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<keyword id="19951168" type="General" weightage="20" keywordseo="RBI-governor-Shaktikanta-Das" source="keywords">RBI governor Shaktikanta Das</keyword> announced no change in prevailing interest rates and maintained the withdrawal of accommodation stance in the ongoing <keyword id="20456086" type="General" weightage="20" keywordseo="Monetary-Policy-Review" source="keywords">Monetary Policy Review</keyword> (MPC) meeting, which was held between August 6th and August 8th, 2024. This was the 50th MPC meeting since its inception. <h2>What is MPC meet? </h2>The <keyword id="19899810" type="General" weightage="20" 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) held its third <keyword id="22709762" type="General" weightage="20" keywordseo="bi-monthly-MPC-meet" source="keywords">bi-monthly MPC meet</keyword>, which began on August 6th, 2024 and concluded today. Experts were widely of the view that there would be no significant changes in the <keyword id="22709761" type="General" weightage="20" keywordseo="benchmark-repo-rate" source="keywords">benchmark repo rate</keyword> during this MPC meet, and that the MPC would keep it unchanged at 6.5%. This is the ninth time the <keyword id="20094323" type="General" weightage="20" keywordseo="repo-rate" source="keywords">repo rate</keyword> has been left unchanged, since it was last increased from 6.25% to 6.5% on 8th February 2023. MPC includes 6 members, three from RBI, and three external experts. Together, they are responsible for setting the benchmark interest rate, or repo rate. This is the rate at which the central bank of the country i.e. RBI lends to other banks of the country. If it is increased, the same translates into higher borrowing costs for consumers as well. <h2>What was the decision? </h2>MPC decided, by a majority of 4:2 members, that the repo rate will be left unchanged at 6.5%. This was done to align both market expectations and monetary policies. The MPC has decided to focus on maintaining price stability to ensure growth, and that inflation progressively aligns with the target. Notably, the RBIs inflation target is around 4%, with a tolerance band of about 2%. This target was last met in January 2021, when inflation stood at 4.06%. Per the governor, "PMI services stood strong at 60.3 in July, and have been above 60 for seven constitutive months, indicating robust expansion of services. On the demand side, household consumption is supporting a turnaround in rural demand and steady discretionary spending in urban areas is also being observed". As Das noted, sustained buoyancy in services activity is expected to support urban consumption. Moreover, government's thrust on capex, and signs of pickup in private investment would drive investment activity in the current year. Taking all these factors into consideration, the real GDP growth for 2024-25 has been projected at 7.2% . This is distributed as 7% in Q1, 7.1% in Q2, 7.2% in Q3 and 7.3% in Q4. Explaining the moderation of growth projections for the first quarter of the current FY, as compared to information given during previous MPC in June, Das explained that this was primarily due to updated information on certain high frequency indicators which show lower than anticipated results. These include corporate profitability, central government expenditure and core industries output, among others. As for CPI inflation for current FY, it has been pegged at 4.5%. Accordingly, Q2 projections stand at 4.4%, Q3 at 4.7% and Q4 at 4.3%. CPI inflation for the first quarter of next financial year i.e. Q1FY26 is projected at 4.4%. <h2>Is high food inflation a key concern? </h2>In June 2024, food inflation surged, pushing overall CPI (consumer price index) inflation to 5.1% during the month, from 4.8% in May. It may be noted that food inflation forms a significant part of CPI. That is why, even with a supportive base effect from the previous year, food inflation jumped to 9.4%, driven mostly by high vegetable prices, which have remained in double digits for eight months. "The inflation trajectory has been moderating, and we do expect it to moderate, but the pace of modulation has been uneven and slow. So, we need to be watchful to ensure that we move closer to target, and CPI inflation gets aligned to the target on a durable basis", continued Das. <h2>Some segments of personal loans are excessively leveraged, notes Das </h2> Going ahead, there will be a public repository of digital lending apps deployed by the regulator. This comes amidst a spike in number of unauthorised lending apps, and certain segments of personal loans witnessing excess leverage through retail loans, most of which are for consumption purposes, the governor noted. Additionally, the current UPI transaction limit for tax payments is being enhanced from Rs 1,00,000 to Rs 5,00,000 per transaction. Also, the clearance cycle is also being shortened and made almost continuous, with cheques being cleared on the same day, within just a few hours of being presented, benefiting all stakeholders. <h2>What are the experts saying? </h2>Says Anuj Puri, Chairman - ANAROCK Group, "The RBI's decision to keep repo rates unchanged at 6.5% for ninth consecutive time aligns well with yesterday's announcement on indexation benefits. It sets a positive tone for the housing industry. Maintaining interest rates offers consistency in borrowing costs, which will prompt more aspiring homebuyers to consider taking the plunge - and thus drive demand in the housing market. With interest rates staying steady, EMIs will remain manageable for current and potential homeowners, potentially leading to increased home sales - particularly in the price-sensitive affordable segment". <h2>When is the next MPC scheduled?</h2>The upcoming RBI MPC meets are scheduled to take place between October 7th and 9th, December 4th an 6th, 2024, and February 5th and 7th, 2025.

