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Mumbai: The Reserve Bank is unlikely to cut the benchmark <keyword id="20071327" type="General" weightage="20" keywordseo="interest-rate" source="keywords">interest rate</keyword> in its forthcoming bi-monthly monetary policy review later in the week as <keyword id="19999652" type="General" weightage="20" keywordseo="retail-inflation" source="keywords">retail inflation</keyword> is still a cause of concern, and there is a possibility of the Middle East crisis deteriorating further, impacting crude oil and commodity prices, say experts. Earlier this month, the government reconstituted the Reserve Bank's rate-setting panel -- <keyword id="19913109" type="General" weightage="20" keywordseo="Monetary-Policy-Committee" source="keywords">Monetary Policy Committee</keyword> (MPC). The reconstituted panel, with three newly appointed external members, will commence its maiden meeting on Monday. MPC Chairman RBI Governor Shaktikanta Das will reveal the outcome of the three-day discussion on Wednesday (October 9). The <keyword id="19899810" type="General" weightage="100" keywordseo="Reserve-Bank-of-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Reserve Bank of India" meta.hostid="261" meta.entityid="Reserve Bank of India">Reserve Bank of India</keyword> (RBI) has kept the repo or short-term lending rate unchanged at 6.5 per cent since February 2023, and experts think some easing could only be possible in December. The government has tasked the central bank to ensure that Consumer Price Index (CPI) based retail inflation remains at 4 per cent with a margin of 2 per cent on either side. In the current context, experts feel that the RBI may not follow the US Federal Reserve, which lowered the benchmark rates by 50 basis points, and the central banks of some developed nations, which have reduced the interest rates. "We do not expect any change in the <keyword id="20094323" type="General" weightage="20" keywordseo="repo-rate" source="keywords">repo rate</keyword> or stance by MPC. The reason is that inflation for September and October will be above 5 per cent, and the present low inflation is due to the base effect. Besides, core inflation is inching upwards," said Madan Sabnavis, Chief Economist, Bank of Baroda. Further, the recent Iran-Israel imbroglio can intensify, and there is uncertainty here, he said. "Hence, the status quo is the most likely option even for new members. Inflation forecast may be lowered by 10-20 bps and no change in GDP forecast likely," said Sabnavis. The central bank last hiked the repo rate to 6.5 per cent in February 2023 and since then, it has held the rate at the same level. Icra Chief Economist Aditi Nayar said that given the undershooting in the initial first quarter GDP growth relative to the MPC's forecast and the likely sizeable undershooting in the second quarter CPI inflation print as well, "we believe a stance change to neutral may be appropriate in the October 2024 policy review". This could be followed by a shallow rate-cutting cycle of 25 bps each in December 2024 and February 2025, she added. "The abundant monsoon offers some insurance for crop inflation. The impact of global political developments and geopolitical uncertainty on the growth inflation dynamics remains a risk," Nayar added. An HSBC report said three developments stand out -- softer growth numbers have trickled in recently, inflation has been falling, and the external environment has moved from rate hikes to cuts. "We believe the RBI doesn't gain from waiting any longer. We think it will change its stance from a hawkish 'withdrawal of accommodation' to 'neutral' in the upcoming 9 October policy meeting, followed by repo rate cuts of 25 bps each in the December and February meetings, taking the repo rate to 6 per cent," the report said. The RBI kept the repo rate unchanged at 6.5 per cent in its August bi-monthly review amid risks from higher food inflation. This was the ninth consecutive MPC meeting, which decided to maintain the status quo on the rate front. Pradeep Aggarwal, founder and chairman, Signature Global (India) Limited, said while the real estate industry, developer community, and homebuyers are hoping for an interest rate cut in the upcoming monetary policy review, the RBI is likely to hold on to the interest rate cuts for the tenth consecutive time. "The apex bank still seems uncomfortable with the overall retail inflation scenario, particularly food inflation. As such, it is expected to maintain the status quo. The recent interest rate cut by the US Federal Reserve has ignited similar hopes even in India, but the domestic scenario is very different," he added. SBM Bank India Head Treasury Mandar Pitale believed that the MPC has persistently advocated a restrictive policy until inflation aligns durably towards the 4 per cent target. "With the unfavourable base effect taking the next couple of CPI prints near 5 per cent plus or minus, it will pose a major challenge for MPC to start easing from the October meeting," Pitale said, adding that the MPC is also expected to deliberate upon the global factors like growth-inflation behaviour in developed economies. The government has appointed Ram Singh, Saugata Bhattacharya, and Nagesh Kumar as external members of the MPC. They have replaced Ashima Goyal, Shashanka Bhide, and Jayanth R Varma. Apart from the Governor, the other internal members are the RBI Deputy Governor in charge of monetary policy Michael Debabrata Patra and the Executive Director monetary policy department of RBI Rajiv Ranjan. In an off-cycle meeting in May 2022, the MPC raised the policy rate by 40 basis points and it was followed by rate hikes of varying sizes, in the subsequent meetings till February 2023. The repo rate was raised by 250 basis points cumulatively between May 2022 and February 2023.

