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Chennai, With the <keyword id="19899810" type="General" weightage="20" keywordseo="reserve-bank-of-india" source="keywords">Reserve Bank of India</keyword>'s (<keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword>) Monetary Policy Committee (MPC) deciding to retain the repo rate at 6.5 per cent, economists are of the view that a rate cut may not happen any time soon or at least for next six months, said senior economists. In a 5:1 decision, the MPC which met on February 6-8, decided to hold the repo rate -- the rate at which the RBI lends to banks -- at 6.5 per cent. The RBI MPC also decided not to change its stance to 'neutral' from 'withdrawal of accommodation'. "It was no surprise that RBI MPC decided to keep the status quo on the interest rates for the sixth consecutive time. However, RBI continued to sound hawkish as against the market expectations and has not provided any indication of the timing of the change in monetary stance from withdrawal of accommodation," said <keyword id="20504468" type="General" weightage="20" keywordseo="suman-chowdhury" source="keywords">Suman Chowdhury</keyword>, Chief Economist and Head - Research, Acuite Ratings &amp; Research. "Given the tone of the MPC statement and the expectation of growth buoyancy, we believe that the likelihood of any rate cut by RBI has significantly reduced over the next six months," Chowdhury added. The RBI MPC will not cut the repo rate ahead of the US Federal Reserve, said Madhavi Arora, Lead Economist, Emkay Global Financial Services. "We understand that shifting debates on global narratives requires the RBI to be flexible as well. We have long maintained that the RBI's policy has been somewhat pegged to the Fed, specifically in the last two years, even as it formally targeted inflation. The swift turn of tone and action pivots of the RBI in the last two years have been influenced purely by global narrative. We do not see RBI preceding the Fed in rate cuts," Arora said. Predicting that RBI will remain cautious owing to high food inflation, CARE Ratings's Chief Economist Rajani Sinha said: "Healthy economic growth gives room to the Central Bank to maintain status quo for some more time." "However, in the second half of the year, as domestic inflationary concerns recede and the US Fed starts cutting rates, we can expect a shallow rate cut by RBI. On the liquidity front, RBI will continue to intervene through appropriate tools as required," Sinha said. <keyword id="20504469" type="General" weightage="20" keywordseo="sujan-hajra" source="keywords">Sujan Hajra</keyword>, Chief Economist &amp; Executive Director, Anand Rathi Shares and Stock Brokers, was also of view that rate cut may not happen any soon and RBI will be on wait and watch mode. "With RBI's inflation projection of 4.5% for FY25, any expectations of cuts coming in the current year become unlikely. We think the progress in food prices will be the key monitorable for RBI's tone in the upcoming policy. Like other central banks, higher growth for the current and next year gives RBI more headroom to be on a wait-and-watch mode," Hajra said. As to the 7% economic growth rate for FY25 stated by RBI Governor <keyword id="19913110" type="General" weightage="20" keywordseo="shaktikanta-das" source="keywords">Shaktikanta Das</keyword>, Chowdhury said: "They have significantly upgraded their growth prospects for the next fiscal to 7.0%, reflecting that there are minimal concerns on economic growth at this time." "RBI's assessment on global growth also appears to be positive versus last year and it also believes that central banks are unlikely to resort to a pivot within a short period. Our outlook on the domestic growth prospects are moderate with a base forecast of 6.3% for FY25, given the visible weakness in the private consumption growth which is estimated at 4.4% in FY24 in the NSO estimates," Chowdhury said. "On the inflation front, the base forecast for headline CPI in FY25 is set at 4.5% which in our opinion has significant upside risks if the growth really maintains such a high level of momentum and if there are even moderate risks in the monsoon behavior," Chowdhury added.

