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<ul><li><strong>RBI shocks the street by leaving interest rates unchanged contrary to market expectations. </strong></li><li><strong>The decision to hold interest rates was triggered by the recent spike in inflation. </strong></li><li><strong>RBI has already cut interest rates five times this year but the lending rates offered by banks have come down much lesser.</strong></li></ul>The Reserve Bank of India shocks the street by leaving interest rates unchanged contrary to market expectations.  The decision to hold interest rates was triggered by the recent spike in inflation. RBI has already cut interest rates five times this year but the lending rates offered by banks have come down much lesser.<br /><br />Repo rate, the interest that the RBI charges banks for lending money to them, is already at a ten-year low. <br />
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
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<br /><strong>These are the top highlights of his speech today after the monetary policy meeting. </strong><br /><br />1. India's real GDP growth estimate cut to 5% for the full-year ending March 2020.<br />2. The decision to leave interest rate unchanged was 'unanimous'.<br />3. Since the October meeting, global economic condition has been subdued though there are some signs of resilience. <br />4. Rabi sowing (the winter crop) was down only 5% by November 29 compared to a year ago. This signals recovery according to the monetary policy panel.<br /><br /><div type="Article" hostid="261" msid="72378620" title="Food inflation will be very high from January to March 2020, warns RBI governor as he keeps interest rates unchanged" mstype="2" mssubtype="0"></div>

<br />5. Governor Das cited the improvement in manufacturing PMI as a sign of economic recovery.<br /><br />6. Net foreign direct investment rose 17% in the first half of the fiscal year and the net foreign portfolio investments (money invested in shares and bonds) were over $8 billion at the end of November compared to a net outflow a year earlier.<br /><br />7. Manufacturing firms expect weak demand in the October-December quarter and fear further erosion of pricing power.<br /><br />8. Economic activity has weakened further but a lot of steps already taken by the government and the RBI will help improve the economy.<br /><br />9. The forthcoming budget will also provide further insight into the government's efforts to improve the economic growth. The monetary policy panel decided it was prudent to pause at this stage and wait for data and government's policy measures.<br /><br />
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
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<br />10. There is space further available for monetary policy actions but there is a need to optimise the impact of the interest rate cuts. We should give more time for the banks to pass on the interest rate cuts provided so far. The timing of the next rate cut will also be important.<br /><br />11. On-tap licensing guidelines for small finance banks will be issued today.<br /><br /><strong>12. Food inflation will remain very high in January to March, warns RBI governor.</strong><br /><br /><strong>13. </strong><strong>The price rise of food items will come down to 3.8% between April and June 2020.</strong><br /><br />14. There is also surplus liquidity in the system. RBI is absorbing about ₹2.5 lakh crore ($35 billion) everyday.<br /><br />Quantitative easing was the same policy adopted by the central banks in developed economies like the US and Europe after the global financial crisis brought the credit market to a grinding halt. In India too, right now, risk-averse banks prefer to keep the money in safes instead of risking it in the form of loans, especially to the crippled non-banking financial companies.<br />
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
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<br />However, the governor kept the suspense alive on the question whether the RBI was considering a programme like the TARP (Troubled Asset Relief Programme) in  the US where the federal funds went into purchasing stock in banks, insurance companies, and auto-makers, and to loan funds to financial institutions and to homeowners. This was brought in 2008 to save some of America's marquee banks-- Bank of America/Merrill Lynch, Bank of New York Mellon, Citigroup, Goldman Sachs, J.P. Morgan, Morgan Stanley, State Street, and Wells Fargo--  from collapsing in the aftermath of the financial crisis of 2008.<br /><br />"I also read it in the paper. Let me leave it at that," RBI Governor Das said. <br /><br /><br />
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
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Top highlights from RBI Governor Shaktikanta Das' speech after the credit policy review

<br /> <keyword id="6358908" type="PERSON" weightage="20" keywordseo="Raghuram-Rajan">Raghuram Rajan</keyword> is one name that we only heard of when the Reserve <keyword id="6355303" type="CITY" weightage="20" keywordseo="Bank-of-India">Bank of India</keyword> policies and cuts were being discussed. But today, he is in news for some other reason, which is the threat email that the <keyword id="64190" type="POSITION" weightage="20" keywordseo="RBI-Governor">RBI governor</keyword> has received on his personal email id. <br />
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	A top Home Department official told PTI, “RBI Governor Raghuram Rajan has received a threatening e-mail following which his security has been stepped up.”<br />
	 

	"The said letter was received a few days back. We have taken note of it and the RBI Governor's security has been beefed up," Maharashtra's Additional Chief Secretary (Home) K P Bakshi told PTI.<br />
	 

	While the content of the email hasn’t been revealed yet, but speculations doing round suggest that it could also be a mischief by someone. 