RBI MPC Meet: Repo rates unchanged at 6.5%, inflation moderating, albeit slowly

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

<ul><li>The <keyword id="19899810" type="General" weightage="20" 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> will conclude the three-day <keyword id="19913109" type="General" weightage="20" keywordseo="Monetary-Policy-Committee" source="keywords">Monetary Policy Committee</keyword> (<keyword id="19918491" type="General" weightage="20" keywordseo="MPC" source="keywords">MPC</keyword>) meeting today.</li><li>The central bank is expected to announce its decision on policy rates.</li><li>The <keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords">RBI</keyword> has maintained the <keyword id="20094323" type="General" weightage="100" keywordseo="repo-rate" source="keywords">repo rate</keyword> at 6.50% for the past nine meetings.</li></ul>The Reserve Bank of India (RBI) is set to conclude the three-day Monetary Policy Committee (MPC) meeting today, with Governor <keyword id="19913110" type="General" weightage="20" keywordseo="Shaktikanta-Das" source="keywords">Shaktikanta Das</keyword> expected to announce the central bank's decision on policy rates. The meeting, which <a href="https://www.businessinsider.in/finance/news/rbis-monetary-policy-committee-meeting-begins-today-announcement-on-october-9/articleshow/113999887.cms">began</a> on October 7, has garnered significant attention, as the RBI has maintained the repo rate at 6.50% for the past nine meetings. The repo rate has remained steady since the RBI adopted a cautious stance to balance inflation control and <keyword id="19900794" type="General" weightage="20" keywordseo="economic-growth" source="keywords">economic growth</keyword>. Key factors that the MPC is weighing include persistent inflationary pressures, particularly in food prices, as well as global economic uncertainties. According to data from the Ministry of Statistics &amp; Programme Implementation, while All India Consumer Price Index (CPI) inflation moderated to 3.65% in August--within the RBI's target band of 2-6%. <keyword id="19999654" type="General" weightage="20" keywordseo="food-inflation" source="keywords">Food inflation</keyword> remains elevated at 5.65%, above the central bank's medium-term target of 4%. This, coupled with rising global crude oil prices due to geopolitical tensions in West Asia, has intensified concerns over inflation. Despite these challenges, the RBI has so far opted for a status quo on the repo rate, aiming to foster economic recovery after the pandemic. However, today's announcement will be closely watched to see if the central bank shifts its stance, especially given the external pressures and uncertainties surrounding global markets. Economists, however, have noted that the RBI will not make any changes in its policy stance before December. "With the focus on taming headline inflation, the RBI is likely to hold the rates although the core inflation is within the limit. It is possible the RBI may shift to the neutral stand" said M Govind Rao, Member, of the Fourteenth Finance Commission and former Director, of the National Institute of Public Finance and Policy. On September 18, the US Federal Reserve announced a steep 50 basis points interest cut in its review meeting. US Fed announced the rate cuts after holding interest rates steady for eight straight meetings. "In this overarching macroeconomic setting of heightened geopolitical tensions, core inflation inching upwards, oil price volatility, and high food inflation, we anticipate a change in the RBI's policy stance from "withdrawal of accommodation" to "neutral" at its forthcoming MPC meeting on October 9, 2024. However, we do not see any rate action coming and the benchmark interest rates may not undergo any change" said Manoranjan Sharma, Chief Economist, Infomerics Ratings. Earlier this month the central government appointed three new members to the monetary policy committee. The MPC comprises three members from the RBI and three external members appointed by the Central Government. With inputs from ANI. SEE ALSO: <a href="https://www.businessinsider.in/business/auto/news/byd-emax-7-electric-mpv-launched-in-india-starting-at-26-9-lakh/slidelist/114046121.cms">BYD eMax 7 electric MPV launched in India starting at ₹26.9 lakh</a> <a href="https://www.businessinsider.in/personal-finance/news/heres-how-a-reddit-user-was-able-to-get-an-iphone-16-at-under-27000/articleshow/114035179.cms">Here’s how a Reddit user was able to get an iPhone 16 at under ₹27,000</a> <a href="https://www.businessinsider.in/stock-market/news/hyundai-swiggy-ather-upcoming-large-ipos-in-india/slidelist/114014140.cms">Hyundai To Swiggy: Everyone wants to cash in on the IPO bonanza</a>

RBI MPC announcement today: Rates unlikely to change, RBI may change stance to neutral

The Indian central bank’s rate-setting panel, the Monetary Policy Committee (MPC), has kept the <keyword id="2177983" type="General" weightage="20" keywordseo="repo-rate-unchanged" source="Orion">repo rate unchanged</keyword> at 6.5%, <keyword id="6359111" type="General" weightage="20" keywordseo="Shaktikanta-Das" source="Orion">Shaktikanta Das</keyword>, governor of the Reserve Bank of India (<keyword id="30067" type="General" weightage="20" keywordseo="RBI" source="Orion">RBI</keyword>), confirmed on Friday. The decision was taken in a majority 4:2 vote by the six-member MPC, headed by <keyword id="7268643" type="General" weightage="20" keywordseo="rbi-governor-shaktikanta-das" source="Orion">RBI Governor Shaktikanta Das</keyword>. This meeting followed closely on the heels of Lok Sabha 2024 election results and a renewed but less robust mandate for the NDA government, spearheaded by Prime Minister Narendra Modi. This marks the eighth consecutive instance where the central bank has maintained the status quo on the benchmark <keyword id="43352" type="General" weightage="100" keywordseo="repo-rate" source="Orion">repo rate</keyword>. It had last increased the repo rate to 6.5 percent back in February 2023. For context, the repo rate is the interest rate at which the RBI lends to banks. When the repo rate is cut, it makes borrowing cheaper for banks, which in turn leads to lower loan rates and consequently, reduced EMIs. "As expected, the MPC has decided to keep the repo rate unchanged at 6.5%. This decision aligns with the MPC's calibrated measures to tackle persistent inflation. The RBI has successfully maintained the resilience of the Indian economy, contributing to sustained growth momentum even amidst a challenging global environment," said Mr Ashwin Chadha, CEO of India Sotheby's International Realty. "The good news is that CPI inflation continues to soften, and the GDP growth rate is projected to remain above 7% for all quarters of FY2024-25. Additionally, the monsoon is expected to be favorable, reducing potential risks to the economy." Governor Das, in his post-policy press conference, also underscored the need for a balanced approach in handling monetary policy. He highlighted the MPC's strategy of gradually scaling back accommodation to ensure that inflation meets the targeted range, while still fostering economic growth. “Monetary policy must continue to remain disinflationary and be resolute in its commitment to aligning inflation to the target of 4 per cent on a durable basis to sustain price stability and outset strong foundation,” the <keyword id="64190" type="General" weightage="20" keywordseo="rbi-governor" source="Orion">RBI Governor</keyword> stated. The RBI has also updated its growth forecasts for the 2024-25 financial year, predicting a GDP growth rate of 7.2%. The projections for each quarter are 7.3% for Q1, 7.2% for Q2, 7.3% for Q3, and 7.2% for Q4. Governor Das pointed out that the risks to this growth outlook are evenly distributed. By maintaining the repo rate at its current level, the RBI signals its cautious stance on balancing the dual objectives of inflation control and economic recovery support. This decision comes at a crucial time, as the global economy contends with uncertainties from geopolitical conflicts and the ongoing impacts of the COVID-19 pandemic. (With inputs from ANI)

Monetary Policy Committee keeps repo rate unchanged at 6.5%, confirms RBI governor Shaktikanta Das