RBI may not cut repo rate any soon or for six months: Economists

Will there be unanimity amongst the members of the Reserve Bank of India's (<keyword id="30067" type="General" weightage="20" keywordseo="RBI" source="Orion">RBI</keyword>) <keyword id="6375120" type="General" weightage="20" keywordseo="Monetary-Policy-Committee" source="Orion">Monetary Policy Committee</keyword> (MPC) on the decisions to be taken at their <keyword id="15379699" type="General" weightage="20" keywordseo="November-3-meeting" source="Orion">November 3 meeting</keyword> is the question that pops up. The reason being that at the MPC meeting held in September, one member voted against the resolution hiking the repo rate by 50 basis points to 5.90 per cent. And in the August meeting too there were differences of views on the resolution that was passed. "Even at the upcoming meeting each one will have a view which will be considered by the RBI is what I believe. That will be put in the letter to the Central Government," a senior economist told IANS preferring anonymity. The RBI has scheduled the November 3 meeting of MPC under Section 45ZN of the RBI Act. As per the said Section, when the RBI fails to meet the inflation target, it shall send a report to the Central government listing: (a) the reasons for failure to achieve the inflation target; (b) remedial actions proposed to be taken by it; and (c) an estimate of the time-period within which the inflation target shall be achieved pursuant to timely implementation of proposed remedial actions. The MPC at its upcoming meeting will discuss what it would tell the Centre as to why it was not able to restrain the inflation. The RBI may also sound out the Central government as to the course of inflation as well as the reasons as to why it may be at the elevated levels. In India, the retail inflation rose to 7.41 per cent in September. At the MPC meeting held in September, Dr. Ashima Goyal voted against the resolution to hike the repo rate by 50 basis points to 5.90 per cent. Goyal was for a hike of 35 basis points and explaining his reasons voted against the resolution. However, the resolution was passed by a 5:1 majority. At the same meeting, another member Prof. Jayanth R. Varma voted against the second part of the resolution on the withdrawal of accommodation to ensure inflation remains within the target. Varma said the MPC should now pause rather than focus on further tightening . On the issue of upward rate revision, he was for upward revision by 60 basis points instead of 50 basis points that was proposed. As the difference between the two was only marginal Varma voted in favour. RBI Governor Shaktikanta Das had said the communication with the central government is a privileged one and it will not be made public by the Bank. However as per Section 45ZL of the RBI Act, the minutes of the MPC meeting has to be published. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/global-smartphone-market-sinks-to-lowest-q3-level-since-2014/articleshow/95163037.cms" style="">Global smartphone market sinks to lowest Q3 level since 2014</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/rbi-can-argue-its-case-on-inflation-control-say-experts/articleshow/95158091.cms" style="">RBI can argue its case on inflation control say experts</a>

Will the views of RBI MPC members converge or diverge at Nov 3 meeting?

