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RBI MPC Live Updates - RBI Monetary Policy Meeting: Premature to talk about recession in US but we are watchful, says Shaktikanta Das in post-MPC meet presser
08 Aug 2024 | 12:51:33 PM IST
Shaktikanta Das
Synopsis
RBI MPC Meet LIVE Updates: The Reserve Bank of India maintained its repo rate at 6.50% due to rising food prices. While core inflation eases, analysts predict a shift to a neutral stance in the next quarter amid global trends and India's upcoming economic season.
RBI MPC Meet LIVE: The Reserve Bank of India's Monetary Policy Committee (MPC) has decided to keep the repo rate unchanged at 6.5% for the ninth consecutive time. RBI Governor Shaktikanta Das announced the decision, which was made with a 4:2 majority. The MPC also decided to retain the withdrawal of accommodation stance. "We are seeing good convergence between market expectations and RBI policies; they are well aligned," Das stated.Interest Rates Unchanged: The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) has decided to keep its key interest rate and policy stance unchanged, aligning with expectations. The repo rate remains steady at 6.50% for the ninth consecutive time.
Show more- Withdrawal of Accommodation Stance: The MPC continues with its 'withdrawal of accommodation' stance, emphasizing the importance of vigilance against risks while maintaining current monetary policies.
- MPC Meeting and Decision: The MPC, comprising three RBI members and three external experts, met from August 5-7 and voted 4:2 to maintain the repo rate at 6.50%. The Standing Deposit Facility (SDF) rate stays at 6.25%, and both the Marginal Standing Facility (MSF) rate and Bank Rate remain at 6.75%.
- Focus on Inflation: Governor Shaktikanta Das highlighted that inflation, particularly food inflation, remains a concern, noting that food prices significantly impact headline inflation. Despite a drop in core inflation, vigilance is necessary.
- Inflation and Growth Projections: The RBI maintains the inflation forecast for FY25 at 4.5%, with quarterly adjustments: Q2 inflation revised to 4.4% (from 3.8%), Q3 to 4.7% (from 4.6%), and Q4 eased to 4.3% (from 4.5%). The GDP growth forecast for FY25 stays at 7.2%, with Q1 slightly reduced to 7.2%.
- Economic Outlook: A relief in inflation is anticipated due to good kharif sowing and a favorable southwest monsoon. The real GDP for Q1FY26 is projected at 7.2%.
- Forex Reserves and UPI Tax Payment: India's foreign exchange reserves reached a record high of $675 billion as of August 2. The RBI has increased the UPI tax payment limit from Rs 1 lakh to Rs 5 lakh per transaction.
- Digital Lending and Cheque Clearing Initiatives: The RBI plans to establish a public repository for digital lending apps to curb unauthorized lenders. Additionally, a proposal to introduce continuous cheque clearing has been made.
- Governor's Concerns: Shaktikanta Das emphasized the need to monitor mobile tariffs and milk prices closely and expressed concern over rising top-up home loan disbursements, urging lenders to take corrective actions.
1 New Update
India's GDP growth is expected to be the highest among major economies: Das
Not all savings are going into F&O; Sebi to take action on trading volumes
- RBI Guv
Not asking people to put money in deposits instead of markets. It is on people to decide where they want to put their money
- Shaktikanta Das
Markets recover
Sensex rebounds 650 pts from day's low, rises 100 pts; Nifty back above 24,300
Will finalise new LCR norms after inputs from banks
- Das
International agencies like IMF, OECD, WTO have all projected trade to grow by 3%: Das
RBI MPC 2024 Live Updates: Is US heading for a slowdown?
It is premature to talk about recession in US, we will be watchful, says governor Shaktikanta Das. "We will have to be watchful of incoming data and deal with emerging situations."
RBI governor Shaktikanta Das on 7 talking points from MPC meet
- Domestic economy is resilient
- Inflation has moderated from earlier high levels, but pace of disinflation is uneven and slow
- There is some distance to cover before we can align inflation to 4% target
- Financial sector stable with unclogged balance sheets
- India is insulated from global shocks
- Forex is at all time high
- RBI committed to ensuring orderly evolution of financial markets in its regulatory domain
Monsoon gains momentum, offering hope for food inflation relief: RBI
After a slow and delayed beginning, the southwest monsoon has intensified, covering more regions across India, according to a report by the Reserve Bank of India (RBI). This development is expected to provide some relief from the rising food inflation that has been a concern for the Indian economy. The RBI noted that the improved monsoon and the progress in sowing activities might help stabilize food prices.
RBI Governor Shaktikanta Das highlighted that the Indian Meteorological Department’s (IMD) forecast of an above-normal southwest monsoon, along with strong kharif crop sowing, is anticipated to bolster rural demand in the coming months. "Going forward, the IMD’s projection of above-normal southwest monsoon and healthy kharif sowing will support improving rural demand," Das stated.