After the exit polls predicted a landslide victory for the BJP-led NDA over the weekend, Sensex gained over 2,000 points on Monday. However, the actual results the next day turned out to be a rude shock for the investors hoping for a stable government and policy continuity. By Tuesday noon, Sensex shed over 5,000 points as it became clear that there will be a government based on alliance at the centre. Since then, the markets have slowly recovered and are back in the green again. But now all eyes are on the ongoing <keyword id="6354335" type="General" weightage="20" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword>'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) to determine the future course for the investors. RBI is gearing up to announce its monetary policy on June 7, with the meeting, led by Reserve Bank Governor Shaktikanta Das, currently in session in Mumbai. This gathering follows closely on the heels of a renewed but less robust mandate for the NDA government, spearheaded by Prime Minister Narendra Modi. In this session, the RBI faces the task of deciding on <keyword id="43352" type="General" weightage="100" keywordseo="repo-rate" source="Orion">repo rate</keyword>s amidst inflationary challenges. For context, the repo rate is the interest rate at which the RBI lends to banks. When the repo rate is cut, it makes borrowing cheaper for banks, which in turn leads to lower loan rates and consequently, reduced EMIs. The central bank last increased the repo rate to 6.5 percent in February 2023, and has maintained this rate through the last seven bi-monthly policies. Should the RBI decide to leave interest rates unchanged on June 7, it would mark the eighth consecutive instance of maintaining the status quo on the benchmark repo rate. <cmsannotation type="cmsannotation" annotationid="Repo rate cut unlikely: Experts" comment="subhead" text="Repo rate cut unlikely: Experts"><keyword id="931605" type="General" weightage="20" keywordseo="repo-rate-cut" source="Orion">Repo rate cut</keyword> unlikely: Experts</cmsannotation> Experts suggest that a repo rate cut is unlikely, given the current growth momentum which has been revised upwards by several rating agencies. <keyword id="5141750" type="General" weightage="20" keywordseo="Swati-Saxena" source="Orion">Swati Saxena</keyword>, Founder &amp; CEO of 4 Thoughts Finance, a wealth management firm, echoes these views, anticipating a cautious approach from the RBI. Saxena remarked: “Recent economic indicators reveal a deceleration in GDP growth to 7.8% year-on-year in the fourth quarter of the last fiscal year, down from 8.6% in the preceding quarter, yet an improvement from the 6.1% growth observed in the corresponding quarter of the previous year. This nuanced economic landscape suggests the RBI will likely prioritise bolstering economic recovery while vigilantly monitoring inflationary trends. All things considered, Saxena expects the RBI to maintain current policy rates to stimulate investment and consumption, while carefully balancing the imperatives of fostering economic growth and mitigating inflationary pressures. She adds that the investor sentiment is likely to remain optimistic, buoyed by the market's ongoing resilience and steady performance. This positive outlook is supported by robust economic indicators, strong corporate earnings reports, and sustained confidence in future growth. Additionally, the influx of institutional investments and continued liquidity availability are expected to uphold this bullish market sentiment, ensuring its persistence in the foreseeable future. Meanwhile, as the MPC continues its deliberations, market volatility may persist, particularly impacting stocks that are sensitive to interest rate changes.

After a volatile week, all eyes on RBI’s Monetary Policy meeting! But experts expect no change in repo rate

<ul><li>Long-duration <keyword id="35474" type="General" weightage="20" keywordseo="debt-funds" source="Orion">debt funds</keyword> are a category of mutual funds that primarily invest in fixed-income securities with extended maturity periods of seven years or more. </li><li>Long-term bond funds tend to exhibit an inverse relationship with interest rates.</li><li>Once interest rates start coming down as expected, investors in long duration debt funds will be benefited. </li></ul>With the Nifty surpassing 22,000 and the Sensex above 73,000, the bulls are making merry on Dalal Street. Indian investors, seeking to ride the wave, are going gung-ho about mutual funds, especially in the small and mid-cap category, but debt funds are not in vogue. However, investment gurus say that no investor should ignore debt funds because it is an important part of asset allocation. Moreover, at present, a category of debt funds, known as long duration debt funds, is creating a buzz. This is because currently the repo rate is 6.50% after the Reserve Bank of India (<keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword>) maintained status quo for the fifth consecutive time in its last policy. Before that the RBI had hiked the repo rate by 2.5% from May 2022 to February 2023. “With the high interest rate regime behind us, interest rates are expected to reduce going ahead, aided by moderating inflation and crude oil prices. We expect RBI to cut interest rates in 2024,” says Ajaykumar Gupta, chief business officer, TRUST Mutual Fund. If this unfolds, it is good news for long term debt funds. “A cut in interest rates would lead to additional gains in form of bond price appreciation, which would benefit investors investing in <keyword id="6775742" type="General" weightage="20" keywordseo="long-duration-funds" source="Orion">long duration funds</keyword>,” says Gupta. What are long duration funds? Long-duration debt funds are a category of mutual funds that primarily invest in fixed-income securities with extended maturity periods of seven years or more. “These funds, having a portfolio Macaulay duration of more than seven years as per SEBI mandate, typically invest in instruments like Government bonds, corporate bonds, treasury bills, bonds issued by banks etc., making them suitable for long term investors,” says Gupta. Macaulay duration is a measure used in finance to estimate the weighted average time it takes for an investment to recover its initial cost in the form of present value of future cash flows, including interest and principal payments. “However, there are different kinds of debt funds that can take a long-term debt fund kind of form- dynamic bond funds or gilt funds- fund managers can invest in long duration bonds,” says Pankaj Pathak, fund manager, fixed income, Quantum AMC. Relation with interest rates Long-duration debt funds tend to exhibit an inverse relationship with interest rates. Whenever interest rates fall bond prices move up and vice versa. When interest rates fall, mutual funds that invest in long-term bonds typically experience an increase in bond prices. As bond yields move inversely to interest rates, the existing fixed-rate bonds held by these funds become more attractive. The higher bond prices contribute to capital gains for investors. “If the interest rate goes up, the return of long duration debt funds comes down. If interest rates start coming down then the return of long duration bond funds go up. The credit risk of long duration debt funds is not that high as they invest mostly in government securities, but the interest rate risk is very high,” says Soumya Sarkar, Co-Founder, Wealth Redefine, an AMFI registered mutual fund distributor. <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 0.68181825pt;border-right:solid #000000 0.68181825pt;border-bottom:solid #000000 0.68181825pt;border-top:solid #000000 0.68181825pt;vertical-align:bottom;background-color:#1589ff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Funds </td><td style="border-left:solid #000000 0.68181825pt;border-right:solid #000000 0.68181825pt;border-bottom:solid #000000 0.68181825pt;border-top:solid #000000 0.68181825pt;vertical-align:bottom;background-color:#1589ff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">1 year return (%) </td></tr><tr><td style="border-left:solid #000000 0.68181825pt;border-right:solid #000000 0.68181825pt;border-bottom:solid #000000 0.68181825pt;border-top:solid #000000 0.68181825pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Aditya Birla Sun Life Long Duration Fund - Direct Plan </td><td style="border-left:solid #000000 0.68181825pt;border-right:solid #000000 0.68181825pt;border-bottom:solid #000000 0.68181825pt;border-top:solid #000000 0.68181825pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.57 </td></tr><tr><td style="border-left:solid #000000 0.68181825pt;border-right:solid #000000 0.68181825pt;border-bottom:solid #000000 0.68181825pt;border-top:solid #000000 0.68181825pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Axis Long Duration Fund - Direct Plan </td><td style="border-left:solid #000000 0.68181825pt;border-right:solid #000000 0.68181825pt;border-bottom:solid #000000 0.68181825pt;border-top:solid #000000 0.68181825pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.92 </td></tr><tr><td style="border-left:solid #000000 0.68181825pt;border-right:solid #000000 0.68181825pt;border-bottom:solid #000000 0.68181825pt;border-top:solid #000000 0.68181825pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">ICICI Prudential Long Term Bond Fund - Direct Plan </td><td style="border-left:solid #000000 0.68181825pt;border-right:solid #000000 0.68181825pt;border-bottom:solid #000000 0.68181825pt;border-top:solid #000000 0.68181825pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.87 </td></tr><tr><td style="border-left:solid #000000 0.68181825pt;border-right:solid #000000 0.68181825pt;border-bottom:solid #000000 0.68181825pt;border-top:solid #000000 0.68181825pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nippon India Nivesh Lakshya Fund - Direct Plan </td><td style="border-left:solid #000000 0.68181825pt;border-right:solid #000000 0.68181825pt;border-bottom:solid #000000 0.68181825pt;border-top:solid #000000 0.68181825pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.07 </td></tr><tr><td style="border-left:solid #000000 0.68181825pt;border-right:solid #000000 0.68181825pt;border-bottom:solid #000000 0.68181825pt;border-top:solid #000000 0.68181825pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">SBI Long Duration Fund - Direct Plan </td><td style="border-left:solid #000000 0.68181825pt;border-right:solid #000000 0.68181825pt;border-bottom:solid #000000 0.68181825pt;border-top:solid #000000 0.68181825pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.53 </td></tr></tbody><tbody></tbody></table> Source: Value Research Should you invest in long duration debt funds? Interest rates have seen a prolonged pause and thus fixed income proponents have been waiting for a pivot in stance. However, investors are advised to go with a cautious approach. “If the interest rates go up or the yields go up from here, one may see a negative return, for a short period of time, but if one has a two to three year time horizon, the interest should come down and one should generate good returns,” says Sarkar. The final word Selecting a good long duration debt fund requires careful consideration of various factors. “One must review the fund's portfolio holdings to understand the types of securities it invests in, including government bonds, corporate bonds, and other debt instruments. Further, one should examine the credit quality of the portfolio by reviewing the credit ratings assigned to the underlying securities,” says Gupta. One might also evaluate the fund's performance by comparing it to both its benchmark and other funds in the long-duration category. Individuals contemplating long-term investments should thoroughly evaluate their risk tolerance, investment objectives, and time horizon before deciding to invest in these funds.

