Corporate India was left wanting for more, following the announcement of a 50-basis-point cut in the cash reserve ratio (CRR) by the Reserve Bank of India (RBI) on Tuesday. At a time when headline inflation has been moderating, most were expecting the central bank to take a firmer stance on growth. What they got instead was what some privately describe as mere &ldquo;tokenism&rdquo;.

Needed: Bold moves, not baby steps

Business Standard

After nearly two years, the stage is set for lending rates to come down. With the Reserve Bank of India (RBI) slashing the cash reserve ratio (CRR) by 0.5 per cent, thereby signalling a reversal of monetary policy stance, bankers indicated lending rates would soften, as the reduction in base rates would happen with a lag.

Bankers: Interest rate easing, but with a lag

Reserve Bank of India Governor D Subbarao on Tuesday went halfway by cutting the cash reserve ratio, which determines the amount of cash banks must keep with the central bank, by 50 basis points (bps) to 5.5 per cent. But, the central bank&rsquo;s refusal to go the full distance was termed &ldquo;woefully inadequate&rdquo; by many in industry.

Subbarao goes halfway, keeps all guessing on rate cut

With the backdrop of economic slowdown, moderation in inflation and very tight liquidity, the Reserve Bank of India (RBI) said it would work to maintain an interest rate environment that helped contain inflation and related expectations, and the risks to growth.

Managing inflation, liquidity deficit and growth are priorities 

Recognising the pressures created by the structural liquidity deficit and the increasing downside risks to growth, the Reserve Bank of India (RBI) slashed the cash reserve ratio (CRR) from six per cent to 5.5 per cent in the third-quarter monetary policy review to boost the confidence of market participants.

'Focus on liquidity & growth': MD Mallya

Prime Minister&rsquo;s Economic Advisory Council Chairman C Rangarajan on Tuesday called RBI&rsquo;s policy action a &ldquo;wise decision&rdquo;. The liquidity easing measures will have an impact on interest rates, he said. &ldquo;The improvement in liquidity conditions will automatically have an effect on interest rates. Improvement in liquidity conditions will lead to softening of interest rates.

RBI move a 'wise decision'

As the Reserve Bank of India (RBI) continues to balance growth and inflation in this volatile environment globally, Governor Subbarao should be commended for shifting in favour of growth as inflation has been contained in the last quarter. On our part, we expect inflation to come off to 7 per cent levels in the March quarter from 7.5 per cent in December. We welcome the timely CRR cut and RBI guidance to tilt in favour of growth given the contained inflation.

'Shift in favour of growth': Kaku Nakhate

The Reserve Bank of India (RBI) on Tuesday said it will be &ldquo;constrained&rdquo; from lowering the policy rate, which is critical to accelerate growth in the domestic economy, unless the government puts in place a credible fiscal consolidation plan.

Govt finances need to improve for policy rate cuts

As was largely expected, the Reserve Bank of India (RBI) made no changes in the policy rate in its latest monetary policy review, but clearly outlined its strategy for managing the competing objectives of containing inflation, while infusing the growth momentum back into the economy. The central bank indicated it expected to lower policy rates, with growth concerns increasingly taking centre stage in its assessment of risks.

'A step forward': Stuart Davis 

Managing inflation has been a key priority for the Reserve Bank of India (RBI) and accordingly, policy rates were raised 13 times since March 2010. This helped keep the financial system in a cash-deficit mode and make the repo rate effective. We have seen a dip in food inflation, but manufacturing inflation continues to be stubborn. At the same time, we have witnessed concern over an economic slowdown and there was a waning of confidence in economic growth.

'Setting the ball rolling': Pawan Goenka

The Reserve Bank of India (RBI) has asked banks not to remain excessively risk-averse while lending to India Inc, as it feels this has slowed the pace of credit growth this financial year.

Excessive risk aversion a worry

The rupee on Tuesday breached the 50-mark against the dollar for the first time in two and a half months, touching 49.93 per dollar after the Reserve Bank of India (RBI) reduced the cash reserve ratio (CRR) to improve liquidity conditions in the domestic financial system. A surge in domestic equity markets also aided the local currency&rsquo;s appreciation.

Re, bond yields up on policy step

The rupee weakened the first time in three days on speculation that oil importers increased purchases of dollars in two months to settle month-end payments.

Rupee records first fall in 3 days

The rupee today zoomed by 77 paise to close at a near 12-week high of 49.31/32, driven by strong capital inflows into rising local stock markets.

Rupee up 77 paise vs dollar on hefty capital inflows

Press Trust of India

The rupee rose on Tuesday, supported by gains in the BSE Sensex and improved global risk appetite as fears of a possible debt default by Greece eased slightly, although dollar demand from oil refiners kept gains under check.

Rupee rises on local shares, outlook positive

Reuters 

The rupee logged its best monthly gains in more than 17 years in January aided by a rebound in foreign fund inflows as investors bet on a monetary easing to accelerate growth in Asia's third-largest economy.

Rupee posts best month in 17 yrs, seen gaining

In tune with the sharp fall in local equities, the rupee lost 48 paise to end the day at 49.79/80 against the dollar, snapping straight four sessions of gains.

Rupee falls 48 paise on dollar demand

The rupee closed at a new 10-month low of 44.39/40 to a dollar on Friday, following increased dollar demand by the corporates. 


Re dives to 10-month low

MARKETS HAVE FACTORED IN A 25 BPS HIKE G V Nageswara Rao CEO commercial banking SBU, IDBI Bank

Market view: To be or not to be?

The government securities market is expected to continue on a bullish note this week as banks and primary dealers are aggressively trading to avoid a depreciation loss in the September quarter.


Bullish trend likely to continue

The slide in the headline inflation rate to 7.81 per cent during the year to September 4 will boost trading sentiment.


Inflation dip to boost liquidity

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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