The RBI also pointed out the potential impact of La Niña conditions, which are expected to develop in the latter part of the monsoon season. La Niña is typically associated with cooler and wetter weather in India and can positively influence agricultural output. Das remarked, "The likelihood of La Niña conditions developing during the second half of the monsoon season is likely to have a bearing on agricultural production in 2024-25."
As the monsoon strengthens, it brings hope for a more stable agricultural environment and a reduction in food inflation, both of which are crucial for sustaining economic growth and supporting rural livelihoods in India. The RBI will continue to monitor these developments closely, given their significant implications for the country’s economy.
RBI Governor Shaktikanta Das highlighted that the Indian Meteorological Department’s (IMD) forecast of an above-normal southwest monsoon, along with strong kharif crop sowing, is anticipated to bolster rural demand in the coming months. "Going forward, the IMD’s projection of above-normal southwest monsoon and healthy kharif sowing will support improving rural demand," Das stated.
The RBI also pointed out the potential impact of La Niña conditions, which are expected to develop in the latter part of the monsoon season. La Niña is typically associated with cooler and wetter weather in India and can positively influence agricultural output. Das remarked, "The likelihood of La Niña conditions developing during the second half of the monsoon season is likely to have a bearing on agricultural production in 2024-25."
As the monsoon strengthens, it brings hope for a more stable agricultural environment and a reduction in food inflation, both of which are crucial for sustaining economic growth and supporting rural livelihoods in India. The RBI will continue to monitor these developments closely, given their significant implications for the country’s economy.
RBI to Speed Up Cheque Clearing Process with New Measures
The Reserve Bank of India (RBI) announced new measures to significantly speed up the cheque clearing process, aiming to reduce the current clearance time from two working days to just a few hours. This was announced by Governor Shaktikanta Das during the bi-monthly Monetary Policy Committee (MPC) meeting.
Key Details:
Faster Cheque Processing: The new system will allow cheques to be scanned, presented, and cleared continuously throughout business hours, rather than the current batch processing method.
Current System: The existing Cheque Truncation System (CTS) operates with a clearing cycle of up to two working days, known as T+1.
Efficiency and Risk Reduction: The shift to continuous cheque clearing with 'on-realisation-settlement' is designed to improve the efficiency of cheque processing and reduce settlement risk for all participants involved in the process.
Customer Experience: Governor Das emphasized that this initiative is aimed at enhancing the overall customer experience by offering quicker cheque clearance.
Implementation: Detailed guidelines and instructions on the new cheque clearing process will be issued shortly.
Read more here
Key Details:
Faster Cheque Processing: The new system will allow cheques to be scanned, presented, and cleared continuously throughout business hours, rather than the current batch processing method.
Current System: The existing Cheque Truncation System (CTS) operates with a clearing cycle of up to two working days, known as T+1.
Efficiency and Risk Reduction: The shift to continuous cheque clearing with 'on-realisation-settlement' is designed to improve the efficiency of cheque processing and reduce settlement risk for all participants involved in the process.
Customer Experience: Governor Das emphasized that this initiative is aimed at enhancing the overall customer experience by offering quicker cheque clearance.
Implementation: Detailed guidelines and instructions on the new cheque clearing process will be issued shortly.
Read more here
RBI MPC 2024 Live Updates: RBI Announces New Measures for Digital Lending and Payment Systems
RBI Monetary Policy Live Updates: The Reserve Bank of India (RBI) is introducing significant measures aimed at enhancing customer protection, transparency, and efficiency in digital lending and payment systems.
1. Public Repository of Digital Lending Apps
To combat the challenges posed by unauthorized digital lending apps, the RBI is creating a public repository of Digital Lending Apps (DLAs) associated with RBI-regulated entities. This initiative comes after the release of guidelines on September 2, 2022, which addressed customer protection, data privacy, interest rates, recovery practices, and mis-selling concerns. Despite these measures, reports of unregulated players claiming false association with RBI-regulated entities have persisted. The repository will allow customers to verify the legitimacy of DLAs, based on data submitted directly by the regulated entities. The repository will be available on the RBI's website and updated as entities report new or deleted apps. Detailed instructions will be issued soon.
2. Increased Frequency of Credit Information Reporting
Currently, credit institutions report borrower information to credit information companies (CICs) on a monthly basis. To offer a more up-to-date picture of a borrower's credit status, the RBI has decided to increase the reporting frequency to fortnightly intervals or shorter, as mutually agreed upon by credit institutions and CICs. This change will benefit borrowers through faster updates of their credit information, especially after loan repayments, and will aid lenders in better risk assessment and in reducing borrower over-leveraging. Necessary instructions will be forthcoming.
II. Payment Systems Enhancements
3. Increased UPI Transaction Limit for Tax Payments
Unified Payments Interface (UPI) has become a preferred payment method due to its ease of use. Currently, UPI transactions are capped at ₹1 lakh. The RBI has decided to raise the limit for tax payments via UPI to ₹5 lakh per transaction. This increase aims to accommodate the regular and high-value nature of direct and indirect tax payments. Detailed instructions will follow separately.