Explained: Is this the right time to invest in long duration debt funds?

<keyword id="30067" type="General" weightage="90" keywordseo="rbi" source="Orion">RBI</keyword> Governor Shaktikanta Das-headed Monetary Policy Committee (MPC) started its three-day meeting on Monday amid expectations of a smaller 25 basis points rate increase or a pause on the rate hiking spree that started in May last year to check inflation. The decision of the six-member rate setting panel will be announced by the Governor on Wednesday. With retail inflation showing signs of moderation and remaining below the <keyword id="6354335" type="General" weightage="50" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword>'s 6 per cent upper tolerance level, and projected slowdown in GDP growth in the next fiscal starting April, experts are of the opinion that the central <keyword id="15308630" type="TOPIC" weightage="60" keywordseo="Bank" source="TOPIC" sourcekeytype="finance,investopedia" meta.keywordsubtype="null" meta.msid="93495953" meta.seopath="b/bank" meta.entityname="Bank" meta.hostid="153" meta.entityid="bank">bank</keyword> may only opt for a 25 basis points hike in the key interest rate. Another opinion is that the RBI may press the pause button on rate hike on Wednesday itself. "We expect the RBI to pause in February policy," <keyword id="6354731" type="DOMAIN" weightage="20" keywordseo="state-bank-of-india" botkeyword="" source="ET" sourcekeytype="COMPANY" meta.keywordsubtype="EQ" meta.aliasname="state bank of india" meta.entityname="State Bank of India" meta.entityid="11984" meta.seoname="state-bank-of-india">State Bank of India</keyword>'s Economic Research Department said in a report titled 'Prelude to MPC Meeting on Feb 6-8, 2023'. In the current rate cycle, it said that rate actions, both hikes and cuts, have been largely synchronised with actions of the monetary authorities in the developed nations. The stance, the <keyword id="13222" type="DOMAIN" weightage="20" keywordseo="sbi" botkeyword="" source="ET" sourcekeytype="COMPANY" meta.keywordsubtype="EQ" meta.aliasname="sbi" meta.entityname="State Bank of India" meta.entityid="11984" meta.seoname="state-bank-of-india">SBI</keyword> report said could continue to be withdrawal of accommodation, even as <keyword id="15316241" type="TOPIC" weightage="60" keywordseo="Liquidity" source="TOPIC" sourcekeytype="economy,investopedia" meta.keywordsubtype="null" meta.seopath="l/liquidity" meta.entityname="Liquidity" meta.hostid="153" meta.entityid="liquidity">liquidity</keyword> is close to neutral. "Even though the RBI could pause as it allows past rate actions to work with long and variable lags, the RBI could still guide the markets with a rate action in future that will be purely data dependent," it said. According to the report, 6.25 per cent <keyword id="15378998" type="TOPIC" weightage="60" keywordseo="Repo-Rate" source="TOPIC" sourcekeytype="economy,budget,investopedia" meta.keywordsubtype="null" meta.seopath="r/repo-rate" meta.entityname="Repo Rate" meta.hostid="153" meta.entityid="repo-rate">repo rate</keyword> could be the terminal rate for now. In its December monetary policy review, the central bank raised the key <keyword id="15316469" type="TOPIC" weightage="60" keywordseo="Benchmark" source="TOPIC" sourcekeytype="mutual-fund,investopedia" meta.keywordsubtype="null" meta.seopath="b/benchmark" meta.entityname="Benchmark" meta.hostid="153" meta.entityid="benchmark">benchmark</keyword> interest rate (repo) by 35 basis points (bps) after delivering three back-to-back increases of 50 bps. Since May last year, the RBI has increased the short-term lending rate by 225 basis points to contain inflation, mostly driven by external factors, especially global <keyword id="15312689" type="TOPIC" weightage="60" keywordseo="Supply" source="TOPIC" sourcekeytype="economy,investopedia" meta.keywordsubtype="null" meta.msid="93027566" meta.seopath="s/supply" meta.entityname="Supply" meta.hostid="153" meta.entityid="supply">supply</keyword> chain disruption following the Russia-Ukraine war outbreak. Madan Sabnavis, Chief Economist at <keyword id="6358007" type="DOMAIN" weightage="20" keywordseo="bank-of-baroda" botkeyword="" source="ET" sourcekeytype="COMPANY" meta.keywordsubtype="EQ" meta.aliasname="bank of baroda" meta.entityname="Bank of Baroda" meta.entityid="12040" meta.seoname="bank-of-baroda">Bank of Baroda</keyword>, said the <keyword id="15313867" type="TOPIC" weightage="60" keywordseo="Credit" source="TOPIC" sourcekeytype="finance,investopedia" meta.keywordsubtype="null" meta.msid="92548261" meta.seopath="c/credit" meta.entityname="Credit" meta.hostid="153" meta.entityid="credit">credit</keyword> policy will be announced against the background of both the Budget that was presented as well as the Economic Survey that served as the prelude to it. The Budget has maintained a virtually unchanged borrowing programme while the Survey has pointed to the persistence of higher interest rates in the coming year. While inflation has been trending downwards, there has been a tendency for <keyword id="15376162" type="TOPIC" weightage="60" keywordseo="Core-Inflation" source="TOPIC" sourcekeytype="investopedia" meta.keywordsubtype="null" meta.seopath="c/core-inflation" meta.entityname="Core Inflation" meta.hostid="153" meta.entityid="core-inflation">core inflation</keyword> to remain sticky. Inflation has come down mainly due to lower food inflation which can be volatile. Also, the decision taken this time cannot be reversed soon, he said. "Under these conditions, the RBI will pitch for another 25 bps hike in the repo rate which will be the last in this cycle, and then pause. The stance however may change from the withdrawal of accommodation to neutral as liquidity is no longer in a large surplus. In fact, based on developments that take place, there may be need to infuse liquidity during the course of the year," Sabnavis opined. The RBI has been tasked to ensure that retail inflation remains at 4 per cent with a margin of 2 per cent. However, it failed to keep the inflation rate below six per cent for three consecutive quarters beginning January 2022. However, the retail inflation based on the Consumer Price Index (CPI) has shown signs of moderation in November and December as it fell below the RBI's upper tolerance level of 6 per cent. The MPC consists of three RBI officials and three external members appointed by the central government. The external members are Shashanka Bhide (Honorary Senior Advisor, National Council of Applied Economic Research, Delhi); Ashima Goyal (Emeritus Professor, Indira Gandhi Institute of Development Research, Mumbai); and Jayanth R Varma (Professor, Indian Institute of Management, Ahmedabad). Apart from the Governor, the RBI officials on the panel are Rajiv Ranjan (Executive Director) and Michael Debabrata Patra (Deputy Governor). SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/gold-plunges-574-silver-plummets-2113-amid-weak-global-trends/articleshow/97644748.cms">Gold plunges ₹574, silver plummets ₹2,113 amid weak global trends</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/banks/news/bandhan-bank-hikes-interest-rates-on-fixed-deposits/articleshow/97646005.cms">Bandhan Bank hikes interest rates on fixed deposits</a>

