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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

State Bank of India (<keyword id="13222" type="CITY" weightage="60" keywordseo="SBI">SBI</keyword>) Chairperson Arundhati Bhattacharya has said that the Reserve Bank of India (<keyword id="30067" type="ORGANIZATION" weightage="100" keywordseo="RBI">RBI</keyword>) is unlikely to cut interest rate in the next <keyword id="6357126" type="ORGANIZATION" weightage="100" keywordseo="monetary-policy">monetary policy</keyword> review. 
 
“The fact of the matter is that all the parameters are indicating that there will be further fall in inflation. Between November and January with the base effect it might go up a little bit. But by March it will be well below whatever the glide path that is indicated by the RBI. RBI governor has indicated that he will be data driven… may be by the end of the fiscal (cut in the interest rate by RBI),” she said. 
 “Base effects will also temper inflation in the next few months only to reverse towards the end of the year. The Reserve Bank will look through base effects,” RBI Governor <keyword id="6358908" type="PERSON" weightage="60" keywordseo="Raghuram-Rajan">Raghuram Rajan</keyword> had said in his monetary policy announcement on September 30. 
 
The RBI is scheduled to come out with its bi-monthly policy announcement on December 2.

RBI May Not Cut Rate In Next
Policy Review: SBI

Ahead of the <keyword id="6357126" type="ORGANIZATION" weightage="100" keywordseo="monetary-policy">monetary policy</keyword> review, Reserve Bank of India (<keyword id="30067" type="ORGANIZATION" weightage="100" keywordseo="RBI">RBI</keyword>) Governor <keyword id="6358908" type="PERSON" weightage="100" keywordseo="Raghuram-Rajan">Raghuram Rajan</keyword> met Prime Minister <keyword id="6354477" type="PERSON" weightage="100" keywordseo="Narendra-Modi">Narendra Modi</keyword>. Officially, the visit was described as a ‘courtesy call.’ 
 
There were speculations that the new government may replace Rajan who was appointed by the UPA government. "The government can fire me, but the government doesn't set the monetary policy," he had said earlier this month. 
 
“There is often a tendency to try and find a wedge between the two and widen the wedge," he had said, as per media reports. 
 
RBI will hold a meeting to discuss its monetary policy. According to analysts, RBI's strong anti-inflation policies may clash with Modi's aim of reviving the economy. 
 Rajan had kept the policy rate unchanged at 8% in its April 1 review as <keyword id="22195" type="COMPANY" weightage="100" keywordseo="Inflation">inflation</keyword> increased to more than 8%. Rajan has hiked interest rates three times since he took charge. 
 
Many economists are of the view that inflation is rising due to supply bottlenecks and the monetary policy is not the right way to bring down prices. Economists expect RBI to keep its repo rate unchanged at 8%.

Rajan Calls On Modi Ahead Of Monetary
Policy Review

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

Though RBI, in its last policy review on June 2 had hinted that there may not be any more cuts in the near term, it is likely to cut <keyword id="6371181" type="UNKNOWN" weightage="100" keywordseo="interest-rates">interest rates</keyword> in its upcoming monetary policy review next month despite <keyword id="513422" type="UNKNOWN" weightage="80" keywordseo="Retail-inflation">retail inflation</keyword> surging to an eight-month high in June, rating agency <keyword id="6423565" type="CITY" weightage="100" keywordseo="Moody">Moody</keyword>'s said today. 

	According to Moody's Analytics, the rise in CPI inflation was largely due to base effect.
 

	As per official data, retail inflation surged to an eight month high of 5.4 per cent in June, from 5.01 per cent in May. 
 

	It was 6.77 per cent in June last year.
 

	"Despite higher CPI inflation, the RBI will deliver another rate cut at its upcoming monetary policy review scheduled for August 4," Moody's Analytics Associate Economist Faraz Syed said in a research note. 
 

	The rise in inflation, a key factor considered by the RBI in deciding the monetary policy, comes in the backdrop of slowdown in factory output. 
 The Index of Industrial Production (<keyword id="6427912" type="ORGANIZATION" weightage="100" keywordseo="IIP">IIP</keyword>) in May slowed to 2.7 per cent from 5.6 per cent a year ago, leading to demands of rate cut from the RBI in its next policy review on August 4. 