Status-quo on interest rate likely, say experts ahead of RBI's policy review

The <keyword id="19949639" type="General" weightage="20" keywordseo="rupee" source="keywords">rupee</keyword> consolidated in a narrow range and settled for the day lower by 1 paisa at 83.96 (provisional) against US <keyword id="19904292" type="General" weightage="20" keywordseo="dollar" source="keywords">dollar</keyword> on Thursday, after the Reserve Bank expectedly kept the benchmark interest rate and stance unchanged for the ninth straight policy meeting. Forex traders said weak domestic markets, surge in crude oil prices and foreign fund outflows weighed on the rupee. However, a decline in the US Dollar index prevented the local unit from declining sharply. At the interbank foreign exchange market, the local unit opened at 83.94 and touched an intraday low of 83.97 and a high of 83.93 against the dollar during the session. It finally settled at 83.96 (provisional) against the American currency, down 1 paisa from its previous close. On Wednesday, the rupee consolidated in a narrow range and settled for the day lower by 3 paise at 83.95 against US dollar. The local unit had slumped 37 paise to settle at an all-time low of 84.09 against the US dollar on Monday. "We expect the rupee to trade with a negative bias on selling pressure from foreign investors and weak domestic markets. Ongoing geopolitical tensions in the Middle East may also pressurise the rupee," said Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas. However, weak US dollar may support the rupee at lower levels. Any intervention by <keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords">RBI</keyword> may also support the rupee. "Traders may take cues from weekly unemployment claims data from the US. USDINR spot price is expected to trade in a range of Rs 83.75 to Rs 84.20," Choudhary said. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.12 per cent to 103.07 points. <keyword id="20025497" type="General" weightage="20" keywordseo="Brent-crude" source="keywords">Brent crude</keyword>, the global oil benchmark, was trading 0.78 per cent lower at USD 77.72 per barrel in futures trade. On the macroeconomic front, the Monetary Policy Committee (MPC) of the Reserve Bank kept the benchmark repurchase or repo rate unchanged at 6.50 per cent. Announcing the bi-monthly monetary policy review RBI Governor Shaktikanta Das said Indian rupee remained largely range-bound so far this financial year. The panel also decided to retain a policy stance at "withdrawal of accommodation" to aid MPC's focus on bringing inflation towards its 4 per cent target. The status quo by RBI comes amid varied central bank action in advanced economies. While the Bank of England reduced interest rates last week, the Bank of Japan hiked rates to their highest levels since 2008. Also, fears of a US recession have risen on the back of weak employment numbers, piling up pressure on the Federal Reserve to start cutting rates to support the economy. In the domestic equity market, the 30-share BSE Sensex fell 581.79 points, or 0.73 per cent, to close at 78,886.22 points, while the Nifty declined 180.50 points, or 0.74 per cent, to 24,117.00 points. Foreign institutional investors (FIIs) were net sellers in the capital markets on Wednesday as they offloaded shares worth Rs 3,314.76 crore, according to exchange data. SEE ALSO:<a href="https://www.businessinsider.in/business/news/ola-wants-to-re-enter-the-quick-commerce-business-to-take-on-blinkit-and-swiggy-instamart/articleshow/112364583.cms" target="_blank"></a> <a href="https://www.businessinsider.in/business/news/ola-wants-to-re-enter-the-quick-commerce-business-to-take-on-blinkit-and-swiggy-instamart/articleshow/112364583.cms" target="_blank">Ola wants to re-enter the quick commerce business to take on Blinkit and Swiggy Instamart</a><a href="https://www.businessinsider.in/finance/banks/news/rbi-mpc-meet-cheque-clearing-time-reduced-upi-limit-increased-for-tax-payment/articleshow/112366099.cms" target="_blank"></a> <a href="https://www.businessinsider.in/finance/banks/news/rbi-mpc-meet-cheque-clearing-time-reduced-upi-limit-increased-for-tax-payment/articleshow/112366099.cms" target="_blank">RBI MPC meet – Cheque clearing time reduced, UPI limit increased for tax payment</a><a href="https://www.businessinsider.in/business/auto/news/tata-curvv-ev-with-up-to-585-km-range-launched-starting-at-17-49-lakh/slidelist/112342769.cms" target="_blank"></a> <a href="https://www.businessinsider.in/business/auto/news/tata-curvv-ev-with-up-to-585-km-range-launched-starting-at-17-49-lakh/slidelist/112342769.cms" target="_blank">Tata Curvv EV with up to 585 km range launched starting at ₹17.49 lakh</a>

