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To reduce uncertainty in key policy rate movements, the Reserve Bank of India (RBI) will conduct a mid-quarter review of monetary policy, in line with the practice followed by central banks in advanced economies.

More reviews to eliminate surprise

In the latest monetary policy review, the Reserve Bank of India (RBI) has delivered timely policy response to prevailing inflationary pressures in the economy. With the recovery on a firm footing, it is clear that RBI is now focused on containing the elevated inflation levels, even as it paces the monetary tightening process in a predictable manner to hedge against any residual risks to economic growth.

Rein coat for inflation

With GDP growth estimated at 8.4 per cent for the first quarter of the current financial year, the Reserve Bank of India (RBI) and forecasters are confident that India&rsquo;s growth rate for 2010-11, even by conservative estimates, will be around 8.5 per cent. Inflation has been the b&ecirc;te noir of the Indian economy for quite some time, causing RBI to continue with its monetary tightening measures.

Measures in line with market expectations

Investors in fixed deposits would be a happier lot after the Reserve Bank of India&rsquo;s (RBI) moves in the First Quarter Review of Monetary Policy. But potential home loan borrowers may not be happy.

Rush to take loans, invest short term

Its getting a tad tight for India&rsquo;s fifth-largest commercial bank, IDBI. While major banks have managed a growth of more than three per cent in their net interest margins (NIM), IDBI recorded one of the lowest NIM in the June quarter, at around 1.6 per cent. Though, this is 84-basis-point more than that recorded in the same quarter of the previous year.

IDBI: Under pressure

Gap between repo and reverse repo rates may fall further to 100 basis points.

Expect lower volatility in rates

Concerned over deposit growth falling below the projected line, the Reserve Bank of India (RBI) has asked banks to beef up deposit mobilisation to avoid any asset-liability mismatch.

RBI expresses concern over low deposit growth

The Reserve Bank of India&rsquo;s first quarter review of monetary policy for fiscal 2011 has endorsed the strong growth fundamentals of the Indian economy. The GDP growth projection for fiscal 2011 has been raised to 8.5 per cent, despite the continuing uncertainties in the global economy. This indicates RBI&rsquo;s confidence in India&rsquo;s domestic fundamentals, and the relative ease with which India has weathered the global economic storm.

Focus on stability to support sustainable growth

The Reserve Bank of India (RBI) on Tuesday said the Centre should not slacken efforts towards fiscal consolidation, though it had managed to receive higher-than-budgeted revenue through sale of airwaves for mobile telephony services and broadband.

Don't be complacent about fiscal consolidation, govt told

Current inflation rates are clearly steep and pose a risk to a recovery which is otherwise based on very strong fundamentals. Justifiably, inflation is high on the Reserve Bank&rsquo;s radar. Demand from consumers and industry is strengthening fast as a robust economy gathers momentum. Demand pressures are adding to existing supply pressures. Prices of goods and services are rising across the spectrum, from consumer goods to real estate.

Stand on inflation is very reassuring

The Reserve Bank of India (RBI) today raised key rates for a fourth time this year in the face of inflation, which has stayed stubbornly above 10 per cent for the past five months. Banks, however, are not expected to increase lending rates immediately.

RBI raises key rates, but banks may hold on

Interacting with the media after releasing the first quarterly review of the monetary policy, Reserve Bank of India (RBI) Governor D Subbarao shared his thoughts on a spectrum of sectors.

'All of us are chasing the monsoon'

In its quarterly review on Tuesday, the Reserve Bank of India (RBI) lifted the repo rate by 25 basis points to 5.75 per cent and raised the reverse repo rate by 50 basis points to 4.5 per cent, more than the 25 basis point increase economists had expected. Meanwhile, CRR remains unchanged at 6 per cent.

Reactions to the monetary policy

HDFC Bank, Central Bank of India raise FD rates.

Banks start offering more for deposits

HDFC Bank Ltd may increase its lending rates within a few weeks depending on market conditions following its decision to raise deposit rates by between 25 basis points and 75 basis points, Paresh Sukthankar, an executive director of the bank, has said.

HDFC Bank may raise lending rates soon

The Reserve Bank of India (RBI) expected systemic liquidity to be more in deficit than in surplus, RBI Governor D Subbarao said today. He was explaining the reason for RBI&rsquo;s decision to narrow the corridor of repo and reverse repo rates in its quarterly monetary policy review yesterday.

Liquidity to be more in deficit: Subbarao

According to the data by the Reserve Bank of India (RBI), bank credit grew by 21.27 per cent on a year-on-year basis at the end of the fortnight. Outstanding bank credit stood at Rs 33,63,477 as against Rs 34,02,390 crore in the previous fortnight. This is first decline over the last two months.

Bank credit shrinks by Rs 38,913 cr

The rupee weakened, completing its worst month since February 2009, after Europe&rsquo;s debt crisis triggered a surge in markets volatility, spurring investors to sell assets of emerging nations.

Rupee has worst month since February 2009 on outflows

The rupee lost value against dollar as foreign institutional investors (FIIs) resorted to heavy selling of shares on the stock exchanges due to worries over debt crisis in Europe. Dealers said overseas investors were cutting down their investment in Indian shares due to global factors. It is weakening sentiment towards the rupee. Being a current-account deficit country, foreign capital flows are important to offset the shortfall from trade flows.

Rupee goes past 47 as foreign investors sell

Government bonds rose today due to apprehensions of a liquidity crunch caused by the higher-than-expected inflation. Dealers said the 10.16 per cent rise in inflation for May, 2010 (over May, 2009), based on the monthly Wholesale Price Index, was above the market expectation of a 9.60 per cent rise. The annual growth in WPI rate for April 2010 was 9.59 per cent.

Bond yields harden on higher inflation rate

Financial Analysis: Find the Latest Financial News Analysis & Research Updates from all top sources for the Indian Finance industry on Business Standard.

Finance News Analysis, Financial Analysis and Research | Business Standard

Find the Latest Financial News Analysis & Research Updates from all top sources for the Indian Finance industry on Business Standard.

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