RBI MPC highlights: Deposit-credit divergence could lead to liquidity management issue, says Das

RBI Monetary Policy Meeting 2024: Catch all the latest highlights on RBI's monetary policy announcements here

1:38 PM

Alternative investments becoming more attractive, bank deposits trailing loan growth: RBI

“It is observed that alternative investment avenues are becoming more attractive to retail customers and banks are facing challenges on the funding front with bank deposits trailing loan growth,” RBI Governor Shaktikanta Das said. Banks are taking greater recourse to short-term non-retail deposits and other instruments of liability to meet the incremental credit demand, he added. Read here for a more detailed story. 

1:19 PM

Monsoon 7% higher than long-term avg as of now; will have good impact on kharif production, says RBI Guv

12:54 PM

Proactively monitor fund usage: RBI to banks, NBFCs

Banks and non-banking financial companies (NBFCs) are advised to proactively monitor the end use of funds, RBI Governor Shaktikanta Das said today.

12:48 PM

Not asking people to put money in deposits instead of markets: RBI Guv

We are not suggesting that people shouldn't go in equity market or put their money only in deposits. What we are saying is that this could create a Liquidity management issue for banks, RBI Guv Das said on the shift of savings from bank deposits to the equity market, RBI Governor Shaktikanta Das stated.

12:40 PM

Liquidity management challenges could arise due to gap b/w deposit growth, credit expansion: Das

Potential liquidity management challenges could arise due to the widening gap between deposit growth and credit expansion, RBI Governor Shaktikanta Das emphasised. The Securities and Exchange Board of India (SEBI) is expected to take steps to address concerns related to the rising volume of F&O trading, he added.

12:36 PM

RBI MPC news update: Food inflation's inclusion or exclusion from the CPI index is the job of NSO, says Das

12:34 PM

Bulk of FAR investments focused on 5-10 year segment: Governor Das

“We’ve noted that the bulk of FAR interest is concentrated in the 5-10 year segment, which represents 90% of total investments. In contrast, the 30-year segment attracts only 2% of the overall investment stock,"  RBI Governor Shaktikanta Das said.

12:31 PM

RBI MPC Presser LIVE: Raising of deposit rates is any bank's commercial decision, not ours, says Das

The onus of deposit growth rate is on the banks individually, Governor Das said.

12:29 PM

Will finalise new LCR norms after inputs from banks: RBI Governor Das

Discussing the Liquidity Coverage Ratio (LCR) draft, Das highlighted that the draft has been released for public feedback. The RBI is  at the moment seeking inputs from banks and other experts before finalising the guidelines.

 

12:26 PM

Resilience to external shocks stronger than ever, says RBI Governor Das

India is now significantly more resilient compared to earlier periods, RBI Governor Shaktikanta Das said. While India has enhanced its resilience to external shocks, it is crucial to wait for more data before drawing conclusions, he added.

12:23 PM

RBI will act as per incoming domestic, international data: Governor Das

Premature to talk about a recession in US; RBI will act as per incoming domestic, international data: RBI Guv Shaktikanta Das.

12:18 PM

RBI MPC LIVE: Das advises against drawing conclusions from US unemployment data

The RBI governor stated that  while US unemployment data has sparked some speculation, other economic indicators remain strong. "We will have to be watchful of incoming data and deal with emerging situations," RBI Governor Das said.

12:13 PM

RBI MPC presser: Inflation is moderating; pace of disinflation remains uneven and slow, says Governor Das

12:11 PM

MPC LIVE update: Distance left to cover in order to align inflation with 4% target, says Governor Das

Domestic economic growth is resilient, but some distance is left to align inflation with the 4% target, Governor Das stated.

12:10 PM

RBI MPC presser LIVE news: Governor Das's press conference begins

11:53 AM

Food inflation pressures can't be ignored in RBI MPC's target: Governor Das

"Continuing food price shocks slowed the process of disinflation in Q1 FY25. There is also considerable divergence between headline and core inflation. This has brought to the fore how much importance the MPC should give to food inflation. Our target is headline inflation, where food inflation has a weight of 46 per cent. With this high share of food in the consumption basket, food inflation pressures cannot be ignored," RBI Governor Shaktikanta Das said.

11:31 AM

Core inflation moderated to ‘historic low’ in May and June: RBI Governor Shaktikanta Das

Shaktikanta Das announced that core inflation has been moderated to a ‘historic low’ in May and June, with food inflation contributing to 75 per cent of inflation in these two months. .

