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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

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

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

Highlights of RBI's monetary policy statement

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

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

RBI has many other tools to revive growth, not just interest rates: Das

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div></div></div>In 2015, monetary policy changes have been the biggest market movers.
The headline events have been from the European Central Bank, which <a href="http://www.businessinsider.com/ecb-meeting-january-2015-2015-1">announced a new quantitative easing program</a> in January; the Swiss National Bank, <a href="http://www.businessinsider.com/the-swiss-franc-is-rocketing-upwards-2015-1">which unexpectedly removed the peg</a> of the Swiss franc against the euro; and the Danish central bank <a href="http://www.businessinsider.com/danish-central-bank-cuts-rates-2015-2">cutting interest rates</a> four times in just three weeks. 
And after <a href="http://www.businessinsider.com/january-jobs-report-2015-2">another strong jobs report from the US</a>, markets are waiting to see if the Federal Reserve will buck this trend and raise interest rates this year.
In a note to clients summing up the week's events, economists at Deutsche Bank give a quick overview of this easing trend in global monetary.
And in what might come as a surprise to you, it all started in Uzbekistan.
From Deutsche Bank:
Fashion trends are set in Milan or Paris but the monetary policy winds blow from Tashkent. The Uzbekistan central bank set the tone for 2015 with the year' first interest rate cut on 5 January. Since then half the G20 has followed, including Australia and China this week. Markets are enthralled. Equity indices in the ten G20 countries to have eased this year are up seven per cent on average, handily beating the three per cent gains for the other ten. However, the superior stock market gains are accompanied by an average four per cent fall against the dollar in the currencies of policy easing nations, whereas exchange rates for the others remain unchanged. The net result: stock returns in dollar terms for those following the "Tashkent Trend" and those bucking it average the same two per cent this year.

The monetary policy winds blow from Tashkent

<div style="float: right; margin: 15px 0 20px 20px;"><table border="0" cellspacing="0" cellpadding="0"><tbody><tr><td colspan="2"><a href="https://static-ssl.businessinsider.com/category/chart-of-the-day"> </a></td></tr><tr><td><a href="http://www.businessinsider.com/category/chart-of-the-day"></a></td><td><a href="http://www.businessinsider.com/equity-correlation-during-global-sell-off-2015-9"></a></td></tr></tbody></table></div> The big question hanging over markets right now is the Federal Reserve. Will the Fed raise interest rates in September? October? December? Never?But for all of the hand-wringing about when the Fed's first move comes, monetary policy around the world is still very, very easy. Take, for example, <a href="http://www.businessinsider.com/mario-draghis-september-ecb-press-conference-2015-9">Mario Draghi's comments earlier on Thursday</a> that the European Central Bank is ready to act if Europe's economy falters. In a note to clients earlier this week, Morgan Stanley wrote that, "despite some differentiation in the direction of policy decisions both across and within regions, global monetary policy should remain very expansionary as central banks continue to provide support for the prevailing trend of weak aggregate demand."And so while the Fed, as well as the Bank of England, appears closer to tightening rather than loosening monetary policy, Morgan Stanley says that on balance, policy around the will likely skew towards easier policy as inflation and growth remains subdued. <div class="KonaFilter image-container display-table"><div><div class="image">Morgan Stanley</div></div></div> <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/krugman-fed-should-wait-2014-9">KRUGMAN: Wall Street Is Wrong, Janet Yellen Is Making Exactly The Right Move On Inflation</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="UxbWk4cDriersVmBz2Vikkgxw8SVgpLV" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

The state of global monetary policy in one chart

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

NEW DELHI: The government on Sunday left it to RBI to decide on <keyword id="6371181" type="UNKNOWN" weightage="20" keywordseo="interest-rates">interest rates</keyword> even as the two have begun discussions on putting in place a new monetary policy framework, which is a fresh mechanism to fix rates. 
 