	The cyber crime investigation cell of police is looking into the matter and trying to trace the origin of the e-mail, the PTI report further added.  

	<br />
	(Image credits: itimes.com)

Is Raghuram Rajan’s life in danger? Cyber Cell is investigating the case

<br /> The <keyword id="6354813" type="COMPANY" weightage="80" keywordseo="nifty">Nifty</keyword> slipped in early deals on Tuesday, snapping a 2-day rally, as traders turned cautious ahead of the Reserve Bank of India's policy event on Interest rates later in the day. <br />
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The Nifty fell 30 points to 8,512. The Advance-Decline Ratio was at 18/32 with Hero Motor, BPCL and Asian Paints taking the first three top spots on the Nifty's gainers list. On the losers' side of the index were Bosch, Cairn and Tata Motors on the Index. <br />
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The mood was cautious in the broader market as well ahead of the policy. Larger indices such as the CNX 100, CNX 200 and CNX 500 also showed muted losses. The Bank Nifty fell in early deals. Sectoral indices such as CNX Energy, CNX Finance and CNX FMCG were down in the red as well.<br />
 <br /> And on the Bombay Stock Exchange, the <keyword id="6484188" type="CITY" weightage="100" keywordseo="Sensex">Sensex</keyword> fell 88 points to 28,099 points in initial trades on Tuesday. As a consequence, the Advance-Decline Ratio stood at 13/17. Wipro, Infosys and ONGC lost ground on the Sensex whereas Hindalco, Vedanta and Mahindra and Mahindra posted modest gains.<br />
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The markets were equally balanced in the futures and options space with Indiabulls Real Estate, Amara Raja Batteries and Oracle Financial being on top of the gainers’ list versus Sun TV, JP Associates and Hindustan Zinc that dropped over their previous close. The Advance-Decline Ratio, meanwhile, stood at 1:1.<br />
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The broader market, too, showed an indeterminate trend at the start of play with 943 shares rising compared with 712 that fell.<br />
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Image credit: Indiatimes<br />

Know how the Markets opened today

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>REUTERS/Babu</span></p><p class="caption">A labourer unloads sacks of onions from a supply truck at a vegetable wholesale market in the southern Indian city of Chennai.</p></div><p></p></div></div>India's wholesale price inflation rate crashed to its lowest level ever.</p><p>The country's Wholesale Price Index (WPI) rate plunged to -4.9% year-over-year for the month of August - below the consensus expectation of -4.4.% - following July's drop down to -4.1% y/y. </p><p>This marks the tenth consecutive month that WPI has been in the negative territory. Additionally, this is the lowest since monthly prices started being tracked in 2005.</p><p>"The WPI rate may not have as much of a bearing on policy-making as the CPI rate, but the fact that it has plummeted again is unlikely to be ignored," writes Capital Economics' India economist Shilan Shah. "This strengthens our view that interest rates will be cut at the Reserve Bank of India's policy meeting later this month."</p><p>Furthermore, Shah writes that it doesn't look like things are going to bounce back anytime soon.</p><p>"Looking ahead, the WPI rate should remain low by past standards," writes Shah. "There is still evidence of spare capacity in the economy, which should keep a lid on core price pressures ... But we remain sanguine. Other factors that have a role to play in determining local food prices - such as global prices and government stockpiles - should help keep inflation anchored."</p><p><div class="KonaFilter image-container display-table"><div><div class="image"><p class="source"><span>Capital Economics</span></p></div><p></p></div></div></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/global-market-meltdown-stocks-oil-2015-8">RED EVERYWHERE: It's a global market meltdown</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="F3NTU1dzpxuF4acJ9B_9g5mwKWDZ5O4E" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

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Top highlights from RBI Governor Shaktikanta Das' speech after the credit policy review

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Is Raghuram Rajan’s life in danger? Cyber Cell is investigating the case

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Know how the Markets opened today

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