Apart from the decision on the repo rate hike by the Reserve Bank of India's (<keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword>) Monetary Policy Committee (<keyword id="6369693" type="General" weightage="20" keywordseo="mpc" source="Orion">MPC</keyword>) at its upcoming meeting, one can also expect few more things post the discussions. Economic experts expect the <keyword id="15698737" type="General" weightage="20" keywordseo="mpc-to-hike-the-repo-rate" source="Orion">MPC to hike the repo rate</keyword> by 25-35 basis points (bps) with industry lobby body ASSOCHAM also urging the central bank to do the same. Further it will also be interesting to see whether there will be unanimity amongst the members of the MPC on the decisions taken at the ensuing meeting. Post MPC meeting, the RBI Governor Shaktikanta Das is expected to share what the bank has written to the central government as to the reasons for not controlling the inflation and the steps that are being taken to reign in the same. The MPC had met on November 3, to discuss what it would tell the central government on the reasons why it was not able to restrain the inflation. As per the Section 45ZN of the RBI Act, when the central bank fails to meet the inflation target, it shall send a report to the Central government listing: the reasons for failure to achieve the inflation target; remedial actions proposed to be taken by it; and an estimate of the time-period within which the inflation target shall be achieved pursuant to timely implementation of proposed remedial actions. The proceedings of the said MPC meeting have not been made public even though the law provides to the contrary. As per section 45ZK, the RBI shall publish, after the conclusion of every meeting of MPC, the resolution adopted by the said Committee. Further, as per the Section 45ZL of the RBI Act, the minutes of the MPC meeting has to be published on the 14th day after every meeting including: the resolution adopted at the meeting of the MPC; the vote of each member of the MPC, ascribed to such member, on resolutions adopted in the said meeting; and the statement of each member of the MPC under sub-section (11) of Section 45ZL on the resolutions adopted in the said meeting. On the issue of unanimity amongst the MPC members, at the September MPC meeting, Dr. Ashima Goyal voted against the resolution to hike the repo rate by 50 basis points to 5.90 per cent. Goyal was for a hike of 35 basis points and explaining his reasons voted against the resolution. However, the resolution was passed by a 5:1 majority. In India, the retail inflation rose to 7.41 per cent in September. At the same meeting, another member Prof. Jayanth R. Varma voted against the second part of the resolution on the withdrawal of accommodation to ensure inflation remains within the target. Varma said the MPC should now pause rather than focus on further tightening. On the issue of upward rate revision, he was for upward revision by 60 basis points instead of 50 basis points that was proposed. As the difference between the two was only marginal Varma voted in favour. Be that as it may, the expectation of the MPC meeting is that the repo rate hike will be a moderate one and range between 25-35 bps. The RBI has hiked the repo rate by 190 bps from four per cent to 5.90 per cent. Now MPC will take into account the gross domestic product (GDP) growth estimates, the foodgrain production estimates, inflation projection, global economic activity and other factors. "The RBI will be presenting the monetary policy against the backdro p of GDP growth slowing down as well as inflation being high above six per cent," Madan Sabnavis, Chief Economist, Bank of Baroda said. According to him, the MPC will continue with rate hikes this time though the magnitude will be lower - probably 25-35 bps, "More specifically we do believe that the terminal repo rate for th e financial year will be 6.5 per cent, which means there will be one more rate hike in February. It is unlikely to change the stance and the withdrawal of liquidity will continue," he added. "We expect a 35 bps rate hike in the upcoming meeting. The Consumer Price Index (CPI) inflation is likely to moderate further in the coming months and slip below six per cent by the end of the fiscal year," Rajani Sinha, Chief Economist, CARE Ratings told IANS. She also said the Wholesale Price Index (WPI) has also fallen sharply from 16 per cent in May/June to around eight per cent. "The fall in global commodity prices comes as a big relief. However, the concern is that core inflation in India still remains high above six per cent. Food inflation and specifically cereal inflation is also high," Sinha pointed out. This, in turn, will put upward pressure on household inflationary expectations which is already at a high of around 10 per cent. Hence, while there is some reprieve on the inflation front, RBI would remain vigilant, she added. On the growth front, high frequency economic indicators like auto sales, GST collection, e-way bill, PMI continue to indicate healthy recovery. However, some consumption indicators like IIP consumer durables and non-durables remain weak, Sinha said. Moreover, external demand is weakening as the global economy slows down, Sinha said. According to K. Joseph Thomas, Head Research, Emkay Wealth, as far as interest rates go, the trajectory of domestic inflation is of prime importance. "The pressure seems to be easing on the price level, but the comfor t that can be drawn from fuel prices is far from real. The upside risks in fuel prices continue to be a concern," he said. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/investment-intent-of-10-5-lakh-crore-received-at-odisha-biz-summit/articleshow/95974094.cms" style="">Investment intent of ₹10.5 lakh crore received at Odisha biz summit</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="http://businessinsider.in/stock-market/news/indian-markets-open-the-week-on-a-mixed-note-sbi-maruti-suzuki-inox-green-energy-among-stocks-in-focus/articleshow/95991254.cms" style="">Indian markets open the week on a mixed note – SBI, Maruti Suzuki, Inox Green Energy among stocks in focus</a>

RBI's MPC meeting could throw up a lot more than just a rate hike, say experts

Mumbai, Mar 27 () Following are the highlights of the seventh bi-monthly monetary policy statement for 2019-20 by the RBI amid COVID-19 pandemic: * Monetary Policy Committee (MPC) advances meeting scheduled for Apr 1-3 * Repo rate slashed by 75 basis points to 4.4% * Reverse repo rate cut sharply by 90 basis points to 4% making unattractive for banks to deposit funds * MPC votes unanimously for a reduction in the policy repo rate * MPC decides to continue with the accommodative stance as long as it is necessary * Committee votes 4:2 in favour of rate cut; unanimous on change in stance * 2 MPC members Chetan Ghate and Pami Dua voted for a 50 bps rate cut * Several measures taken to infuse liquidity of about Rs 3.74 lakh crore into the financial system * RBI to undertake repo operation to infuse Rs 1 lakh crore * Cash Reserve Ratio (CRR) cut sharply by 100 bps to 3 per cent releasing Rs 1.37 lakh cr into the system * RBI assures to work in mission mode, monitoring the evolving financial market and macroeconomic conditions * MPC for the first time advances meeting date and refrains from giving next meeting date in the wake of evolving situation * GDP growth rate of 5% for 2019-20 at risk from the impact of pandemic * Global slowdown to deepen with adverse implication for India; crude oil slump upside for country * Upside growth impulses to emanate from monetary, fiscal measures and the early containment of COVID-19 * Food prices to soften further on back of record foodgrain production * MPC refrains from giving out growth, inflation outlook for coming fiscal on uncertain outlook * RBI permits all lending institutions to allow 3-month moratorium on payment of installments on term loans * Moratorium on term loan, deferring of interest on working capital will not classify as default * RBI urges banks and other financial institutions to do all they can to keep credit flowing * All instruments - conventional and unconventional - on table to support financial stability and revive growth * RBI assures that banking system in India safe; deposits safe in private bank; public should not resort to panic withdrawal * RBI says macroeconomic fundamental stronger than that in aftermath of 2008 financial market crisis * Last tranche of the capital conservation buffer (CCB) for banks deferred for 6 months to Sep * The minutes of the MPC to be published by April 13. DP BAL ANSANSANS