4. Introduction of Delegated Payments via UPI
With 424 million UPI users, the RBI sees potential for further user base expansion. The RBI proposes the introduction of "Delegated Payments", allowing a primary user to set a UPI transaction limit for a secondary user on the primary user's bank account. This feature is expected to broaden digital payment use across the country. Detailed instructions will be issued soon.
5. Continuous Cheque Clearing under Cheque Truncation System (CTS)
The current Cheque Truncation System (CTS) processes cheques within a clearing cycle of up to two working days. To enhance efficiency and customer experience, the RBI proposes transitioning CTS to continuous clearing with 'on-realisation-settlement.' Cheques will be scanned, presented, and cleared within a few hours on a continuous basis during business hours, reducing the clearing cycle from T+1 days to just a few hours. Detailed guidelines will be provided shortly.
These measures are part of the RBI’s ongoing efforts to strengthen the financial system and protect consumer interests.
1. Public Repository of Digital Lending Apps
To combat the challenges posed by unauthorized digital lending apps, the RBI is creating a public repository of Digital Lending Apps (DLAs) associated with RBI-regulated entities. This initiative comes after the release of guidelines on September 2, 2022, which addressed customer protection, data privacy, interest rates, recovery practices, and mis-selling concerns. Despite these measures, reports of unregulated players claiming false association with RBI-regulated entities have persisted. The repository will allow customers to verify the legitimacy of DLAs, based on data submitted directly by the regulated entities. The repository will be available on the RBI's website and updated as entities report new or deleted apps. Detailed instructions will be issued soon.
2. Increased Frequency of Credit Information Reporting
Currently, credit institutions report borrower information to credit information companies (CICs) on a monthly basis. To offer a more up-to-date picture of a borrower's credit status, the RBI has decided to increase the reporting frequency to fortnightly intervals or shorter, as mutually agreed upon by credit institutions and CICs. This change will benefit borrowers through faster updates of their credit information, especially after loan repayments, and will aid lenders in better risk assessment and in reducing borrower over-leveraging. Necessary instructions will be forthcoming.
II. Payment Systems Enhancements
3. Increased UPI Transaction Limit for Tax Payments
Unified Payments Interface (UPI) has become a preferred payment method due to its ease of use. Currently, UPI transactions are capped at ₹1 lakh. The RBI has decided to raise the limit for tax payments via UPI to ₹5 lakh per transaction. This increase aims to accommodate the regular and high-value nature of direct and indirect tax payments. Detailed instructions will follow separately.
4. Introduction of Delegated Payments via UPI
With 424 million UPI users, the RBI sees potential for further user base expansion. The RBI proposes the introduction of "Delegated Payments", allowing a primary user to set a UPI transaction limit for a secondary user on the primary user's bank account. This feature is expected to broaden digital payment use across the country. Detailed instructions will be issued soon.
5. Continuous Cheque Clearing under Cheque Truncation System (CTS)
The current Cheque Truncation System (CTS) processes cheques within a clearing cycle of up to two working days. To enhance efficiency and customer experience, the RBI proposes transitioning CTS to continuous clearing with 'on-realisation-settlement.' Cheques will be scanned, presented, and cleared within a few hours on a continuous basis during business hours, reducing the clearing cycle from T+1 days to just a few hours. Detailed guidelines will be provided shortly.
These measures are part of the RBI’s ongoing efforts to strengthen the financial system and protect consumer interests.
RBI MPC 2024 Live Updates: The next meeting of the MPC is scheduled during October 7 to 9, 2024
RBI MPC Policy 2024 Live Updates: RBI MPC Meeting Key Highlights
RBI MPC Live:
- Interest Rates Unchanged: The RBI's Monetary Policy Committee (MPC) decided to maintain the key interest rate at 6.50% for the ninth consecutive time.
- Policy Stance: The MPC, led by Governor Shaktikanta Das, retained the 'withdrawal of accommodation' stance to ensure monetary policy stays vigilant on risks.
- Voting Outcome: The decision to keep the repo rate unchanged was made with a 4:2 majority during the meeting held from August 5-7.
- Inflation Focus: High food prices remain a concern. Food inflation, with a 46% weight on headline inflation, continues to impact overall inflation.
- Inflation Data: June's Consumer Price Index (CPI) was 5.1%, primarily due to a surge in vegetable prices. This marked the first acceleration in five months.
- GDP Forecast: The real GDP forecast for FY25 remains at 7.2%, with Q1 slightly reduced to 7.2%, Q2 at 7.2%, Q3 at 7.3%, and Q4 at 7.2%. Q1FY26 is also projected at 7.2%.
- Inflation Projections: FY25 inflation forecast is unchanged at 4.5%, with adjustments in quarterly projections: Q2 at 4.4% (up from 3.8%), Q3 at 4.7% (up from 4.6%), and Q4 at 4.3% (down from 4.5%).
- Kharif Sowing: Healthy kharif sowing and improving southwest monsoon are expected to provide some relief.
- Price Monitoring: The need to carefully monitor mobile tariffs and milk prices was emphasized.
