for the June quarter has added to Rs 600 billion off the total Rs 1 trillion,” said Radhika Rao, economist with DBS Bank.

 

“The next GSAP tranche for the rest of 2Q21 as well as providing an indicative GSAP scale for 3Q21 might be announced this week, just as the government announced plans to increase FY22 borrowings by Rs 1.58 trillion to pay states for an anticipated shortfall in GST revenues. The central bank’s hand will cap risk-free rates at manageable levels and by extension, keep private sector borrowing costs down, by an implicit yield control strategy,” Rao said.

8:59 AM

RBI Monetary Policy LIVE: Inflation concern

RBI’s focus has been to support growth since the pandemic last year. It responded with a 75-bps reduction in the policy repo rate in March 2020, reacting days after a nationwide lockdown was announced. In May, the repo rate was reduced again--by 40 bps. Since then, the central bank has maintained a status quo on the interest rates. (1 percentage points is equal to 100 bps)

 

After averaging 6.2% in the 2020-21--which was higher by 140 bps than the previous financial year--consumer price index based inflation (CPI) pressures are again resurfacing in the economy. Rising crude oil prices, supply-side disruptions due to lockdowns and overall recovery will put pressure on inflation. RBI’s annual report six day ago said inflation remained a key concern and constrains the monetary policy to support growth. Read on...

8:51 AM

See a realistic chance for the RBI to reduce its earlier growth forecast: Yes Bank economist

Yes Bank chief economist Indranil Pan said, “We do see a realistic chance for the RBI to reduce its earlier growth forecast of 10.5% and highlight increasing risks to the downside. Further, the RBI will continue to pursue its broad intent of plugging weak spots in the economy and ensure adequate liquidity flows to various segments.”

8:47 AM

RBI Monetary Policy LIVE: Growth forecast likely to be trimmed

The market will look out for RBI’s GDP growth forecast for the financial year. In the last policy review meeting of April, GDP growth for the current financial year was projected at 10.5%. For the first quarter, it was projected at 26.2%. The prediction was before the second wave of the coronavirus pandemic that has hurt economic activity due to lockdowns by state governments. Most economists and rating agencies have trimmed their forecast following the second wave. Many see GDP growth for FY22 in single digit now, as compared to double-digit predictions made before the second wave.

 

“RBI is expected to revise growth projections downward but not significantly,” Anubhuti Sahay, head of economic research, South Asia, Standard Chartered Bank.

 

“We are at 8.5% as compared to the 10.2% projected earlier. (FY22) The RBI will possibly keep FY22 GDP growth projections between 9-9.5%,” Sahay told 'Business Standard'. Read on...