Monetary Policy

Chief Economic Advisor V Anantha Nageswaran on Friday said monetary policy tools such as interest rate adjustments may become less effective in tackling inflation in a world increasingly vulnerable to supply-side disruptions. "Fiscal and other public policy measures will be more important because raising interest rates will not solve the supply-induced problems. If anything, it may even be counter-productive," he said at the 9th Annual Food Systems Dialogue here. Amid persistent supply induced issues, countries will have to use all kinds of flexibilities with regards to the inflation targeting framework, he said. "Since 2022, very few countries have met their inflation target. So, it will be there as a framework, but I think countries will take creative liberties with it, as they have to," he added. Supply chain disruption following the Russia-Ukraine war, which has been ongoing since February 2022, followed by the West Asia crisis, has resulted in soaring prices, especially energy

The Reserve Bank of India may raise interest rates by as much as 75 basis points in the coming months, adding to a 25-basis-point hike on Oct. 7

With inflation expectations difficult to measure in India's context, monetary aggregates offer a valuable cross-check

RBI Governor Sanjay Malhotra urged states to improve expenditure quality, adopt prudent borrowing and cash management practices, and use ULI and programmable CBDC for direct transfers

Crude oil prices are heading into another volatile week, with escalating geopolitical tensions in West Asia keeping supply fears alive and the US Federal Reserve's monetary policy decision expected to dictate market direction, analysts said. With Brent crude already crossing USD 117 per barrel, investors will track developments around the Strait of Hormuz, threats to energy infrastructure, and weekly US inventory data for cues on the next move. The American Petroleum Institute and the US Energy Information Administration will release their weekly stock estimates, while Cushing crude inventories and the Federal Open Market Committee's October 27-28 meeting will be in focus, they added. "The near-term bias remains bullish but highly headline-driven; traders should avoid chasing sharp rallies and monitor geopolitical developments, Fed guidance and weekly inventory data for directional confirmation," said Ajit Mishra, SVP - Research at Religare Broking. Any disruption to energy ...

NBFCs saw stronger credit growth, led by retail and industry lending, while their reliance on bank funding increased following the restoration of earlier risk weights, says RBI Bulletin

Net FDI inflows increased from $9.6 billion a year ago, supported by higher gross inward investment and a slowdown in outward FDI, according to Reserve Bank of India data

With the RBI hiking the policy rate at its recent MPC meeting amid higher geopolitical tensions, fixed deposits could offer a safe harbour for the less risk-averse

Festive cash withdrawals and tighter CRR requirements shrink surplus liquidity, prompting banks to seek short-term funds from the RBI

Measures to curb dollar demand have strengthened the rupee, but raise costs for importers and leave the durability of the recovery uncertain

RBI Governor Sanjay Malhotra says monetary policy and financial stability cannot be separated completely, as the central bank steps up measures to curb rupee volatility

Several banks, including BoB, PNB and Indian Bank, raise repo-linked lending rates by 25 bps after the RBI's policy rate increase, making loans costlier for borrowers

Central banks need to factor in geopolitical risks before they materialise, not treat them as a sideshow

With inflation risks rising, RBI signals a measured tightening cycle ahead

The benchmark 10-year government bond yield rises to 7.24 per cent as the RBI shifts to withdrawal of accommodation, with foreign outflows and oil prices adding pressure

Deposit rates may rise with a lag, credit demand seen holding up

The rupee records its second-weakest close as external pressures and weak dollar inflows weigh; RBI Governor Sanjay Malhotra says the currency may be undervalued

RBI Governor Sanjay Malhotra says profit or surplus is incidental to the central bank's operations, stressing overall economic benefits amid questions over swap costs.

Depending on growth-inflation dynamics, the repo rate could rise to 6-6.25 per cent next year

More repo rate increases are imminent