- Liquidity Management: The RBI will continue to be nimble and flexible in liquidity management operations.
- Home Loans: Rising disbursals of top-up home loans were noted, with lenders advised to take remedial actions.
- Forex Reserves: India's forex reserves reached a record high of $675 billion as of August 2.
- Digital Lending Apps: A public repository of digital lending apps is proposed to prevent unauthorized lending.
- UPI Tax Payment Limit: The UPI tax payment limit is increased from Rs 1 lakh to Rs 5 lakh per transaction.
- Cheque Clearing: Continuous cheque clearing is proposed to be introduced.
RBI MPC Live Updates: India's current account deficit moderated to 0.7% of GDP in 2023-2024 from 2% GDP in 2022-2023
RBI MPC Live: Due to lower trade deficit and robust services and remmittances receipts
RBI MPC Live Updates: UPI tax payment limit increased from Rs 1 lakh to Rs 5 lakh per transaction, Shaktikanta Das announces
RBI MPC Meet 2024 Live UpdatesCheque clearing time to be reduced
RBI MPC Live Updates: India's forex reserves reach record high og $675 billion as of Aug 2
RBI MPC Meeting 2024 Live Updates: Das on food inflation
RBI MPC Live Updates: RBI Governor and MPC Chair Shaktikanta Das said the MPC may look through high food inflation if it is transitory but in an environment of persisting high food inflation, as we are experienceing now, the MPC can not afford to do so. It has to remain vigilant to prevent spillovers or second round effects from persisting food inflation and preserve the gains made so far in monetary policy credibility.
RBI MPC Meeting 2024 Live Updates: Das says India's financial sector stable, but there are four problems to keep an eye on
RBI MPC Live:
- As alternative investment avenues become more attractive for retail investors, bank deposits are dropping, Das warns. Banks are struggling to meet credit demand, exposing themselves to structural integrity issues. Banks should focus more on mobilising household savings, leveraging their vast branch network.
- Sectors where preemtive regulatory measures were announced by RBI in Nov, 2023 have shown moderation in credit growth. However, certain sections of personal loans continue to witness high growth, showing high leverage through retail loans, mostly through personal consumption needs careful monitoring.
- Some entities are offering top-up loans and gold loans without adhereing to reguatory practices, banks and NBFCs need to track and take measures to check these
- Global tech outage showed the importance for banks and financial companies to build risk management processes to keep operations up and running with minimum disruptions
RBI MPC 2024 Live Updates: How Dalal Street is reacting to Das and Co
RBI MPC Live Updates: Sensex drops over 500 pts, Nifty below 24,150; RBI keeps rate unchanged at 6.5%.
RBI MPC Meeting Live Updates: Indian rupee remained largely rangebound, Das says
RBI MPC Live Updates: Das & co kept its inflation forecast for this fiscal year unchanged at 4.5%, despite concerns about rising food prices and geopolitical tensions that could disrupt crude prices.
RBI MPC Live: Das emphasized the need to prioritize inflation and ensure price stability to support growth. He noted that while India's growth remains robust, inflation is on a declining trajectory, with core inflation reaching historic lows in May and June.
The RBI's inflation target is 4%, with a tolerance band of 2 percentage points. Retail inflation was last near this target in January 2021 at 4.06%. However, inflation remains a major concern, with food prices driving the increase. In June, retail inflation rose to 5.08% from 4.75% in May, primarily due to higher food prices, which account for a significant portion of the Consumer Price Index (CPI).
Food inflation surged to 9.55% in June from 8.69% in May, with vegetable prices jumping 27.33%. Since November 2023, food prices have been increasing by over 8% year-on-year. This trend is concerning as a significant portion of India's population spends most of their income on food.
Experts have warned that high food inflation could prevent overall inflation from declining significantly. Prices of key vegetables such as onion, tomato, and potato have risen, with a Crisil analysis showing the cost of a veg thali in India increased by 11% sequentially in July.
Weather variations and climate shocks add uncertainty to the food inflation outlook. Despite higher-than-normal rainfall in several regions in July 2024, major foodgrain-producing states face significant deficits. Excessive rainfall due to La Niña could lead to crop losses and further impact food prices, according to an SBI Research report.
Governor Das mentioned that relief in food inflation is expected from the southwest monsoon. However, CareEdge noted that uneven rainfall in the first half of the monsoon season keeps the risk of food inflation high. Adequate rainfall in deficit regions is crucial for sowing activities, making the timing and distribution of the monsoon essential.
In addition to food inflation risks, recent telecom tariff hikes by major mobile service providers will put upward pressure on core inflation. However, crude oil prices have recently hit an eight-month low amid U.S. recession fears and geopolitical tensions in the Middle East.
The RBI's inflation target is 4%, with a tolerance band of 2 percentage points. Retail inflation was last near this target in January 2021 at 4.06%. However, inflation remains a major concern, with food prices driving the increase. In June, retail inflation rose to 5.08% from 4.75% in May, primarily due to higher food prices, which account for a significant portion of the Consumer Price Index (CPI).