Highlights of RBI's monetary policy statement

Mumbai, Mar 27 () Following are the highlights of the seventh bi-monthly monetary statement for 2019-20 by the RBI amid COVID-19 pandemic: * Monetary Policy Committee (MPC) advances meeting scheduled for Apr 1-3 * Repo rate slashed by 75 basis points to 4.4% * Reverse repo rate cut sharply by 90 basis points to 4% making unattractive for banks to deposit funds * MPC votes unanimously for a reduction in the policy repo rate * MPC decides to continue with the accommodative stance as long as it is necessary * Committee votes 4:2 in favour of rate cut; unanimous on change in stance * 2 MPC members Chetan Ghate and Pami Dua voted for a 50 bps rate cut * Several measures taken to infuse liquidity of about Rs 3.74 lakh crore into the financial system * RBI to undertake repo operation to infuse Rs 1 lakh crore * Cash Reserve Ratio (CRR) cut sharply by 100 bps to 3 per cent releasing Rs 1.37 lakh cr into the system * RBI assures to work in mission mode, monitoring the evolving financial market and macroeconomic conditions * MPC for the first time advances meeting date and refrains from giving next meeting date in the wake of evolving situation * GDP growth rate of 5% for 2019-20 at risk from the impact of pandemic * Global slowdown to deepen with adverse implication for India; crude oil slump upside for country * Upside growth impulses to emanate from monetary, fiscal measures and the early containment of COVID-19 * Food prices to soften further on back of record foodgrain production * MPC refrains from giving out growth, inflation outlook for coming fiscal on uncertain outlook * RBI permits all lending institutions to allow 3-month moratorium on payment of installments on term loans * Moratorium on term loan, deferring of interest on working capital will not classify as default * RBI urges banks and other financial institutions to do all they can to keep credit flowing * All instruments - conventional and unconventional - on table to support financial stability and revive growth * RBI assures that banking system in India safe; deposits safe in private bank; public should not resort to panic withdrawal * RBI says macroeconomic fundamental stronger than that in aftermath of 2008 financial market crisis * Last tranche of the capital conservation buffer (CCB) for banks deferred for 6 months to Sep * The minutes of the MPC to be published by April 13. DP BAL ANSANS

Highlights of RBI's monetary statement

Mumbai, Jan 29 () The Reserve Bank of India (RBI) on Wednesday appointed its Executive Director Janak Raj as member of the Monetary Policy Committee (MPC), the highest interest rate setting body.
 Raj replaces M D Patra, who was recently elevated as Deputy Governor of the RBI.
 The decision to appoint Janak Raj was taken at the 581st meeting of the central board here on Wednesday.
 "The Board nominated Dr Janak Raj, Executive Director on the Monetary Policy Committee as an ex officio member," the RBI said in a statement.
 The government had in 2016 constituted MPC to set the benchmark interest rate.
 The MPC is headed by the RBI Governor. Of the six members, three are nominated by the government, while the remaining three are from the RBI (including the Governor).
 The Monetary Policy Committee takes decisions based on majority vote. Each member has one vote but the RBI Governor get a casting vote in case of a tie. DP ABM

RBI appoints ED Janak Raj as member of MPC

Finance Minister <a href="http://www.businessinsider.in/FM-Arun-Jaitley-says-the-Govt-has-budgetary-constraints-about-pumping-in-cash-to-recapitalize-Indian-banks/articleshow/54362731.cms">Arun Jaitley </a>hopes that the Reserve Bank (RBI) will keep in mind the decline in retail inflation while deciding on interest rates at its policy review meeting on October 4. 
 