Rupee falls 1 paisa to close at 83.96 against US dollar

The <keyword id="19922074" type="General" weightage="20" keywordseo="Reserve-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="Reserve Bank" meta.hostid="261" meta.entityid="Reserve Bank">Reserve Bank</keyword> is expected to hold its key rates at the forthcoming <keyword id="22706079" type="General" weightage="20" keywordseo="policy-review" source="keywords">policy review</keyword>, but may sound more confident about reaching its 4% inflation objective, a foreign brokerage said on Wednesday. The rate-setting panel may prefer to stick to the 'withdrawal of accommodation' stance of the <keyword id="20104157" type="General" weightage="20" keywordseo="monetary-policy" source="keywords">monetary policy</keyword>, HSBC said in the report on the eve of the <keyword id="19899808" type="General" weightage="100" keywordseo="RBI" source="keywords">RBI</keyword> <keyword id="19918491" type="General" weightage="20" keywordseo="MPC" source="keywords">MPC</keyword>'s decision. "While it's a close call, we also think the policy stance will remain unchanged, even as the RBI sounds more confident than before about getting to its 4% <keyword id="20661141" type="General" weightage="20" keywordseo="inflation-target" source="keywords">inflation target</keyword>," it said, listing out the aspects it will watch out for in the document or the resolution. These include any softness in tone around increased confidence of getting to 4% inflation durably, or a change in growth or inflation forecasts, and, further commentary around the use of OMO (open market operations) sales to take out excess liquidity. In the background of another member dissenting at the last policy review, the brokerage said the number of MPC members calling for a rate cut or change in stance will also be watched keenly. Apart from this, it said any more colour on the plans to change regulatory requirements on the <keyword id="20479869" type="General" weightage="20" keywordseo="liquidity-coverage-ratio" source="keywords">liquidity coverage ratio</keyword>, which is reported to have a bearing on banks' profitability, will also be watched, it said. On the stance questions, there are several points in support of softening from the current "hawkish" posturing, the brokerage said, adding that there are an equal number of aspects against such a move as well. Factors such as global turmoil, improving rains, soft core inflation, weaker credit growth and fiscal consolidation support a softening of the stance, while on the other side, there are competing ones like long wait for a durable fall in food inflation, loose financial conditions, OMO sales and growth being strong on the other side, it said.

RBI to hold rates, may sound more confident of reaching inflation target, says report