RBI's Monetary Policy Committee meeting starts amid expectations of lower rate hike

<ul><li>Amidst the rising cost of properties and the cumulative 250 bps rate hikes by the <keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword> in the last one year and more, affordable housing buyers have taken a blow. </li><li>With a steady interest rate environment, potential buyers of affordable homes may be encouraged to proceed with their home buying plans. </li><li>Banks may potentially be required to provide borrowers with clearer and more detailed information about how their loan EMIs are calculated and how they may vary over time. </li></ul>The Reserve Bank of India keeping lending (repo) rates unchanged is nothing but good news for aspiring <keyword id="6371902" type="General" weightage="20" keywordseo="home-buyers" source="Orion">home buyers</keyword>, especially for those in the middle income categories who aspire to buy a home. <keyword id="1263554" type="General" weightage="20" keywordseo="affordable-home" source="Orion">Affordable home</keyword> buyers were at the receiving end of rate hikes for more than a year before the RBI paused hiking rates. Now, the third successive pause gives buyers a better planning window, especially as economists don’t expect further hikes till the end of the year. “By maintaining a steady interest rate environment, there is a hopeful projection that these potential buyers will be encouraged to proceed with their home buying plans,” says Pradeep Aggarwal, founder and chairman, Signature Global, a real estate developer. As per research by ANAROCK, a real estate service provider, for homebuyers with a ₹30 lakh loan of a 20 year tenure, EMIs jumped up by 20% in the last two years. <keyword id="6354730" type="General" weightage="20" keywordseo="home-loan" source="Orion">Home loan</keyword> borrowers who were paying an EMI of approximately ₹22,700 in July 2021 are now paying approx. ₹7,300 - an increase of approx. ₹4,600 per month. “While home prices have also risen by 8-15% over the last twelve months, this increase is likely to be kept in balance by the countervailing forces of the unchanged policy rates. With interest rates holding steady, affordability synergies will continue to persist and thus support the homebuyer momentum and residential sales during the coming quarters,” says Samantak Das, chief economist and head research &amp; REIS India, JLL, another real estate service provider. Greater transparency on EMIs for floating rate loans The RBI Governor during his monetary policy speech said that steps will be taken to bring greater transparency to equated monthly instalments of floating rate loans. Says Das, “When there is change in policy rates and interest rates change, banks normally change the tenure without intimating the customers. Only when the EMI changes, is the customer intimated. What this would mean is that even for a tenure change banks need to adhere to a framework and intimate customers.” While specifics have not been provided in the monetary policy, such transparency can mean a number of things. “For example, banks may potentially be required to provide borrowers with clearer and more detailed information about how their loan EMIs are calculated and how they may vary over time,” says Anuj Puri, Chairman, ANAROCK Group. Lenders may also need to provide borrowers with comprehensive information on how the interest rate for their floating rate loan is determined. This may involve specifying the benchmark rate and explaining how the borrower's interest rate is derived from the benchmark rate, including any additional margin or spread added by the lender. “Borrowers could potentially expect a breakdown of their EMI components, including the portion allocated to interest and principal repayment, to help them understand how their monthly payment is distributed and how much is going towards reducing the principal amount owed versus paying interest charges,” says Puri. In the event that the interest rate for a variable-rate loan fluctuates, banks might need to inform borrowers in a timely manner about the alteration, including its effect on their EMIs. This procedure would enable borrowers to remain updated regarding alterations in their repayment commitments and manage their financial plans accordingly.