	Syed further said that though food prices are rising, rainfalls have been "near average" levels in recent weeks which was one of the pre-condition, for the RBI to maintain an easing bias. 
 

	Moreover, the small rise in minimum support prices for maize and rice has been well below the average increases in previous years and should limit food inflation in the coming months, the report added. 
 
 

	Moody's Analytics expects the wholesale prices to fall further. The June wholesale price-inflation slipped to (-)2.4 per cent, from (-)2.36 per cent in May.
 

	According to Moody's Analytics, the WPI offers a better gauge of core inflation than the CPI and core inflation, in the WPI measure, has been falling in the past few months. 
 

	WPI inflation has been in the negative zone since November, 2014. 
 "Overall weak core inflation suggests <keyword id="35050" type="CITY" weightage="100" keywordseo="gdp">GDP</keyword> growth remains below potential. We think the RBI will cut the repo rate to 7 per cent in 2015," the report noted.

RBI likely to cut interest rates in its upcoming monetary policy review: Moody’s Analytics

Mumbai, Dec 3 () RBI Governor Shaktikanta Das-headed Monetary Policy Committee (MPC) on Tuesday started its three-day deliberations on the policy review amid high expectations of another round of reduction in the key policy rate to revive the sagging economy.
 If the Reserve Bank of India (RBI) cuts the repo rate on Thursday, it would be the sixth reduction in the short-term lending rate in 2019.
 "The MPC will meet during December 3 to 5, 2019 for the fifth bi-monthly Monetary Policy Statement for 2019-20," a release by the central bank said.
 The resolution of the MPC will be placed on the website of the RBI at 11.45 AM on December 5.
 In five reductions in 2019 so far, the repo rate has been lowered by a total of 135 basis points over concerns that growth momentum is slowing down and also to try to boost liquidity in the financial system.
 The GDP growth slowed sharply to more than six-year low of 4.5 per cent in the July-September, hit by a slump in manufacturing output, which contracted by 1.0 per cent. The pace of GDP growth moderated from 5 per cent in April-June and 7 per cent in the July-September quarter of 2018.
 The RBI may cut interest rates again to support growth, bankers and experts said.
 The fall in GDP growth rate was despite a slew of new fiscal policy measures, including a large reduction in the base corporate tax rate in a bid to boost private sector investment.
 The RBI governor had previously stated that interest rates will be cut until growth revives and this gives confidence that policy rates may be reduced at the end of three-day monetary policy review, a banker, wishing not to be identified, said.
 RBI has cut interest rates on every single occasion the multi-member monetary policy committee has met since Shaktikanta Das took over as the Governor of RBI in last December. NKD MR
MR

RBI MPC starts deliberations on monetary policy

The surprise move to hold repo rate should not be seen as an indicator of carrying out similar moves in the future, and <keyword id="30067" type="General" weightage="100" keywordseo="rbi" source="Orion">RBI</keyword> will "not hesitate" in taking further action on rates if needed, Governor <keyword id="6359111" type="General" weightage="80" keywordseo="shaktikanta-das" source="Orion">Shaktikanta Das</keyword> said on Thursday. "If I have to characterise today's monetary policy in just one line...it's a pause, not a pivot," Das told reporters in the customary interaction with reporters after the announcement of the policy review. Earlier in the day, the six-member MPC unanimously decided to pause after repeated hikes in rate over the last 11 months, surprising analysts who were expecting the central bank to make a final 25 basis points hike before opting to pause. The benchmark policy rate (repo rate) is 6.5 per cent. Das said the job to decisively bring down inflation is "not yet finished", and RBI's policy priority continues to be price stability. RBI is keen to assess the cumulative impact of the rate actions done till now, he said. There has been a cumulative hike of 250 basis points since May 2022. In his statement while announcing the policy review, Das pledged to hike interest rate again if needed, saying the decision to pause was "for this meeting only". Speaking to reporters, Das reminded that RBI's target is to get headline inflation to 4 per cent from the 6 per cent levels at present, and the monetary policy will be working towards progressively aligning with the target. Deputy Governor Michael Patra said RBI has marginally upped its FY24 growth estimate to 6.5 per cent primarily on assumption of a decline in the average oil price to USD 85 per barrel from USD 90 per barrel earlier.

