Page 8 - Interest Rates

Inflation declines in Europe again; here's what it means for interest rates

The inflation that has squeezed European shoppers fell more than expected in March to 2.4 per cent, as cost spikes in the grocery aisle eased and overall price rises headed down in the two biggest economies, Germany and France. The annual figure for the 20 countries that use the Euro currency came in below the 2.5 per cent predicted by financial markets and brings the European Central Bank ever closer to its inflation goal of 2 per cent. But analysts say the decline from 2.6 per cent in February, though welcome, would likely not be enough to move up the first interest rate cut from the ECB. The bank meets April 11 but the first reduction in borrowing costs is not expected until June despite an economy that's failing to grow, several analysts said. Food inflation fell to 2.7 per cent from 3.9 per cent, and energy prices dropped by 1.8 per cent, according to Eurostat, the European Union's statistics agency. Meanwhile, core inflation, which excludes volatile food and energy costs, eas

Interest rates on small savings schemes remain unchanged for April-June qtr

The government on Thursday said the interest rates on various small savings schemes will remain unchanged for the quarter beginning April 1, 2024. "The rates of interest on various small savings schemes for the first quarter of FY 2024-25, starting from April 1, 2024, and ending on June 30, 2024, shall remain unchanged from those notified for the fourth quarter (January 1, 2024, to March 31, 2024) of FY 2023-24," said a finance ministry notification. As per the notification, deposits under the Sukanya Samriddhi scheme will attract an interest rate of 8.2 per cent, while the rate on a three-year term deposit remains at 7.1 per cent. The interest rates for popular PPF and post office savings deposits scheme too have been retained at 7.1 per cent and 4 per cent, respectively. The interest rate on the Kisan Vikas Patra will be 7.5 per cent, and the investments will mature in 115 months. The interest rate on the National Savings Certificate (NSC) will remain at 7.7 per cent for the ...

RBI releases MPC schedule for FY25, first interest rates decision on Apr 5

The Reserve Bank of India (RBI) on Wednesday announced the schedule for the bi-monthly monetary policy committee meetings for the new fiscal. The first meeting will be held from April 3-5, while the next will start on June 5, as per an official statement. Typically, the six-member panel votes on a resolution on the third day of the meeting and the governor announces the decision in the first half of the day after the vote is completed. The first two days of the meeting are devoted to deliberations and presentations by subject matter experts to the panel. The second bi-monthly policy review meeting will end on June 7, the statement said, adding that this will be followed by three-day meetings in August, October, December, and February. The six-member panel headed by the governor has three external members. It can be noted that Shaktikanta Das' term as the RBI Governor is set to end in December this year. The MPC has been consistent in holding on to the elevated interest rates and

Switzerland unexpectedly cut key interest rate by 25 basis points to 1.5%

Officials in Zurich lowered their benchmark to 1.5%, the first such reduction for one of the world's 10 most-traded currencies since the pandemic abated

Bank of England keeps key interest rate unchanged at 16-yr high of 5.25%

The Bank of England kept its main interest rate unchanged at a 16-year high of 5.25 per cent on Thursday even though inflation continues to drop from multi-decade peaks. The decision was widely anticipated in financial markets and comes a day after the US Federal Reserve also left its key interest rate unchanged. But unlike the Fed, the Bank of England gave few explicit indications that it was getting ready for a series of interest rate reductions in the months to come. The Swiss National Bank went the other way on Thursday, with a surprise cut to its main interest rate by a quarter of a percentage point. Market expectations that lower UK interest rates were on the horizon got a boost Wednesday with news that inflation fell to a 2.5-year low of 3.4 per cent in February more than anticipated and is now not far off the Bank of England's target rate of 2 per cent. The bank's rate-setting Monetary Policy Committee acknowledged that inflation has been trending lower and could fall bel

RBI Guv, Sebi head meet FM ahead of interest rate meet next month

Reserve Bank Governor Shaktikanta Das on Wednesday called on Finance Minister Nirmala Sitharaman, ahead of the central bank's interest rate-setting panel meeting next month. The minister separately held a meeting with Sebi Chairperson Madhabi Puri Buch at her North Block office, according to a post by Sitharaman's Office on X. These meetings come at a time when the industry is pitching for an interest rate cut, and stock markets are witnessing intense volatility. The RBI has held the benchmark interest rate or repo rate at an elevated level of 6.5 per cent since February 2023. Das-headed Monetary Policy Committee (MPC) is scheduled to meet from April 3-5, the first for the 2024-25 fiscal, in which it is expected to spell out inflation and growth trajectory for the financial year beginning April 1. The RBI, in its policy review last month, projected a GDP growth rate of 7 per cent and average inflation of 4.5 per cent for 2024-25. The Indian economy is estimated to have grown over

China's central bank leaves benchmark lending rates unchanged, as expected

China has set an economic growth target of "around 5%" for 2024, a rate that economists say is ambitious and calls for more stimulus, including monetary and fiscal easing

How Bank of Japan's Kazuo Ueda dismantled world's last negative rate

Both had studied at the Massachusetts Institute of Technology, Summers noted, and both shared a soft-spoken academic air but were "capable of being decisive."