"I expect when the policy review takes place next month then <a href="http://www.businessinsider.in/FM-Arun-Jaitley-says-the-Govt-has-budgetary-constraints-about-pumping-in-cash-to-recapitalize-Indian-banks/articleshow/54362731.cms">RBI</a>, and hopefully if <a href="http://www.businessinsider.in/FM-Arun-Jaitley-says-the-Govt-has-budgetary-constraints-about-pumping-in-cash-to-recapitalize-Indian-banks/articleshow/54362731.cms">MPC</a> is constituted by then, they will collectively keep all these factors in mind," he told the media when asked if declining inflation leaves room for rate cut. 
 
In its monetary policy review last month, RBI maintained status quo on key rates citing upside risks to 5 % inflation target for March 2017. Retail inflation eased to a five-month low of 5.05 % in August. 
 
The cooling of retail inflation and 2.4% contraction of factory output in July has revived hopes for a rate cut by RBI in its next policy meet on October 4 to boost growth. 
 
Moving towards the new regime, the government had in July notified 4 % <a href="http://www.businessinsider.in/FM-Arun-Jaitley-says-the-Govt-has-budgetary-constraints-about-pumping-in-cash-to-recapitalize-Indian-banks/articleshow/54362731.cms">inflation</a> target for the next five years, based on which the monetary policy committee (MPC) would take its decisions going forward, reports the agency. 
 
It also provides for a margin of plus or minus 2 per cent in this target, thus fixing the upper tolerance level at 6 % till 2021. MPC will set interest rates by majority, with a casting vote for the central bank governor in the event of a tie. Out of six members of MPC, three will be from RBI - the Governor, who will be the ex-officio Chairperson, a deputy governor and an executive director. 
 
The other three members will be appointed by the central government on the recommendations of a search-cum-selection committee, headed by the Cabinet Secretary. <a href="http://www.businessinsider.in/FM-Arun-Jaitley-says-the-Govt-has-budgetary-constraints-about-pumping-in-cash-to-recapitalize-Indian-banks/articleshow/54362731.cms">Government</a> is yet to name its nominees on MPC.

Jaitley hopes that RBI will consider decline in retail inflation while deciding on interest rates

Mumbai, May 22 () Following are the highlights of RBI Governor Shaktikanta Das' statement and resolution of the Monetary Policy Committee (MPC): * RBI cuts repo rate by 40 bps to 4 pc * Reverse repo rate reduced to 3.35 pc * Second sharp reduction in key policy rates in 2 months * RBI advances MPC meeting to take key decisions * RBI Governor said it is in growth outlook that the MPC judged the risks to be gravest * GDP growth in FY21 estimated to remain in negative territory, with some pick-up in H2 * Top 6 industrialised states accounting for about 60 pc of industrial output largely in red/orange zones * High frequency indicators point to collapse in demand beginning in March * MPC opined macroeconomic impact of COVID-19 is turning out to be more severe than initially anticipated * Various sectors of economy are experiencing acute stress * Economic activity other than agriculture likely to remain depressed in Q1 due to lockdown * Inflation outlook highly uncertain * Moratorium on term loan instalments extended by another 3 months till Aug 31, 2020 * Lending institutions permitted to allow deferment of interest on working capital facilities till Aug 31 * RBI decides to extend time for completion of remittances against imports from 6 months to 12 months for imports made before July 31 * RBI extends a line of credit of Rs 15,000 crore to the EXIM Bank * Maximum permissible period of export credit increased to 15 months from 12 months * RBI announces measures to improve functioning of markets and market participants * Forex reserves increase by USD 9.2 bn in 2020-21 (up to May 15) to USD 487 bn. NKD ANS ANS

You Searched For "RBI MPC" and got 8 results

RBI may not cut repo rate any soon or for six months: Economists

IANS

Will the views of RBI MPC members converge or diverge at Nov 3 meeting?

IANS

RBI's MPC meeting could throw up a lot more than just a rate hike, say experts

IANS

Highlights of RBI's monetary policy statement

PTI

Highlights of RBI's monetary statement

PTI

RBI appoints ED Janak Raj as member of MPC

PTI

Jaitley hopes that RBI will consider decline in retail inflation while deciding on interest rates

BI India Bureau

Highlights of RBI's monetary policy statement

PTI

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