Food inflation surged to 9.55% in June from 8.69% in May, with vegetable prices jumping 27.33%. Since November 2023, food prices have been increasing by over 8% year-on-year. This trend is concerning as a significant portion of India's population spends most of their income on food.
Experts have warned that high food inflation could prevent overall inflation from declining significantly. Prices of key vegetables such as onion, tomato, and potato have risen, with a Crisil analysis showing the cost of a veg thali in India increased by 11% sequentially in July.
Weather variations and climate shocks add uncertainty to the food inflation outlook. Despite higher-than-normal rainfall in several regions in July 2024, major foodgrain-producing states face significant deficits. Excessive rainfall due to La Niña could lead to crop losses and further impact food prices, according to an SBI Research report.
Governor Das mentioned that relief in food inflation is expected from the southwest monsoon. However, CareEdge noted that uneven rainfall in the first half of the monsoon season keeps the risk of food inflation high. Adequate rainfall in deficit regions is crucial for sowing activities, making the timing and distribution of the monsoon essential.
In addition to food inflation risks, recent telecom tariff hikes by major mobile service providers will put upward pressure on core inflation. However, crude oil prices have recently hit an eight-month low amid U.S. recession fears and geopolitical tensions in the Middle East.
RBI MPC Live Updates: Food inflation has weight of 46% on headline inflation, it cannot be ignored, Das warns
RBI Monetary Policy Meeting Live Updates: Inflation forecast FY25- 4.5%
RBI MPC Live: Inflation for
- Q2- 4.4% (revised from 3.8%)
- Q3- 4.7% (revised from 4.6%)
- Q4-4.3%(revised from 4.5%)
RBI MPC Meeting 2024 Live Updates: Core inflation moderated to historic lows in May and June, Das says
RBI MPC Live:
- High food price is likely to have continued in July also
- A degree of relief in food inflation is expected from pickup in southwest monoon
RBI MPC Meeting 2024 Live Updates: Moderated Q1 growth forecast due to updated information on certain high frequency indicators, Das says
RBI Monetary Policy 2024 Live Updates: Real GDP for FY25 projected at 7.2%, with 'risks evenly balanced'
RBI MPC 2024 Live:
- Q1-7.2
- Q2 - 7.2
- Q3- 7.3
- Q4 - 7.2
RBI MPC Meeting Live Updates: Private corp investment is gaining steam on the back of expansion in bank credit, Das says.
RBI MPC 2024 Live: Healthy balance sheet of banks and corps, thrust on capex by govt and visible signs of pickup in pvt invst will drive investment prospects
RBI Monetary Policy Meeting 2024 Live Updates: The numbers you need to know
RBI Monetary Policy 2024 Live Updates: Mfg PMI at 58.1 in July remained elevated
PMI services stood strong and has been above 60 for 7 consecutive months, Das says. Services sector showed buoyancy, as per high frequency indicators.
RBI Monetary Policy 2024 Live Updates: Shaktikanta Das on the global outlook
Global economic outlook exhibits uneven expansion. There has been tightenging by a few central banks. Demographic shifts, geopolitical tensions, rising public debt pose new set of challenges, Das says
RBI Monetary Policy Meeting Live Updates: Ensuring price stability eventually results in and supports a period of sustained growth
We have decided to focus on inflation and support price stability to ensure growth.
MPC judged that it is important for monetary policy to stay the course while maintaining close vigil on risks
- Shaktikanta Das
RBI Monetary Policy Meeting Live Updates: Das comments on India's inflation fight
While fuel group remains in disinflation, expected moderation in headline inflation in 2Q of this FY on account of favourable base may reverse in the coming quarters. In the third quarter, India has a substantial advantage that may pull down the inflation but the base effect will wear out.
RBI Monetary Policy Meeting Live Updates: Das on the price pinch
Headline inflation after remaining steady in April-May, increased in June driven by food component which remains stubborn. In 3Q, we will have substantial advantage of base effect which will pull down headline inflation numbers.
RBI Monetary Policy Meeting Live Updates: Seeing good amount of convergence between market expectations and RBI policies, they are well aligned, Das says
RBI Monetary Policy Meeting Live Updates: RBI maintains status quo
RBI keeps rates unchanged at 6.5%, to remain foussed on withdrawal of accommodation
This is the 50th meeting of MPC since its inception in Sep 2016, says Das
RBI Monetary Policy Meeting Live Updates: What Das and Co have done so far
Since February 2023, the RBI gradually increased its policy rate to 6.5%, then paused to stabilize inflation. This strategy initially showed promise, as headline Consumer Price Index (CPI) inflation briefly fell within acceptable limits starting in September 2023.
The RBI's latest bulletin highlights that, despite an overall positive trend, inflation remains a significant concern for the Indian economy, with an uptick in June 2024 disrupting its disinflation path. "Disinflation has been grudging and uneven, with headline inflation closer to 5% than the 4% target, despite historically low core inflation and sustained deflation in fuel prices," the RBI stated. Rising food prices, which account for more than half of the consumer price index, are largely to blame for this situation.