It's just a pause not a pivot, says Shaktikanta Das on RBI's status quo

Mumbai (Maharashtra) [India], April 5 (ANI): <keyword id="19899810" type="General" weightage="20" keywordseo="reserve-bank-of-india" source="keywords">Reserve Bank of India</keyword> Governor Shaktikanta Das will announce the outcome of the first <keyword id="6375120" type="General" weightage="20" keywordseo="Monetary-Policy-Committee" source="Orion">Monetary Policy Committee</keyword> (MPC) meeting of the financial year 2024-2025 on Friday. The central banking authority of India has kept the <keyword id="43352" type="General" weightage="20" keywordseo="repo-rate" source="Orion">repo rate</keyword> unchanged for the last six consecutive MPC meetings and according to experts it is likely to maintain the status quo on interest rates this time too. The repo rate, is the interest rate at which banks draw funds from <keyword id="30067" type="General" weightage="20" keywordseo="RBI" source="Orion">RBI</keyword> to overcome short-term liquidity mismatches. Monetary Policy Committee was constituted under the Reserve Bank of India Act, 1934. MPC is a six-member committee comprising three members from RBI including Governor Shaktikanta Das and three members appointed by the Central government. The two-day review meeting of the MPC that commenced on April 3 concludes today. The RBI had maintained the status quo on policy rates and stances in its last review, which was held in February 2024. The decision however was not unanimous and one member has recommended a rate cut of 25 basis points and policy change stand to neutral. Since the last policy, rating agencies have revised India's growth forecast upwards. <keyword id="7706673" type="General" weightage="20" keywordseo="Finance-Minister-Nirmala-Sitharaman" source="Orion">Finance Minister Nirmala Sitharaman</keyword>, recently said that India will grow over 8 per cent in FY24. Inflation has dropped and has remained under the range of comfort zone. Consumer Price Index inflation was 5.1 per cent in February 2024, up from over 5.5 per cent in December 2023. The core CPI inflation, excluding food and beverages, was at a low of 3.5 per cent in February 2024. However, food inflation at above 7 per cent was a concern, but with a recent cut in the prices of petrol, diesel and LPG, it is likely to further fall in March and may come below 5 per cent. Meanwhile, the India Meteorological Department's (IMD) recent announcement of above-normal temperatures during April-June may be a concern regarding rise in prices of vegetable, fruits and other perishable items. Also prices of rice, pulses have shown an upward trend which may be a concern for the MPC while taking a decision. However, softening prices of non-food items will give some relief to the committee. Generally, normal monsoons follow above normal temperatures, presuming that the average CPI inflation is likely to be in the RBI's comfort zone of 4-6 per cent in FY25. According to official data, retail inflation in India eased a tad in February to 5.09 per cent from 5.10 per cent the prior month, due to the deceleration of prices in all categories except food. Experts believe that the RBI is unlikely to change its policy stance before the August 2024 MPC review and any rate cut is unlikely before that. The US Fed has also recently indicated that it is not in a hurry to cut rates. All these suggest that the RBI, too, is unlikely to go for a rate cut before the October 2024 policy. The next MPC meetings of the RBI have been scheduled this year for June, August, October, December and February 2025.