For FY25, RBI kept its CPI projection at 4.5 per cent

Q2 - The central bank increased it forecast to 4.4 per cent from 3.8 per cent  

Q3 - Up 4.7 per cent from 4.6 per cent

Q4 - Down to 4.3 per cent from 4.5 per cent

For the first quarter of FY26, the RBI expects CPI growth at 4.4 per cent.

11:21 AM

What RBI Governor said on domestic growth

Domestic growth has ‘held up well’ due to steady urban consumption and ‘improving’ rural consumption, Governor Das stated. Based on this the MPC has decided for the monetary policy to ‘stay the course’ and keep a vigil on the inflation trajectory, he added.

11:08 AM

RBI MPC maintains FY25 inflation forecast, food prices remain a challenge

RBI Governor Shaktikanta Das noted that headline inflation reached 5.1 per cent in June 2024, driven by unexpected factors. While fuel prices remained in deflation for the tenth consecutive month, food inflation surged. Read here for a detailed story.

10:59 AM

Food inflation cannot be ignored: RBI Governor Das

Governor Das stated that food inflation, which has a weight of 46 per cent in headline inflation, cannot be ignored. He asserted that high food prices likely persisted in July, leading to the revision in the inflation forecast for the second quarter of the current financial year. Read here for a detailed story.

10:46 AM

Banks, NBFCs will be advised to take remedial action after global outage impacted industries: Governor Das

"The overall financial sector is healthy and stable. Banks and NBFCs will be advised to take remedial action. An unprecedented outage impacted industries globally, making it necessary for banks and financial institutions to build frameworks to maintain operational resilience," RBI Governor Das stated today.

10:38 AM

New technologies like AI pose new set of challenges for global economy: RBI Guv Shaktikanta Das

Manufacturing activities continue to gain ground on back of increasing domestic demand, services sector remains buoyant,RBI Governor Shaktikanta Das stated today. Household consumption is supporting turnaround in demand, with the dlobal economic outlook exhibiting steady, though uneven expansion, Das added.

 

10:30 AM

RBI Monetary Policy Meeting Live: MPC warns of spillover from persistent high food inflation

RBI Governor Shaktikanta Das emphasised that the MPC may overlook high food inflation if it is temporary but cannot ignore persistently high food inflation due to its potential spillover effects. The public primarily perceives inflation through the lens of food price, Das stated.

10:25 AM

RBI MPC Policy LIVE update: FY25 real GDP seen at 7.2%, says Shaktikanta Das

GDP growth projection remains unchanged at 7.2 per cent. The quarterly projections are:

 

- Q1FY25 GDP growth estimates at 7.1%

- Q2FY25: GDP growth estimates at 7.2%

- Q3FY25 GDP growth estimates at 7.3%

- Q4FY25 GDP growth estimates at 7.2%

10:24 AM

RBI Governor projects retail inflation at 4.5% during FY25 assuming normal monsoon

High food inflation also impacts household inflation expectation, RBI Governor Das stated today. 

10:15 AM

Domestic growth is resilient, supported by steady urban consumption, says RBI governor

The MPC determined that it is crucial for monetary policy to remain consistent while closely monitoring inflation. The panel emphasised maintaining a primary focus on inflation to support sustained economic growth, RBI Governor Shaktikanta Das said today.

10:12 AM

RBI MPC Meeting 2024 LIVE update: No change in MSF and SDF rates

The Marginal Standing Facility (MSF) and the Standard Deposit Facility (SDF) rates remain unchanged at 6.75 per cent and 6.25 per cent, RBI Governor Shaktikanta Das said today.

10:10 AM

Monetary policy update: RBI MPC votes 4-2 to maintain policy rates and 'withdrawal of accommodation' stance

10:06 AM

RBI MPC update: RBI keeps repo rate unchanged at 6.5%

The RBI kept its benchmark interest rate unchanged at 6.5 per cent for the nineth consecutive time.

9:53 AM

MPC will maintain its 'withdrawal of accommodation' stance: Infomerics Ratings

Manoranjan Sharma, chief economist of Infomerics Ratings, believes that the August 2024 policy is like “gazing into the crystal ball.” He predicted that the MPC will maintain its “withdrawal of accommodation” stance and keep the repo rate unchanged for the ninth consecutive time.