With RBI MPC not hiking rates, affordable home buyers have clearer planning trajectory

<ul><li><keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword>’s pause could be a prolonged one as the path of monetary policy remains fraught with risks. </li><li>Surprise rate hikes by the Bank of Australia and Bank of Canada in June, after a pause suggests central banks are not yet done with the hike cycle. </li><li>Market expects RBI to review its stance again in August, if monsoon is normal and risks to commodity prices abate. </li></ul>The road ahead for monetary policy continues to remain fraught with risks. As expected, the rate setting committee of the Reserve Bank of India held on to benchmark rates yet again at its June review, but there is no change in its stance. The Reserve Bank of India <keyword id="6375120" type="General" weightage="20" keywordseo="monetary-policy-committee" source="Orion">Monetary Policy Committee</keyword> retained the <keyword id="43352" type="General" weightage="20" keywordseo="repo-rate" source="Orion">repo rate</keyword>, or the lending rate of the central bank, at 6.5%, but this is not a pivot. This is the second straight policy in which rate has been held showing that the rate hike cycle may have peaked for now. Markets were penciling in a rate cut towards the end of this year, as the inflation print in April came in at 4.7%. “Being in the inflation tolerance band is not enough. Our goal is to bring inflation to 4%,” <keyword id="64190" type="General" weightage="20" keywordseo="rbi-governor" source="Orion">RBI Governor</keyword> Shaktikanta Das said on Thursday. Fixed income experts and economists believe that all expectations of a rate cut are off the table for now, as risks to both growth and inflation remain elevated. Economists were unanimous in their expectations ahead of the policy statement on a pause. However, the surprise rate hikes announced by the Bank of Australia and Bank of Canada in June have spooked markets. Bank of Australia too has hiked rates in June to 4.1% this month while Bank of Canada benchmark hiked rates to 4.75% hours before RBI’s announcement. Economists are of the view that the RBI too is keeping the door open for further hikes, given that risks to inflation are not yet over. It is noteworthy that the pause in rate hike comes after the benchmark rate was hiked by 250 basis points since May 2022 and a breather was only taken in the April policy this year. Like many other developed economies, the central bank’s prolonged pause is now a certainty. Rate Cut Hopes Delayed Further Even though RBI has lowered its inflation projection for FY24 at 5.1% from the earlier estimates of 5.2%, the risks are still elevated. “We will keep Arjuna’s eye on inflation,” said Das. He added, “MPC will remain vigilant and will take further policy action as and when required to keep inflation expectations anchored and bring inflation down to 4%” Economists are interpreting this as a prolonged pause. Says Lakshmi Iyer, CEO-Investment &amp; Strategy, Kotak Investment Advisors, “Given global macro headwinds still visible, the members did not feel appropriate to change their stance. It looks like the market wait for rate cuts just got longer, as we saw Canada policy makers announce a surprise rate hike. Key incoming data dependency will continue to be the order of the day. Policy maker guard rails remain. Bonds may continue its sideways movement and continue to track global bond yields specifically US treasuries.” India may be in a sweet spot, but since global central banks are still hawkish and clearly not done with the hikes, RBI has chosen to retain the pause for now. Economists expect that the MPC will take a call in August 2023, the RBI will have enough data on El Nino and its potential impact on inflation before it decides on any rate cut. BY August, the Fed funds there will be clarity on the path of the US Fed’s fund rate too. If both these factors remain benign, then the <keyword id="3929464" type="General" weightage="20" keywordseo="rbi-mpc" source="Orion">RBI MPC</keyword> could look at changing its stance to “neutral” in August. Market participants are unanimous on the possibility of a prolonged pause. Naveen Kulkarni, Chief Investment Officer, Axis Securities PMS, expects an extended pause on interest rates from the regulator in the near future. While the inflation is expected to hover above the tolerance limit in FY24, the RBI has marginally reduced its inflation forecast to 5.1% vs 5.2% in the previous policy. Growth And Inflation Are Evenly Balanced For Now India’s economy exited FY23 with GDP growth of 7.2%, which was better than estimates. This combined with retail inflation dipping to an 18-month low, both growth and inflation appear to be evenly balanced. While rural demand continues to be weak, the recent hikes in MSP and normal monsoon could come to the rescue. However, there still may be some spillover risks to inflation. Keeping the risks in mind, the RBI has kept its growth projection for the current financial year (FY24) unchanged at 6.5%. This comes at the backdrop of the World Bank revising India’s GDP forecast downwards by 30 bps earlier in the week. The Indian economy and financial sector stand out as strong and resilient, and domestic macroeconomic fundamentals are strengthening. Rural demand is on a revival path,” said Das adding, “GDP growth in 2022-23 turned out to be stronger than anticipated and is holding up well. Highlights financial stability concerns, impact of rate hikes.”

It’s a pause, not a pivot by RBI: Rate cut hopes pushed out for now

<ul><li>The <keyword id="30067" type="General" weightage="100" keywordseo="rbi" source="Orion">RBI</keyword> has kept its growth projection for the current financial year unchanged at 6.5%</li><li>“We will keep Arjuna’s eye on inflation,” says Governor Das</li><li><keyword id="3929464" type="General" weightage="20" keywordseo="rbi-mpc" source="Orion">RBI MPC</keyword> votes in favor of maintaining the ‘withdrawal of accommodation’ stance looking at the global macro economic situation.</li></ul>The Reserve Bank of India <keyword id="6375120" type="General" weightage="20" keywordseo="monetary-policy-committee" source="Orion">Monetary Policy Committee</keyword> in its June policy has decided to hold the <keyword id="43352" type="General" weightage="20" keywordseo="repo-rate" source="Orion">repo rate</keyword>, or the lending rate of the central bank, at 6.5%. This is the second straight policy in which rate has been held showing that the rate hike cycle is now truly over. Consequently, the bank rate and the Marginal Standing Facility (MSF) rate has been kept unchanged at 6.75% <keyword id="64190" type="General" weightage="20" keywordseo="rbi-governor" source="Orion">RBI Governor</keyword> Shaktikanta Das also said that the MPC voted in favour (5 out of 6 members) of holding its policy stance at “withdrawal of accommodation”. The market was speculating whether the stance would see a positive change but Das highlighted that inflation still remains above the 4% target and is expected to stay so till the year end. “Being in the inflation tolerance band is not enough. Our goal is to bring inflation to 4%,” said Das in this announcement. It is noteworthy that the pause in rate hike comes after the benchmark rate was hiked by 250 basis points since May 2022 and a breather was only taken in the April policy this year. <cmsannotation type="cmsannotation" annotationid="Growth projection" comment="subhead" text="Growth projection">Growth projection</cmsannotation> <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#000000;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Period </td><td style="border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#000000;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Current (%) </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#000000;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Earlier (%) </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q1FY24 </td><td style="border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">8 </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.8 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q2FY24 </td><td style="border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.5 </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.2 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q3FY24 </td><td style="border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">6 </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.1 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q4FY24 </td><td style="border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.7 </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.9 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY24 (overall) </td><td style="border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.5 </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.5 </td></tr></tbody></table> The RBI has kept its growth projection for the current financial year (FY24) unchanged at 6.5%. This comes at the backdrop of the World Bank revising India’s GDP forecast downwards by 30 bps earlier in the week. The Indian economy and financial sector stand out as strong and resilient, and domestic macroeconomic fundamentals are strengthening. Rural demand is on a revival path,” said Das adding, “GDP growth in 2022-23 turned out to be stronger than anticipated and is holding up well. Highlights financial stability concerns, impact of rate hikes.” <cmsannotation type="cmsannotation" annotationid="Inflation projection" comment="subhead" text="Inflation projection">Inflation projection</cmsannotation> <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#000000;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Period </td><td style="border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#000000;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Current (%) </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#000000;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Earlier (%) </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q1FY24 </td><td style="border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">4.6 </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.1 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q2FY24 </td><td style="border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.2 </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.4 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q3FY24 </td><td style="border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.4 </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.4 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q4FY24 </td><td style="border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.2 </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.2 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY24 (overall) </td><td style="border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.1 </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.2 </td></tr></tbody></table> RBI has trimmed its current financial year (FY24) inflation projection by 10 bps to 5.1%. “We will keep Arjuna’s eye on inflation,” said Das, making it very clear that the central bank has inflation control as its top priority. He added, “MPC will remain vigilant and will take further policy action as and when required to keep inflation expectations anchored and bring inflation down to 4%” <cmsannotation type="cmsannotation" annotationid="The Reading" comment="subhead" text="The Reading">The Reading</cmsannotation> Economists had more or less predicted a status quo policy and continue to believe that rate hikes are over for this year. Suvodeep Rakshit, senior economist, Kotak Institutional Equities said after the policy, "We believe there are some downside risks to growth. We believe that rate cuts will be contingent on significant divergence in growth-inflation prospects. We maintain our call that the RBI will be on an extended pause." According to Indranil Pan, Chief Economist, Yes Bank, the upside surprise seen in the latest released GDP numbers Q4FY23 show that the economy is resilient even as private consumption expenditure remains on the slow track.