The RBI's latest bulletin highlights that, despite an overall positive trend, inflation remains a significant concern for the Indian economy, with an uptick in June 2024 disrupting its disinflation path. "Disinflation has been grudging and uneven, with headline inflation closer to 5% than the 4% target, despite historically low core inflation and sustained deflation in fuel prices," the RBI stated. Rising food prices, which account for more than half of the consumer price index, are largely to blame for this situation.
RBI Monetary Policy Meeting Live Updates: What the ET poll predicted
As per an ET poll of 12 experts, the RBI is likely to keep interest rates unchanged this week as high food prices prevent any tilt toward softer policy, but easing core inflation and a global turn toward lower borrowing costs could make a case for the central bank to shift to a neutral stance in the next quarter.
RBI Monetary Policy Meeting Live Updates: What happened in June RBI MPC
RBI MPC Meet News Live Updates: In the previous meeting four out of six MPC members voted in favour of the keeping the repo rate unchanged. Jayanth Varma and Ashima Goyal voted for a policy repo rate cut of 25 bps and a change in stance to neutral.
- Standing deposit facility (SDF) rate was also unchanged at 6.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent.
- Moreover, there was once again emphasis laid on keeping inflation target at 4 per cent.
- Real GDP growth forecast for FY25 was hiked to 7.2 per cent with Q1 at 7.3 per cent; Q2 at 7.2 per cent; Q3 at 7.3 per cent; and Q4 at 7.2 per cent
- CPI inflation for FY25 was projected at 4.5 per cent with Q1 at 4.9 per cent; Q2 at 3.8 per cent; Q3 at 4.6 per cent; and Q4 at 4.5 per cent
- In its June meeting, Das & Co proposed various reforms including revision of definition of bulk deposits as ‘Single Rupee term deposits of ?3 crore and above’ for SCBs (excluding RRBs) and SFBs
- RBI also announced its plans to rationalise guidelines on export and import of goods and services in line with the changing dynamics of cross-border trade transactions globally.
- The central bank also announced plans to set up a Digital Payments Intelligence Platform to mitigate payment fraud risks.
- RBI, in June, proposed to bring UPI Lite within ambit of e-mandate framework to introduce auto-replenishment facility if balance goes below a threshold limit set by user.
RBI Monetary Policy Meeting Live Updates: RBI's major challenge is the thali on its table
RBI MPC Meet News Live Updates: The Reserve Bank of India (RBI) is set to announce its policy rates on Thursday, facing a unique challenge symbolized by the "thali," or food platter. In India, the thali has become a representation of food inflation, with analysts closely monitoring its prices to gauge food inflation trends. The RBI's Monetary Policy Committee (MPC) is expected to keep the key interest rate unchanged at 6.5% amid ongoing food inflation concerns.
While inflation in other sectors remains under control, food inflation has proven to be stubbornly high. This persistence is largely due to the unpredictability of weather and inefficiencies within the agricultural sector, which significantly impact food production.
The MPC's decision comes at a critical time, as food prices continue to rise, driven by factors such as poor weather conditions and structural issues in farming. The committee's focus will be on balancing the need to manage inflation while supporting economic growth.
While inflation in other sectors remains under control, food inflation has proven to be stubbornly high. This persistence is largely due to the unpredictability of weather and inefficiencies within the agricultural sector, which significantly impact food production.
The MPC's decision comes at a critical time, as food prices continue to rise, driven by factors such as poor weather conditions and structural issues in farming. The committee's focus will be on balancing the need to manage inflation while supporting economic growth.
RBI Monetary Policy Meeting Live Updates: Dovish or Hawkish?
RBI MPC Meet News Live Updates: On the stance questions, there are several points in support of softening from the current "hawkish" posturing, the HSBC report said, adding that there are an equal number of aspects against such a move as well.
RBI Monetary Policy Meeting Live Updates: A final meet before significant reshuffle
RBI MPC Meet News Live Updates: The Reserve Bank of India's (RBI) rate-setting panel is bracing for another spike in food-driven inflation as it meets for the final time before a significant reshuffle. This session precedes the exit of the committee's external members, marking the first of several key policymaker changes scheduled in the coming months.
The six-member Monetary Policy Committee (MPC) consists of three central bank officials and three external members. Every four years, the government appoints new external members to the committee, potentially shifting its dynamics.
Recently, the panel has been divided on its approach. Two members voted for a rate cut, arguing that high inflation-adjusted real rates could harm the economy's growth outlook. The remaining four members have focused on reducing inflation to the 4% target, which has been elusive due to the pandemic, geopolitical conflicts, and weather-related disruptions.
"This was a global problem," said Madhavi Arora, chief economist at Emkay Global. "Globally, goods inflation went through the roof, there was a supply problem, so very little they could do."
As the MPC prepares for its meeting, it faces the challenge of balancing inflation control with economic growth, setting the stage for the new members who will soon influence India's monetary policy amidst ongoing uncertainties.