While the government wants Parliament to set the inflation target under the proposed plan, RBI has already gone ahead and begun work towards a glide path, which targets 8% retail inflation by next January and 6% by January 2016. 
 On Sunday, <keyword id="6355261" type="POSITION" weightage="20" keywordseo="Finance-minister">finance minister</keyword> <keyword id="42575" type="PERSON" weightage="20" keywordseo="Arun-Jaitley">Arun Jaitley</keyword>, who spoke at the RBI board meeting, did not comment directly on RBI's plan but made it clear that it was the central bank, which will decide on rates. "On last two occasions RBI has announced its policy on interest rates, I had, on the same evening, issued clear statement. I think that is very clear. This is the issue which the Reserve Bank decides and I am sure they will factor in various circumstances," he told reporters after meeting. 
 
Although some viewed it as a "prod" from the government to cut rates, since taking charge Jaitley has maintained that RBI is the final authority on deciding when the time is ripe to tweak rates. 
 "<keyword id="130" type="POSITION" weightage="20" keywordseo="Governor">Governor</keyword>, RBI has already stated that RBI will not hold interest rates high any longer than is necessary and if disinflation proceeds as warranted, there will eventually be room to cut rates. Going forward, the RBI should examine the liquidity situation, inflation and growth in setting policy rates," the <keyword id="25455" type="ORGANIZATION" weightage="20" keywordseo="finance">finance</keyword> minister had said on Tuesday, when RBI had left policy rates unchanged, while signaling more liquidity infusion into the system. 
 
 
 After the board meeting, RBI governor <keyword id="6358908" type="PERSON" weightage="20" keywordseo="Raghuram-Rajan">Raghuram Rajan</keyword> was more emphatic in saying that time was not ripe. "At this point, uncertainty is two way... Then, of course, if news come on either side we can change what the policy is. But, as of now we think the policy is on target. This is contingent on data coming in," he said. 
 In recent weeks, inflation, industrial production and trade data have been positive but RBI's main worry stems from <keyword id="67286" type="UNKNOWN" weightage="20" keywordseo="Food-inflation">food inflation</keyword> due to weak monsoon rains in several parts of the country. 
 
On the monetary policy framework, Rajan said that so far preliminary discussions have been held and indicated that a final outcome will take time.

New Monetary Policy Framework Under Way

There have been news reports the last few days about how Ben Bernanke, in his post-Fed Chair capacity, has been going around giving speeches, getting paid gobs of money in privet to hedge funders.
Obviously a lot of the focus has been on the fact that <a href="http://dealbook.nytimes.com/2014/05/20/after-fed-bernanke-offers-his-wisdom-for-a-big-fee/?_php=true&amp;_type=blogs&amp;_r=0">Bernanke is getting paid more</a> per speech than his annual salary as head of the Federal Reserve.
But a chart sent out to clients this morning from Torsten Slok sheds a different angle on what's going on.
The chart shows essentially that for the last several years, interest rates have been entirely driven by Fed communications. Rates fall when it looks like the Fed will stay low for a long time. Rates rise when the Fed hints that a rte hike might come sooner.
<div class="KonaFilter image-container display-table"><div><div class="image">Deutsche Bank</div></div></div>
 What's really interesting though is the final arrow in the chart: "Bernanke dinner talk."
One of the things Bernanke has been saying, reportedly, is that we'll be in a low rate environment for an extremely long time. And alas, <a href="http://www.businessinsider.com/ben-bernankes-bond-trade-2014-5">rates have been falling again</a>.
If the primary mechanism of the Fed is communication - and it is, since interest rates are at zero and they can't be cut further - and Bernanke's communications are still influencing the market, then it stands to reason that we have something of a shadow Fed chair, who is still conducting monetary policy, in secret meetings with wealthy investors.

Is Bernanke Secretly Still Conducting Monetary Policy?