RBI MPC holds interest rate as expected but stance maintained at ‘withdrawal of accommodation’

<ul class="summary-list"><li>China cut key interest rates after its leaders met at a Communist Party plenum last week.</li><li>China's second-quarter economic data missed government targets and analyst expectations.</li></ul>The world's second-largest economy cut several short- and long-term interest rates on Monday to prop up its sluggish, debt-burdened economy. The People's Bank of China cut its seven-day reverse repo rate by 10 basis points, from 1.8% to 1.7%, and its standing lending facility — given to commercial banks to supply temporary cash — by the same margin.China also cut its benchmark bank lending rates by 10 basis points, including its one-year loan prime rate and five-year LPR, which went from 3.45% to 3.35% and 3.95% to 3.85%, respectively.The surprise cuts come after the country reported its second-quarter economic data last week, showing economic growth up 4.7% from a year ago, missing this year's goal of 5.0%. The numbers also fell below analysts' expectations.China's strong exports continue to drive its economic growth as <a target="_blank" href="https://www.businessinsider.com/china-economy-second-quarter-gdp-growth-weak-demand-consumption-exports-2024-7">consumer sentiment lags</a>, even as <a target="_blank" href="https://www.businessinsider.com/china-household-deposits-savings-luxury-consumer-demand-slowdown-economy-outlook-2024-7">household deposits hit record numbers last month</a>. Retail sales expanded just 2% year-over-year in June.The rate cuts follow a meeting of the country's leaders last week at the Communist Party's Central Committee, a plenum that occurs every five years. "China's Third Plenum put 'high-quality development' as the top priority. Policy makers vowed to achieve 2024 growth target and manage risks of property, local govt debts, and smaller banks," Bank of America analysts wrote on Monday. Other commentators noted that the reforms promised at the plenum and the rate cuts are positive developments, but not enough to convince skittish investors that China's problems are behind it. "[T]here still appears to be a tension between policies aimed at boosting economic security and expanding the supply-side of the economy, and those aimed at giving market forces a greater role and rebalancing growth toward consumption," Capital Economics wrote following the plenum last week. China released a policy document following the meeting that outlines goals to improve business sentiment as the country's economy faces deflation, debt, a <a target="_blank" href="https://www.businessinsider.com/china-outlook-home-prices-slumped-beijing-property-crisis-real-estate-2024-4">real estate crisis,</a> and tense international trade relations with other large economies.