The six-member Monetary Policy Committee (MPC) consists of three central bank officials and three external members. Every four years, the government appoints new external members to the committee, potentially shifting its dynamics.
Recently, the panel has been divided on its approach. Two members voted for a rate cut, arguing that high inflation-adjusted real rates could harm the economy's growth outlook. The remaining four members have focused on reducing inflation to the 4% target, which has been elusive due to the pandemic, geopolitical conflicts, and weather-related disruptions.
"This was a global problem," said Madhavi Arora, chief economist at Emkay Global. "Globally, goods inflation went through the roof, there was a supply problem, so very little they could do."
As the MPC prepares for its meeting, it faces the challenge of balancing inflation control with economic growth, setting the stage for the new members who will soon influence India's monetary policy amidst ongoing uncertainties.
RBI Monetary Policy Meeting Live Updates: DBS Bank's Radhika Rao on policy expectations
RBI MPC Meet News Live Updates: Radhika Rao, senior economist, DBS Bank, said, "The June-July inflation undercurrents validate the MPC’s concerns over the near-term price outlook. To recall, June CPI inflation rose 5.1% yoy ...food and beverages added most to the headline, rising 8.4% from 7.9% before on higher vegetables, pulses and certain protein categories."
RBI Monetary Policy Meeting Live Updates: A look at Reuters poll ahead of MPC's final words
RBI MPC Meet News Live Updates: The Reserve Bank of India's (RBI) rate-setting panel is grappling with another surge in food-driven inflation as it convenes for the final time before a significant reshuffle. The six-member Monetary Policy Committee (MPC), comprising three RBI officials and three external members, is reconstituted every four years with new government-appointed external members.
This upcoming reshuffle could potentially shift the current dynamics within the committee. Recently, the panel has been divided, with two members advocating for a rate cut, arguing that high inflation-adjusted real rates could harm the economy's growth prospects. The remaining four members have remained steadfast in their focus on reducing inflation to the 4% target, a goal that has proven elusive amid the pandemic, geopolitical conflicts, and weather-related disruptions.
"Globally, goods inflation went through the roof, there was a supply problem, so very little they could do," explained Madhavi Arora, chief economist at Emkay Global, highlighting the worldwide nature of the inflation issue.
As the MPC prepares for its meeting on August 8, it is expected to maintain the current rates for the ninth consecutive session, with inflation still above 5% in June, according to a Reuters poll. This meeting is pivotal as it sets the stage for the incoming members who will soon steer India's monetary policy amidst ongoing economic uncertainties.
This upcoming reshuffle could potentially shift the current dynamics within the committee. Recently, the panel has been divided, with two members advocating for a rate cut, arguing that high inflation-adjusted real rates could harm the economy's growth prospects. The remaining four members have remained steadfast in their focus on reducing inflation to the 4% target, a goal that has proven elusive amid the pandemic, geopolitical conflicts, and weather-related disruptions.
"Globally, goods inflation went through the roof, there was a supply problem, so very little they could do," explained Madhavi Arora, chief economist at Emkay Global, highlighting the worldwide nature of the inflation issue.
As the MPC prepares for its meeting on August 8, it is expected to maintain the current rates for the ninth consecutive session, with inflation still above 5% in June, according to a Reuters poll. This meeting is pivotal as it sets the stage for the incoming members who will soon steer India's monetary policy amidst ongoing economic uncertainties.
RBI Monetary Policy Meeting Live Updates: July inflation may have dipped below RBI's target
RBI MPC Meet News Live Updates: India's consumer price inflation is expected to have fallen below the Reserve Bank of India's (RBI) 4.0% medium-term target in July for the first time in nearly five years, according to a Reuters poll of economists. This decrease is attributed to a high base effect from the previous year.
Despite rising food costs, particularly for vegetables, and recent hikes in telecom tariffs, the higher base from July last year—when inflation peaked at 7.44%—played a significant role in tempering the pace of price increases. This suggests that the slowdown in inflation may be temporary.
The poll, conducted from August 2-7, involved 36 economists and forecasted an annual inflation rate of 3.65% for July, a significant drop from June’s 5.08%. Predictions for the upcoming data release on August 12 at 1200 GMT varied widely, ranging from 2.85% to 5.30%. This highlights the challenges in predicting inflation in India, where consumer prices are heavily influenced by unpredictable monsoon rains.
As the nation awaits the official data, the wide range of forecasts underscores the uncertainty and complexity of inflation trends in the Indian economy.
Despite rising food costs, particularly for vegetables, and recent hikes in telecom tariffs, the higher base from July last year—when inflation peaked at 7.44%—played a significant role in tempering the pace of price increases. This suggests that the slowdown in inflation may be temporary.
The poll, conducted from August 2-7, involved 36 economists and forecasted an annual inflation rate of 3.65% for July, a significant drop from June’s 5.08%. Predictions for the upcoming data release on August 12 at 1200 GMT varied widely, ranging from 2.85% to 5.30%. This highlights the challenges in predicting inflation in India, where consumer prices are heavily influenced by unpredictable monsoon rains.