New Delhi, Feb 16 () Foreign investors remained net buyers in the first half of February by investing a net sum of Rs 24,617 crore in the Indian markets due to positive sentiments post-Budget and the central bank's decision to maintain an accommodative stance in its recent monetary policy review. As per the depositories' data, Foreign Portfolio Investors (FPI) pumped in a net sum of Rs 10,426 crore into equities and Rs 14,191 crore into the debt segment between February 3 and 14. This adds up to a total net investment of Rs 24,617 crore. FPIs have been net buyers in the Indian markets since September 2019, the data showed. "The recovery in the markets post-Budget has largely been supported by DIIs (domestic institutional investors)," Ajit Mishra, vice-president (research) at Religare Broking Ltd, said. Finance Minister Nirmala Sitharaman in the Union Budget proposed to remove dividend distribution tax (DDT) on companies and, henceforth, the tax burden will be shifted to recipients at the applicable rate. Besides, she also said certain government securities will be open for foreign investors adding that the Centre plans to increase investment limit for FPIs in corporate bonds from 9 per cent to 15 per cent. However, the buying in equities has been nominal in February so far as "the subdued FPI sentiments are a result of coronavirus outbreak's impact on global economic growth," Mishra said. Citing reasons for investment in the bonds market, analysts said the investment was largely on the back of the RBI maintaining an accommodative stance in its recent monetary policy review. On the future course of FPI flows, Mishra said that "in the medium term, FPI flows should increase as the domestic economy rebounds and global concerns subside". SRS HRS

FPIs remain net buyers in first half of Feb, invest Rs 24,617 cr

<div class="image-container float_right" style="width:400px"><div class="image"></div><a href="https://twitter.com/suttonnick/status/309425346460135425/photo/1">Twitter / @suttonnick</a></div>The <a href="http://www.ft.com/intl/cms/s/0/6b3e85e4-8686-11e2-b907-00144feabdc0.html">FT is reporting</a> that British Chancellor of the Exchequer George Osborne will give <keyword id="223491" type="PERSON" weightage="60" keywordseo="Mark-Carney">Mark Carney</keyword>, the central banker set to take over as the head of the <keyword id="106488" type="CITY" weightage="60" keywordseo="Bank-of-England">Bank of England</keyword> in June, more flexibility with monetary policy than the BoE currently has.
That means changing the remit of the Bank of England.
The British government has come under fire for its policies of fiscal austerity lately as the economy continues to worsen.
According to the FT report, instead of reviewing fiscal policy, Osborne will stick to "fiscal conservatism and monetary activism."
FT correspondents Chris Giles and George Parker <a href="http://www.ft.com/intl/cms/s/0/6b3e85e4-8686-11e2-b907-00144feabdc0.html">have the scoop</a>:
Treasury officials are discussing proposals to change the remit of the bank to coincide with the arrival of Mr. Carney as the governor in July, reflecting frustration at what was seen as previous BoE intransigence.
...
In the Budget, the chancellor renews the inflation-targeting remit of the BoE and this gives Mr Osborne an opportunity – already sanctioned by Sir Mervyn King, the outgoing governor of the BoE – to review the 2 per cent inflation target and the bank’s operations.
Options include giving the Monetary Policy Committee greater time to bring inflation back to the 2 per cent target, giving the BoE a Federal Reserve-style dual mandate to target both employment and inflation, and even targeting cash spending in the economy rather than inflation.
Changing the central bank's remit has been a topic of discussion lately – ever since the announcement that Mark Carney, who has a strong track record with experimental monetary policy as head of the Bank of Canada, was set to take over the BoE.
Given the state of the British economy, the debate over both fiscal and monetary policy is hot right now.
It looks like the British government is hoping new monetary policy can shoulder the burden of reviving economic activity.
<a href="http://www.ft.com/intl/cms/s/0/6b3e85e4-8686-11e2-b907-00144feabdc0.html">Click here to read the full FT report &gt;</a>

You Searched For "post monetary policy review" and got 13 results

Rajan Calls On Modi Ahead Of Monetary Policy Review

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

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Highlights of RBI's monetary policy statement

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RBI has many other tools to revive growth, not just interest rates: Das

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The monetary policy winds blow from Tashkent

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The state of global monetary policy in one chart

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RBI MPC starts deliberations on monetary policy

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New Monetary Policy Framework Under Way

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FPIs remain net buyers in first half of Feb, invest Rs 24,617 cr

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