RBI Monetary Policy Meeting: Central Bank likely to keep rates steady

Mumbai, Feb 3 () Amid slowing GDP growth and rising inflation, the Reserve Bank of India (RBI) will unveil its last monetary policy for the current financial year on Thursday.
 The sixth bi-monthly monetary policy statement for 2019-20 would be the last one for the current financial year.
 The Monetary Policy Committee (MPC) will meet during February 4-6 for the policy review, the RBI said in a release on Monday.
 The RBI said it will place the resolution of the MPC on its website before noon on February 6.
 The government has estimated India's gross domestic product (GDP) to be growing at a slower pace of 5 per cent in the current financial year on the back of various factors, domestic and global, including weakening consumption demand in the country.
 In December, the retail inflation also peaked to a five-year high of 7.3 per cent, mainly due to costlier vegetables, specifically onion and tomato.
 The Economic Survey 2019-20 has projected the Indian economy to grow at around 6-6.5 per cent in the next financial year beginning April 2020.
 "With fiscal policy taking a growth-supportive role, on the back of monetary policy being ahead of the curve last year, the calibrated policy mix should bode well for growth.
 "We look for the central bank to remain on an extended pause on rates (even as supply-induced shocks dissipate) but maintain an accommodative bias to ensure cost of capital remains stable and favourable," Radhika Rao, senior vice-president and economist, DBS Group Research, said.
 Crisil Ratings in its post-Union Budget 2020-21 comment has said, "Monetary policy has done its bit, but with moderate and slow success."
 It added that the RBI cut the repo rate cumulatively by 135 basis points (bps) through calendar 2019, but lending rates tarried with just nearly 50-bps decline. "Even as credit demand has fallen, risk aversion and weak sentiment have affected the willingness to supply credit, too."
 In its previous monetary policy review in December, the RBI had decided for a status quo, leaving the key repo -- the rate at which it lends to banks -- at 5.15 per cent. KPM HRS

RBI to come out with last monetary policy for FY20 on Thursday

<ul><li>While <keyword id="773932" type="PERSON" weightage="20" keywordseo="Food-inflation-data">food inflation data</keyword> shows it is under 4%, the prices of a few essential foods like pulses and vegetables have spiked. </li><li><keyword id="617887" type="PERSON" weightage="20" keywordseo="RBI-survey">RBI survey</keyword> says that households expect inflation to rise by 40 basis points over a 3-month ahead horizon. </li><li>RBI also said that “salary outgoes remained muted”, in its monetary policy committee report. </li></ul>When bread is too expensive, one should eat cake. This statement could have caused a revolution in France, but for Indians who are scrambling to keep their food budgets stable, might save a buck or two by tweaking their diet. The overall food inflation data shows has been hovering around or under 4% between February and August this year. This is in spite of erratic rains affecting the prices of perishable foods like meat and fish. These price hikes are balanced out by other food prices which have either remained steady or declined. “Softer increases in the prices of eggs, and deflation in the prices of fruits and sugar cushioned the rise in overall food inflation,” said an RBI Monetary Policy Committee report released today. Indian households expect price rises Few Indian homes are buying into ‘All is well’ ringtone that is being sounded everywhere from <a href="https://www.businessinsider.in/abki-bar-trump-sarkar-pm-modi-heaps-praise-on-friend-donald-trump/articleshow/71249519.cms">Howdy Modi rally</a> in the US to Finance Minister’s press conferences. In fact, most of them are budgeting for price hikes ahead. “The Reserve Bank’s September 2019 round of inflation expectations survey indicates that households expect inflation to rise by 40 basis points over a 3-month ahead horizon and 20 basis points over a one-year ahead horizon, possibly responding adaptively to the rise in food prices in recent months,” said RBI Governor Shaktikanta Das during a press conference announcing a 25-basis point cut in interest rates on October 4. Replace meat with eggs Most people have already cut down purchases of non-essentials like automobiles, as RBI itself admitted that “salary outgoes remained muted”, in its monetary policy committee report. While purchases of essentials cannot be cut, replacing a few could keep budgets intact. Those who love meat have to shell out more as their prices went up by 8.5% in August, according to CEIC. This key protein source can be replaced with yet another healthy option---which is eggs. Their prices went up by a bare 0.3% in the same period, making them affordable. Bad news for vegetarians Vegetarians however will have no option but to shell out more as prices of pulses spiked by 6.9%. What makes it worse is that prices of vegetables also went up by the same extent, making it tougher to get by. But if vegetarians can replace their much needed vitamin and mineral source by reducing vegetable intake and increasing fruit intake, they might get a hold on their budgets. The prices of fruit on the other have come down by 0.7% bringing in good news for healthy munchers. Those with a sweet tooth however have a lot to celebrate as sugar and confectionary prices came down by 2.4%. Those who love fried foods, packed meals and non-alcoholic beverages too can gain as their prices grew in the 2-3% range. But binging on sweets and snacks because of their prices are low might not be a good idea. As the prices of non-institutional medicines spiked by a whopping 9% for the same period.