Mumbai: <keyword id="19949639" type="General" weightage="100" keywordseo="rupee" source="keywords">Rupee</keyword> <keyword id="19900989" type="General" weightage="20" keywordseo="trade" source="keywords">trade</keyword>d in a narrow range in morning trade on Wednesday, as the support from positive domestic equities was negated by strengthening of the American currency in the overseas <keyword id="19913381" type="General" weightage="20" keywordseo="market" source="keywords">market</keyword>. At the interbank foreign exchange market, the local unit opened at 83.86 but soon pared the gains to trade at 83.92, unchanged from its previous close. On Tuesday, the rupee recovered from its all-time low level and settled for the day 17 paise higher at 83.92 against the US <keyword id="19904292" type="General" weightage="20" keywordseo="dollar" source="keywords">dollar</keyword>. The local unit had slumped 37 paise to settle at an all-time low of 84.09 against the US dollar on Monday. Forex traders said risk aversion in the global markets, escalation of geopolitical tensions in the Middle East and outflows by foreign investors further dented investor sentiments. " Indian rupee is expected to open at 83.91 after a fall to 83.96 on Tuesday with dollar demand gaining traction but <keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords">RBI</keyword> selling dollars to keep rupee within 84 levels," said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP. For the day the rupee looks to be in a range of 83.85 to 84.05 but all depending on the Reserve Bank, as to where it wants the rupee to be in the coming days, Bhansali added. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, gained 0.28 per cent to 103.26 points. Brent crude, the global oil benchmark, rose 0.20 per cent at USD 76.63 per barrel in futures trade. "Brent oil prices dipped to USD 76.54 per barrel as mixed reading on inventories and demand concerns over slowing economic growth and weak demand kept prices under pressure," Bhansali said. In the domestic equity market, the 30-share BSE Sensex gained 642.04 points, or 0.82 per cent, to 79,235.11 points, while the Nifty increased by 233.75 points, or 0.97 per cent, to 24,226.30 points. Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Tuesday as they offloaded shares worth Rs 3,531.24 crore, according to exchange data. Meanwhile, the Reserve Bank's rate-setting panel started its three-day deliberations for the next set of bi-monthly monetary policy on Tuesday amid expectations of no change in benchmark interest rate in view of concerns on inflation and economic growth remaining steady. The decision of the RBI Governor Shaktikanta Das-headed six-member Monetary Policy Committee (MPC) will be announced on Thursday.

Rupee trades in narrow range against US dollar in early trade

Mumbai, Equity benchmark index <keyword id="19896382" type="General" weightage="20" keywordseo="Sensex" source="keywords" topicspecial.url="https://economictimes.indiatimes.com/indices/sensex_30_companies">Sensex</keyword> registered marginal gains to hit fresh lifetime high on Friday after the Reserve Bank maintained the status quo on key <keyword id="19950650" type="General" weightage="20" keywordseo="interest-rates" source="keywords">interest rates</keyword> amid a negative trend in global markets. The six-member rate-setting panel of the Reserve Bank of India (RBI) on Friday kept the benchmark interest rates unchanged at 6.5 per cent for the seventh time in a row. It also expressed concerns over food inflation given IMD's prediction of above-normal maximum temperatures during April-June. The 30-share BSE Sensex inched up 20.59 points or 0.03 per cent to settle at a fresh record of 74,248.22. The index oscillated between the intra-day peak of 74,361.11 and the low of 73,946.92. The broader NSE <keyword id="19896381" type="General" weightage="20" keywordseo="Nifty" source="keywords" topicspecial.url="https://economictimes.indiatimes.com/indices/nifty_50_companies">Nifty</keyword> ended with a marginal loss of 0.95 points at 22,513.70. As many as 28 components of the 50-share benchmark ended in the red. "Although the RBI policy meeting unfolded as anticipated, concerns over food inflation and warnings of a heat wave tampered sentiment," said Vinod Nair, Head of Research, Geojit Financial Services. Among the Sensex constituents, 18 stocks closed in negative with UltraTech Cement, L&amp;T, Bharti Airtel, Bajaj Finance and Tech Mahindra being major laggards. Other heavyweights like Asian Paints, Maruti, Titan and JSW Steel also saw heavy selling. In contrast, Kotak Mahindra Bank, Bajaj Finserve, HDFC Bank, ITC and SBI bucked the trend and ended the session with a gain of up to 2.09 per cent. BSE largecap gained 0.15 per cent, while midcap and smallcap indices rose 0.50 per cent. Global oil benchmark Brent crude advanced 0.11 per cent to USD 90.75 a barrel. Asian markets were lower, with Japan's Nikkei 225 losing 1.96 per cent and Hang Seng of Hong Kong declining 0.01 per cent. South Koran index Kospi fell 1.01 per cent. European markets were trading in the red. Germany's DAX and London's FTSE 100 lost 1.57 per cent and 0.90 per cent, respectively, while CAC40 of France went down by 1.36 per cent. The US markets closed largely lower in the overnight trade on Thursday. "The global sentiment was dampened by the rise in oil prices and tensions in the Middle East. Investors remain attentive to upcoming US non-farm payroll and unemployment data, seeking clarity on the Federal Reserve's future rate path," Nair said. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,136.47 crore on Thursday, according to exchange data. On Thursday, the BSE benchmark Sensex surged 350.81 points or 0.47 per cent to settle at its lifetime high of 74,227.63. The NSE Nifty also hit its fresh peak of 22,514.65, gaining 80 points or 0.36 per cent.

