Monetary policy highlights: Growth not at pre-pandemic level yet, says RBI

RBI Monetary policy highlights: RBI announcement comes against the backdrop of Covid-19 infections receding in recent days and the economy stablising. Stay tuned for all the LIVE updates

10:02 AM

RBI Monetary policy LIVE: Shaktikanta Das' address begins

RBI Monetary policy LIVE: Shaktikanta Das' address begins

9:56 AM

RBI Monetary policy LIVE updates: RBI’s GDP growth outlook for FY22 may be revised upward from 9.5%

Secondary market operations i.e., GSAP and OMOs, to anchor bond yields to continue but the scale of purchase could be lower. This will in a way signal the beginning of the end of the easy liquidity situation but will be safely worded so as not to upset the market. The RBI’s GDP growth outlook for FY22 may be revised upward from 9.5%. CARE Ratings

9:53 AM

RBI Monetary policy LIVE updates: Repo rate cut unlikely for 8th straight time

RBI Governor Shaktikanta Das in the previous MPC meet decided to keep the repo rate unchanged and continue with the accommodative stance as long as necessary to support growth. Since March 2020, RBI has slashed repo rates to a record low of 4 per cent through two rate cuts of 75 bps in March 2020 and 40 bps in May 2020.

9:49 AM

RBI Monetary policy LIVE: Sensex gains 250 pts, Nifty above 17,850 ahead of MPC outcome

The benchmark indices kicked off Friday's session on a firm note ahead of the RBI policy outcome later today. Hopes of strong start to earnings season and firm global cues also buoyed sentiments. The BSE Sensex was up 261 points at 59,917 while the NSE Nifty gained 92 points to trade at 17,882. Read on...

9:37 AM

Oil price, Moody's improved outlook, low interest rates: Tough call for RBI

Petroleum and natural gas minister Hardeep Singh Puri cannot be faulted if he has set the number of Prince Abdul Aziz bin Salman Al Saud, Minister of Energy of Saudi Arabia on his speed dial. Since July, when Puri took over the portfolio, he has spoken twice with the Kingdom.

 

With the benchmark Brent crude price at over $82 a barrel, coming uncomfortably close to the century mark, Puri may need to pick up his phone for the third time. If he has some good news to share, it will be listened to eagerly by the Reserve Bank of India pundits, who will announce their decision on interest rates on Friday. They have got one piece of good news already, with Moody’s this week improving India’s outlook to stable from negative.

 

Oil, as a percentage of all imports by India, had peaked at 25 per cent in FY20. It is already 22.5 per cent in this financial year and those have uncomfortable implications for the economy, especially rupee. Read on...

9:24 AM

RBI Monetary policy LIVE updates: RBI to keep key interest rates unchanged, says HDFC Bank chief economist

The Reserve Bank is likely to leave the key interest rates unchanged at its fourth bi-monthly policy review, given the fast rising risks to growth from external sources and comforting developments on the inflation front, according to HDFC Bank Chief Economist Abheek Barua.

 

The RBI's rate-setting panel MPC started its three-day deliberations on Wednesday.

 

The central bank will announce the fourth bimonthly monetary policy review on Friday amid inflation remaining above its target for two months in row. Read on...

9:14 AM

RBI Monetary policy LIVE updates: A policy hold and a hawkish commentary

Saugata Bhattacharya writes, we expect that the MPC and RBI will hold key policy rates on Friday. The communication, though, is likely to be hawkish, preparing markets for an inevitable start of formal normalisation, which is now consistent with India’s growth-inflation dynamics.

 

The RBI is likely to maintain its 9.5% FY22 growth forecast, but there are downside risks, given rising supply-oriented disruptions, and receding but existent Covid flare-ups. There might be a minor downward revision of the earlier 5.7% CPI inflation forecast, with upside risks.

 

Fiscal interventions are needed to boost demand and induce durable growth. The role of monetary policy will now largely be smoothening of financial sector volatility arising largely from the imminent normalisation steps of global central banks, and flanking support to maintain financial intermediaries’ stability while incentivising credit growth.

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9:01 AM

RBI Monetary policy LIVE updates: Macro signs you need to know about

Activity in India’s services signaled expansion for a second straight month as the country eased restrictions amid a decline in virus cases. The IHS Markit India Services Purchasing Managers’ Index eased to 55.2 last month, from 56.7 in August, the second month in a row above the 50 threshold between expansion and contraction. A sustained expansion in the sector that makes up more than half of India’s economy bolsters expectations that the nation could grow at the quickest pace among major economies this year.

8:33 AM

RBI Monetary policy LIVE updates: Third wave

Ahead of the festive season, the Centre has struck a note of caution and said five states have been reporting a weekly positivity rate of over 5%. Mizoram has been reporting the highest weekly positivity rate of 21.64%, followed by Kerala (13.72%), Sikkim (12.76%), Manipur (7.5%) and Meghalaya (5.84%).

8:25 AM

RBI Monetary policy LIVE updates: Are Indian stock markets already pricing in the outcome of the RBI policy?

The three-day meeting of the Monetary Policy Committee (MPC) is already underway, and RBI Governor Shaktikanta Das is scheduled to announce the outcome on Friday, October 8th.
 

A Business Standard policy poll of 14 leading economists and market participants has suggested that the central bank might maintain the status quo on rates and also the ‘accommodative’ stance. But hints on policy normalisation, starting with the removal of excess liquidity, will also be watched.
 

At present the repo rate stands at 4%, reverse repo rate at 3.35%, and the cash reserve ratio at 4%. Read on...

8:17 AM

Podcast | What does RBI ex-Guv Subbarao think of India's $5-trn economy goal?

In an exclusive interview with Business Standard, former Reserve Bank Governor D Subbarao explained why doubling the economy in 4 years might be too ambitious. Listen in here

8:11 AM

RBI Monetary policy LIVE updates: Key terms to understand

What is repo rate?

Repo rate is the rate at which the central bank of a country (Reserve Bank of India in case of India) lends money to commercial banks in the event of any shortfall of funds. Repo rate is used by monetary authorities to control inflation.

What is G-SAP

The G-Sec Acquisition Programme (G-SAP) is basically an unconditional and a structured Open Market Operation (OMO), of a much larger scale and size.

Objective: To achieve a stable and orderly evolution of the yield curve along with management of liquidity in the economy.

8:01 AM

RBI Monetary policy LIVE updates: What to expect from the Governor's announcements

Rates likely to remain unchanged

 

Optimism on growth

 

Roadmap on liquidity management

8:00 AM

RBI Monetary policy LIVE updates: Current account surplus

The current account, the broadest measure of overseas trade, was in a surplus of $6.5 billion, or 0.9% of gross domestic product, in the three months ended June. The account was in a deficit of $8.1 billion in the January to March period, while it was in a surplus $19 billion, or 3.7% of GDP, in the comparable year-ago period.

7:58 AM

RBI Monetary policy LIVE updates: Fitch cuts GDP growth projections to 8.7% for FY22 from 10% earlier

Fitch Ratings has cut economic growth projections for India to 8.7 per cent for the current financial year from earlier forecast of 10 per cent due to the impact of second Covid wave.

 

It expected the Reserve Bank of India's monetary policy committee (MPC) to hold the policy rate until the next financial year as inflation would moderate. MPC would announce its decision on Friday.

 

The growth rate was lowered even as the rating agency said high frequency indicators point to a strong rebound in the second quarter of 2021-22 as business activity has again returned to pre-pandemic levels. Read on...