Tweak your diet to control your food budget— the RBI guide on what to eat

RBI’s outgoing Governor <keyword id="6358908" type="PERSON" weightage="20" keywordseo="Raghuram-Rajan">Raghuram Rajan</keyword> kept the <keyword id="2177983" type="UNKNOWN" weightage="20" keywordseo="repo-rate-unchanged">repo rate unchanged</keyword> at 6.50 per cent and even the Cash Reserve Ratio (CRR) was not moved at 4 per cent. 
 
The Reserve Bank of India (RBI) took an accommodative stance but was hawkish on inflation. The uptick in inflation was due to rising prices of vegetables, fruits and pulses. 
 
The retail inflation measured by the Consumer Price Index (CPI) rose to nearly two-year high in June, driven by increase in food and vegetable prices. 
 
READ ALSO: RBI’s outgoing Governor Raghuram Rajan holds interest rates at 6.50% in his last policy review 
 This is the last <keyword id="6357126" type="ORGANIZATION" weightage="20" keywordseo="monetary-policy">monetary policy</keyword> of Rajan, whose term expires on September and will be taking up academia in the US. 
 In his last policy review, Rajan spoke about liquidity, non-performing assets, <keyword id="6354679" type="ORGANIZATION" weightage="20" keywordseo="GST">GST</keyword> inflation etc. 
 
Here are the main takeaways from Rajan’s last monetary policy 
 
Inflation: The RBI statement read that the recent sharper-than-anticipated increase in food prices pushed up the projected trajectory of inflation over the rest of the year. Moreover, prices of pulses and cereals are rising and services inflation remains somewhat sticky. But, indication are there of them edging down. “Impact of good monsoons will also be helpful,” said Rajan. 
 
Seventh Pay Commission: The implementation of the 7th Pay Commission recommendations will affect the magnitude of the direct effect of house rents on the CPI. The CPI risks will be tilted to the upside. 
 
Goods and Services Tax (GST): The RBI stated the passage of the GST Bill augurs well for growing political consensus for economic reforms. “While timely implementation of GST will be challenging, there is no doubt that it should raise returns to investment across much of the economy,” said Rajan. 
 
Momentum of growth: RBI stated the momentum of growth is expected to be quickened by the normal monsoon raising agricultural growth and rural demand, as well as by the stimulus to consumption spending that can be expected from the disbursement of pay, pension and arrears following the implementation of the 7th Pay Panel. 
 
Non-Performing Assets: Rajan said the RBI was comfortable with the way banks were taking up the issue. He said banks know what to do and RBI has many schemes for NPAs. It all depends on the banking system and Rajan said they are doing their bit. 
 
Rate transmission: Rajan said once there is liquidity, banks will pass on the rate cuts. Rajan said banks will also have to clean up bad debts to pass on the rate efficiently

Here are 6 key takeaways from Raghuram Rajan’s ultimate policy review

Mumbai, Mar 13 () The Reserve Bank may go for a rate cut before the next scheduled policy review on April 3, and is likely to slash rates by 0.75 percentage point in 2020 as inflation ebbs, a foreign brokerage said on Friday. Central banks have been cutting rates and injecting liquidity to counter economic slowdown because of the coronavirus pandemic. "We expect the RBI MPC (monetary policy committee) to cut rates by 25 per cent before or on April 3 with inflation having peaked," Bank of America Securities said in a report released a day after official data said there has been a cool-off in inflation to 6.6 per cent in February. It added that the RBI, which is contract-bound to ensure inflation is between 2-6 per cent, will also take the call on a rate cut on falling global growth and further easing by the US Fed on top of the surprise 0.50 per cent cut. "An immediate RBI rate cut will lower lending rates for banks' MSME/retail/mortgage loans before the 'busy' industrial season ends in March," the brokerage said. Its peer Barclays had also opined on Thursday that there can be a possibility of a rate cut between the policies. After the cut ahead of the April 3 policy or on that date, RBI will deliver another rate cut at the June review and go for a pause after cutting again in October, it said, lowering its inflation expectations for FY21 to 4 per cent from 4.8 per cent earlier. BofA said the core inflation is well contained at 3.6 per cent as per the latest data print. On growth, which seems to be accorded priority by the central bank as seen in the actions over the last one year, the brokerage said the March quarter GDP expansion will come at an "anemic" 4.3 per cent with downside risks. It said that the growth number for FY21 will come at 5.4 per cent, up from the 4.8 per cent in FY20. Amid talk of a review of the flexible inflation targeting framework, it said the revised contracts will introduce growth and financial stability as co-objectives of monetary policy along with price stability. The brokerage also said that there is a likelihood of a 0.3 per cent slippage in the 3.5 per cent fiscal deficit target set in the budget, but underlined that this is below the 4.5 per cent long-run average. AA MRMR