Sensex gains marginally to scale new peak after RBI policy decision

The rupee depreciated 6 paise to 83.45 against the US dollar in early trade on Friday, as market participants remained cautious ahead of the announcement of the <keyword id="6354335" type="General" weightage="20" keywordseo="Reserve-Bank-of-India" source="Orion">Reserve Bank of India</keyword>'s rate-setting panel's decision. Forex traders said the local unit was also weighed down by a strong American currency and elevated crude oil prices. Moreover, a negative trend in domestic equities and sustained foreign fund outflows also dented investor sentiments. According to <keyword id="6515855" type="General" weightage="20" keywordseo="interbank-foreign-exchange" source="Orion">interbank foreign exchange</keyword>, the rupee opened at 83.44 against the dollar and touched a low of 83.45 in the initial trade, registering a fall of 6 paise over its previous close. On Thursday, the rupee recovered 14 paise to close at 83.39 against the US dollar. Traders said market participants are awaiting the <keyword id="30067" type="General" weightage="20" keywordseo="RBI" source="Orion">RBI</keyword> MPC policy decision for further cues. The <keyword id="19922074" type="General" weightage="20" keywordseo="reserve-bank" source="keywords">Reserve Bank</keyword>'s rate-setting panel on Wednesday started its three-day deliberations on the next set of monetary policy. The decision taken at the meeting of the Reserve Bank Governor Shaktikanta Das-headed Monetary Policy Committee (MPC) is scheduled to be announced later in the day. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was at 104.33, higher by 0.20 per cent. Brent crude futures, the global oil benchmark, rose 0.40 per cent to USD 91.01 per barrel. Forex traders said the rupee is likely to trade with a slight negative bias on the surge in crude oil and gold prices. Renewed geopolitical tensions in the Middle East and selling pressure from FIIs may also weigh on the rupee. On the <keyword id="1036447" type="General" weightage="20" keywordseo="domestic-equity-market" source="Orion">domestic equity market</keyword>, the 30-share BSE Sensex was trading 107.27 points, or 0.14 per cent lower at 74,120.36 points. The broader NSE Nifty was down 50.05 points, or 0.22 per cent, to 22,464.60 points. Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Thursday as they offloaded shares worth Rs 1,136.47 crore, according to exchange data. On the domestic macroeconomic front, India's services sector witnessed one of the strongest growth rates in over 13-and-a-half years in March on the back of strong demand that spurred sales and business activity.

Rupee falls 6 paise to 83.45 against US dollar in early trade

Mumbai, <keyword id="19969771" type="General" weightage="20" keywordseo="crypto" source="keywords">Crypto</keyword> currencies cannot be referred to as "currencies" as they have no underlying value, a central bank official said. The <keyword id="19899810" type="General" weightage="20" keywordseo="reserve-bank-of-india" source="keywords">Reserve Bank of India</keyword> (<keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword>) has been critical of new-age currencies like bitcoins, saying they pose systemic risk to the financial systems. "Crypto currencies cannot be called currencies as they don't have any underlying value," P <keyword id="19944928" type="General" weightage="20" keywordseo="vasudevan" source="keywords">Vasudevan</keyword>, an executive director at the RBI, said during a panel discussion organised by IIM-Kozhikode here. Ultimately it is a call that the government has to take on how to tackle crypto currencies, the official said. Currently, bitcoins have no legal backing in India and investors have to pay a tax on the income earned by trading in them. In the backdrop of the action against <keyword id="19907220" type="General" weightage="20" keywordseo="paytm-payments-bank" source="keywords">Paytm Payments Bank</keyword> and curbs imposed on some international card providers, Vasudevan said self-regulation can protect the fintech sector better. He also said that mechanisms could be looked at to highlight bad behaviour.

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Status-quo on interest rate likely, say experts ahead of RBI's policy review

PTI

Rupee falls 1 paisa to close at 83.96 against US dollar

PTI

RBI to hold rates, may sound more confident of reaching inflation target, says report

PTI

Rupee trades in narrow range against US dollar in early trade

PTI

Sensex gains marginally to scale new peak after RBI policy decision

PTI

Rupee falls 6 paise to 83.45 against US dollar in early trade

PTI

Crypto currencies have no underlying value, says RBI official

PTI

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