As the nation awaits the official data, the wide range of forecasts underscores the uncertainty and complexity of inflation trends in the Indian economy.
RBI Monetary Policy Meeting Live Updates: Here's what Bloomberg economists suggest
RBI MPC Meet News Live Updates: All except one of the 43 economists surveyed by Bloomberg News predicted the repurchase rate may stay unchanged at 6.5%. Bloomberg Economics’ Abhishek Gupta predicts a quarter-point cut.
RBI Monetary Policy Meeting Live Updates: What are central banks around the world doing?
RBI MPC Meet News Live Updates: Central banks worldwide are adapting their strategies as the US Federal Reserve signals potential rate cuts. This move is causing jitters in currency markets, prompting policymakers in emerging markets to stay vigilant to avoid market volatility.
RBI Governor Shaktikanta Das stated, "India’s monetary policy is independent and it won’t necessarily follow the action of the US central bank." His comments emphasize that India's approach will not be dictated by US policy shifts.
RBI Governor Shaktikanta Das stated, "India’s monetary policy is independent and it won’t necessarily follow the action of the US central bank." His comments emphasize that India's approach will not be dictated by US policy shifts.
RBI Monetary Policy Meeting Live Updates: India's inflation still above 4 per cent target
RBI MPC Meet News Live Updates: RBI Governor Shaktikanta Das has cautioned against any premature rate cuts. Inflation in June jumped to 5.08%, more than 1 percentage point above the RBI’s target, primarily due to high food prices. Although inflation may ease in July and August for statistical reasons, it is expected to rise again in September. The RBI forecasts inflation to average 4.5% through the fiscal year ending in March.
RBI Monetary Policy Meeting Live Updates: DG Michael Patra's article in RBI July Bulletin in focus
RBI MPC Meet News Live Updates: Discussion on a potential shift to a neutral stance has gained momentum following an article in the RBI’s July Bulletin, co-authored by Deputy Governor Michael Patra. The article suggested that monetary policy could respond to an enduring movement towards the 4% inflation target rather than requiring inflation to reach and stay at that level.
RBI Monetary Policy Meeting Live Updates: A shift to neutral stance likely?
RBI MPC Meet News Live Updates: Although no change in the benchmark policy rate is expected, HDFC Bank anticipates the RBI might shift its monetary policy stance from withdrawal of accommodation to neutral.
"Core inflation has been under 4% for some time now. While there are concerns about the sequential momentum of headline CPI inflation, the year-on-year headline inflation numbers will be below 4% going ahead due to the base effect. Moreover, we don’t see much risk of spillover from food inflation into generalised inflation," said Sakshi Gupta, principal economist, HDFC Bank.
Core inflation, excluding volatile components like food and fuel, is viewed as a more reliable measure of underlying demand conditions. A neutral stance would allow the RBI flexibility to adjust interest rates as needed, unlike the current stance that precludes rate cuts.
"Core inflation has been under 4% for some time now. While there are concerns about the sequential momentum of headline CPI inflation, the year-on-year headline inflation numbers will be below 4% going ahead due to the base effect. Moreover, we don’t see much risk of spillover from food inflation into generalised inflation," said Sakshi Gupta, principal economist, HDFC Bank.
Core inflation, excluding volatile components like food and fuel, is viewed as a more reliable measure of underlying demand conditions. A neutral stance would allow the RBI flexibility to adjust interest rates as needed, unlike the current stance that precludes rate cuts.
RBI Monetary Policy Meeting Live Updates: ET Poll estimates...
RBI MPC Meet News Live Updates: An ET poll of 12 respondents unanimously predicted that the RBI’s Monetary Policy Committee (MPC) would maintain the repo rate at 6.50% at the conclusion of its three-day meeting on August 8. This would mark the ninth consecutive meeting with unchanged rates.
RBI Monetary Policy Meeting Live Updates: Will RBI opt for a status quo for the ninth time?
RBI MPC Meet News Live Updates: The Reserve Bank of India (RBI) is anticipated to keep interest rates steady this week, as rising food prices limit the potential for a softer policy approach. However, easing core inflation and global trends towards lower borrowing costs might prompt the central bank to adopt a neutral stance in the next quarter, aligning with India's busy economic season.
"The June-July inflation undercurrents validate the MPC’s concerns over the near-term price outlook. To recall, June CPI inflation rose 5.1% yoy ...food and beverages added most to the headline, rising 8.4% from 7.9% before on higher vegetables, pulses, and certain protein categories," said Radhika Rao, senior economist, DBS Bank.
"The June-July inflation undercurrents validate the MPC’s concerns over the near-term price outlook. To recall, June CPI inflation rose 5.1% yoy ...food and beverages added most to the headline, rising 8.4% from 7.9% before on higher vegetables, pulses, and certain protein categories," said Radhika Rao, senior economist, DBS Bank.