RBI may go for rate cut before next scheduled policy, says brokerage

<ul><li>The <keyword id="6354335" type="ORGANIZATION" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> has removed the charges levied to process any online transaction through <keyword id="285745" type="ORGANIZATION" weightage="20" keywordseo="NEFT">NEFT</keyword> and <keyword id="6356014" type="ORGANIZATION" weightage="20" keywordseo="rtgs">RTGS</keyword> system. </li><li>The Central Bank has also decided to set up a committee to review the charges for using the ATM machine. </li></ul>The Reserve Bank of India (<keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword>) today paved the way for cheaper online fund transfers as it removed charges levied on NEFT and RTGS transactions. And, banks will be expected to make it cheaper for customers to perform these transactions too. “In order to provide an impetus to digital funds movement, it has been decided to do away with the charges levied by the Reserve Bank for transactions processed in the RTGS and NEFT systems. Banks will be required, in turn, to pass these benefits to their customers. Instructions to banks in this regard will be issued within a week,” RBI said on Thursday. The Reserve Bank levies minimum charges on banks for transactions routed through its RTGS and NEFT. Banks, in turn, levy charges on their customers. The decision to scrap the fees levied on RTGS transaction comes days after RBI extended the timings for doing RTGS transaction. Currently, the fee for transferring funds using RTGS varies according to the time. There is no fee between 8 am to 11 am. The fee for transfer of funds during 11 am to 1 pm is ₹2 whereas from 1 pm to 6 pm is ₹5. The fee for transaction after 6 pm is ₹10. Review ATM Charges The Central Bank has also decided to set up a committee to review the charges for using the ATM machine. The committee will be chaired by Chief Executive Officer, Indian Banks’ Association (IBA), who will examine the entire issue related to ATM charges and fees. “Usage of ATMs by the public has been growing significantly. There have, however, been persistent demands to change the ATM charges and fees,” the central bank said in a statement. Earlier today, The Reserve Bank of India decided to reduce the repo rate for the commercial banks by 25 basis points (bps) to 5.75% in its second monetary policy review of the current fiscal. The RBI changed its monetary policy stance from neutral to accommodative, ruling out the chances of a rate increase. See also: <a href="https://www.businessinsider.in/rbi-cuts-repo-rate-by-25-bps-as-largely-expected/articleshow/69671872.cms">RBI surprises markets with a change in stance — aims to revive India's 'animal spirits'</a> <a href="https://www.businessinsider.in/rbi-to-extend-rtgs-deadline-to-6-p-m-from-june-1/articleshow/69553735.cms">RBI to extend RTGS deadline to 6 p.m. from June 1</a>

RBI moves to make online bank transfer cheaper, to review ATM charges

Mumbai, Feb 6 () After leaving benchmark interest rates rates unchanged in the second consecutive policy review, RBI governor Shaktikanta Das on Thursday said the central bank has many other instruments to address the sluggishness the economy, not just interest rates. The Reserve Bank of India (RBI) in its sixth bi-monthly monetary policy pegged GDP growth for FY21 at 6 per cent, but guided towards an uncertain inflation outlook. In a January 31 release, the National Statistical Office (NSO) had revised down real GDP growth for FY19 to 6.1 per cent from 6.8 per cent provided in the provisional estimates of May 2019. Given this, the central bank noted that the economy is still plagued by deep output gaps. "The RBI has several instruments to address the sluggishness in the growth momentum," Das told reporters at the customary post-policy conference. The monetary policy committee (MPC) kept the policy repo rate unchanged at 5.15 per cent, continuing with the accommodative stance to revive growth. The governor said the continuity in policy from last pause should not be read as a pointer to future actions. "While the decision is as per expectations, it is important not to discount RBI," he said. AA HV BEN ANSANS

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