China slashes interest rates in a surprise move to boost its slumping economy

<ul><li>A combination of repo rate hikes and a cool down in inflation has helped turn real interest rates positive, which remained negative for ten consecutive months in 2022. </li><li>Industry and experts have called on the <keyword id="30067" type="General" weightage="100" keywordseo="rbi" source="Orion">RBI</keyword> to pause rate hikes to promote ‘sustainable growth’. </li><li>RBI governor <keyword id="6359111" type="General" weightage="50" keywordseo="shaktikanta-das" source="Orion">Shaktikanta Das</keyword>’ commentary suggests that the central bank’s battle against inflation is not over yet. </li><li>A pause might be on the cards as Das waits for the impact of rate hikes to flow through the system. </li></ul>The Reserve Bank of India<a href="https://www.businessinsider.in/finance/news/rbi-hikes-interest-rates-by-25-basis-points-to-6-5-says-core-inflation-remains-sticky/articleshow/97716217.cms"> delivered its sixth rate hike</a> since May 2022 on Wednesday, raising the repo rate to 6.5%, marking a 250 basis points increase as it continues to keep ‘Arjuna’s eye’ on inflation. Despite real interest rates having turned positive after several months, RBI’s battle against ‘sticky’ inflation does not seem to be over yet. In a press conference<a href="https://www.businessinsider.in/finance/news/rbi-hikes-interest-rates-by-25-basis-points-to-6-5-says-core-inflation-remains-sticky/articleshow/97716217.cms"> announcing</a> the rate hike decision, RBI governor Shaktikanta Das made an observation that the central bank will continue to withdraw accommodation and bring inflation to its acceptable levels. “The stickiness of core or underlying inflation is a matter of concern. We need to see a decisive moderation in inflation. We have to remain unwavering in our commitment to bring down inflation,” Das said, underlining that the bank’s primary focus is taming inflation. <cmsannotation type="cmsannotation" annotationid="Positive real interest rates mean your money is finally not losing value after ten consecutive months in 2022" comment="subhead" text="Positive real interest rates mean your money is finally not losing value after ten consecutive months in 2022">Positive real interest rates mean your money is finally not losing value after ten consecutive months in 2022</cmsannotation> Economists and experts believe that Das’ current priority is price stability over economic growth, despite real interest rates turning positive. “Although real rates have turned positive and inflation has moderated, RBI is symbolically choosing price stability over growth,” said Amar Ambani, group president &amp; head – institutional equities, Yes Securities. Interest rates are considered to be positive when the benchmark interest rates are higher than the inflation. A positive interest rate means that your money is appreciating in value when you deposit it in a bank. In 2022, until November, interest rates were negative, meaning your money lost its value if kept as a deposit in a bank. However, that has changed now, and the real interest rates are closer to 1%, which analysts believe is good for growth. RBI has projected a 1-year ahead inflation rate of 5.6% (Q4 FY24), and compared to the current repo rate of 6.5%, the real interest rate stands at 0.9%. <cmsannotation type="cmsannotation" annotationid="Industry, experts ‘hopeful’ this is the last rate hike" comment="subhead" text="Industry, experts ‘hopeful’ this is the last rate hike">Industry, experts ‘hopeful’ this is the last rate hike</cmsannotation> Despite Das reiterating that the central bank’s priority is to tame inflation further, especially the ‘sticky’ core inflation, industry and experts are hoping that Wednesday’s rate hike is RBI’s last, in this cycle. “In line with the other broad objective of sustainable growth, we want to believe this is the last rate hike by the RBI,” said Assocham secretary general Deepak Sood. However, Das’ stance was hawkish, suggesting that he’s done yet with rate hikes, even though there could be a pause as the central bank waits to see the impact of rate hikes percolate through the economy. Despite a cool down in inflation, Das said that it still remains above the RBI’s 4% target. He also underlined that an uncertain geopolitical environment means that the central bank will continue to keep a close eye on inflation and accordingly calibrate its rate hike action. “The outlook is clouded by uncertainties from geopolitical tensions, global financial market volatility, rise in non-commodity prices and volatile crude oil prices,” Das said. <cmsannotation type="cmsannotation" annotationid="Das may not be done yet, but he may pause for a while" comment="subhead" text="Das may not be done yet, but he may pause for a while">Das may not be done yet, but he may pause for a while</cmsannotation> While his commentary was hawkish, Das noted that the rate hikes since May 2022 are still “working their way through the system”. “The Monetary Policy Committee (MPC) was of the view that further calibrated monetary policy action is warranted to keep inflation expectations anchored, break the persistence of core inflation and thereby strengthen the medium-term growth prospects,” Das said, underlining the bank’s single-minded focus on bringing down inflation. However, the quantum of hikes, which have reduced from 50 bps to 35 bps and now to 25 bps, coupled with Das’ comments that the impact of rate hikes so far has ‘not percolated’ suggests that RBI may pause for the time being. “We expect a long pause from the RBI to allow for the cumulative 250 bps increase in the repo rate to filter through the economy. Needless to mention, interest rate hikes work with a lag effect of 2-3 quarters, so its full impact on growth has yet to be seen,” Ambani added. To sum up, while cooler inflation and higher repo rates have resulted in real interest rates turning positive, Das has not declared victory against inflation. However, Das might take a pause to see the full impact of rate hikes flow through the economy before taking his next call. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/adani-group-market-cap-rises-on-wednesday-led-by-adani-enterprises/articleshow/97726879.cms">Adani group market cap jumps ₹42,000 crore on Wednesday in Adani Enterprises-led rally</a> <a href="https://www.businessinsider.in/finance/news/rbi-hikes-interest-rates-by-25-basis-points-to-6-5-says-core-inflation-remains-sticky/articleshow/97716217.cms">RBI hikes interest rate by 25 bps to 6.5%, says core inflation remains ‘sticky’</a> <a href="https://www.businessinsider.in/business/telecom/news/bharti-airtel-q3-net-profit-jumps-91-to-1588-crore-misses-estimates/articleshow/97698481.cms">Bharti Airtel Q3 net profit jumps 91% to ₹1,588 crore, misses estimates</a>

RBI continues to ‘watch inflation’ closely even as industry hopes for a pause

The <keyword id="19949639" type="General" weightage="100" keywordseo="Rupee" source="keywords">rupee</keyword> inched up 1 paisa to 83.43 against the <keyword id="19949640" type="General" weightage="20" keywordseo="US-dollar" source="keywords">US dollar</keyword> in early trade on Thursday on the back of a weak American currency and positive domestic equity markets. <keyword id="20024982" type="General" weightage="20" keywordseo="Forex-traders" source="keywords">Forex traders</keyword> said an upward movement in the crude oil prices resisted a sharp rise in the Indian currency even as investors moved cautiously ahead of the RBI's monetary policy decision to be announced on Friday. At the interbank foreign exchange market, the local unit opened at 83.40 and slipped to 83.43 against the greenback, trading 1 paisa higher from its previous close. On Wednesday, the domestic currency settled 7 paise higher at 83.44 against the dollar. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.15 per cent lower at 104.06. Analysts attributed the weakness in the dollar index to a sharp fall in US Treasury yields after the latest data showed private sector job growth in May was slower than estimated, raising expectations of an <keyword id="20071379" type="General" weightage="20" keywordseo="interest-rate-cut" source="keywords">interest rate cut</keyword> by the US Federal Reserve. They said that market participants are expected to take further cues from the weekly US jobs data to be released later in the day. Also, they said the decision of RBI's rate-setting panel to impact investors' sentiment. The Monetary Policy Committee (MPC) of RBI on Wednesday started its three-day deliberations to decide the next monetary policy. Reserve Bank Governor Shaktikanta Das will announce the decisions on Friday. "The <keyword id="19899810" type="General" weightage="20" 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> is set to keep its repo rate at 6.5 per cent at its June 7 review. Policy is turning more restrictive as cooling inflation pushes up real rates, hurting growth," said Amit Goel, Co-Founder &amp; Chief Global Strategist, Pace 360. He further said the RBI's record dividend payment of Rs 2.1 lakh crore to the government for FY24 may alleviate concerns about the growth outlook. Brent crude futures, the global oil benchmark, advanced 0.38 per cent to <keyword id="54123" type="General" weightage="20" keywordseo="USD" source="Orion">USD</keyword> 78.71 per barrel. On the domestic equity market, the 30-share BSE Sensex climbed 303.91 points or 0.41 per cent to 74,686.15 in early trade. The NSE Nifty went up 70.25 points or 0.31 per cent to 22,690.60. Foreign investors were net sellers of Indian equities on Wednesday as they offloaded shares worth Rs 5,656.26 crore on a net basis. FIIs bought shares worth Rs 21,012.72 crore and sold equities worth Rs 26,668.98 crore in the cash segment. India's service sector growth eased to a five-month low in May amid fierce competition, price pressures and a severe heatwave, even as new orders from international markets expanded at the steepest pace in a decade, according to a monthly survey released on Wednesday. The seasonally adjusted HSBC India Services Business Activity Index fell to 60.2 in May from 60.8 a month earlier, its lowest mark since last December.

You Searched For "benchmark repo rate" and got 13 results

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RBI MPC holds interest rate as expected but stance maintained at ‘withdrawal of accommodation’

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China slashes interest rates in a surprise move to boost its slumping economy

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RBI continues to ‘watch inflation’ closely even as industry hopes for a pause

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