Markets to remain volatile amid US Fed rate decision speculations: Analysts

Stock markets would take cues from the biggest event of the week -- the US Fed interest rate decision, besides tracking the trends in global markets and trading activity of foreign investors, analysts said. Last week, a heavy decline in smallcap, midcap firms, foreign fund outflows and elevated crude oil prices in the international market dented investors' sentiments. Experts said equity markets may remain volatile in the near-term amid a host of global central bank's monetary policy decisions lined up during the week. "This week will place a significant focus on monetary policy, as the Fed will begin its two-day policy meeting on March 19. The US Federal Reserve will announce its interest rate decision after its two-day policy meeting on March 20, 2024," said Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd. Additionally, China will announce the loan prime rate for 1-year and 5-year loans, and the Bank of Japan (BoJ) will announce its interest rate decision on March

ECB will have to gamble with interest rate cut before long, says Wunsch

Euro zone inflation fell in February to 2.6%, but underlying price growth remained stubbornly high, with prices for food, alcohol and tobacco up 4.0% year-on-year and for services 3.9% higher.

Fed is 'not far' from confidence needed to cut rates, says Jerome Powell

Powell's remarks add some additional color about officials' thinking around the timing of the first rate cut, bolstering the idea that such a move could come in the next few months

Interest rates on small savings schemes remain unchanged for Q1FY25

The government on Friday left the interest rates unchanged on various small savings schemes for the first quarter of the next fiscal, beginning April 1, 2024. A notification in this regard has been issued by the finance ministry. "The rates of interest on various small savings schemes for the first quarter of FY 2024-25, starting from April 1, 2024, and ending on June 30, 2024, shall remain unchanged from those notified for the fourth quarter (January 1, 2024, to March 31, 2024) of FY 2023-24," the notification said. The deposit under the Sukanya Samriddhi scheme will attract an interest rate of 8.2 per cent, while the rate on a three-year term deposit remains at 7.1 per cent. The interest rates for popular PPF and savings deposits too have been retained at 7.1 per cent and 4 per cent, respectively. The interest rate on the Kisan Vikas Patra will be 7.5 per cent, and the investments will mature in 115 months. The interest rate on the National Savings Certificate (NSC) will remai

ECB keeps rate unchanged at 4%, may cut in June with 2% inflation in sight

The ECB's latest quarterly outlook offered strong encouragement, putting inflation at 2.3% this year and revising the 2025 forecast down to 2%. For 2026, it's still seen at 1.9%

Federal Reserve in no rush to cut interest rates, says Jerome Powell

In prepared testimony to a House panel Wednesday, the Fed chief said it will likely be appropriate to begin lower borrowing costs "at some point this year," but made clear they're not ready yet

'Private credit returns will be pressured by banks as competition rises'

As banks compete harder to win big deals, recent private credit loans have priced at some of the tightest spreads on record, according to data compiled by Bloomberg

Rising interest rates prompting more people to go in for term deposits

Their share in total deposits increased to 20.6 per cent in December 2023 from 20.2 per cent in September 2023

US Fed's Jerome Powell to double down on 'no rush to cut' message

They're expected to press the Fed chief on why officials are keeping borrowing costs so high, risking damage to the economy, when they've made so much progress on inflation

World economy has growing chance of pulling off soft landing: G20

The statement reflects a relatively upbeat view of a global economy that's struggled in recent years to overcome the impact of the pandemic, soaring inflation and a sharp increase in interest rates

Debt-addicted cos turn towards selling equity as interest costs skyrocket

Late last year, the chief financial officer at Myriad Genetics Inc. took a different tack, one the DNA-testing company hadn't seriously considered in over 16 years - selling shares

FPI selling, liquidity deficit tightening financial conditions: CRISIL

Financial conditions have tightened the economy with liquidity going into a deeper deficit putting upward pressure on short-term rates, according to a research report by CRISIL Market Intelligence and Analytics. The report released during the month also said that foreign portfolio investors turned net sellers further aggravating the tight liquidity conditions. With tightening of the liquidity, the transmission of interest rates improved across lending and deposit rates in January. However, the cumulative rise in most deposit and lending rates remained lower than the 250 basis points of repo rate increase by the RBI since May 2022, the report said. This incomplete transmission of monetary policy prompted the Reserve Bank of India to keep the interest rates unchanged, the research body said in the report. "We believe that the central bank will be active in liquidity management and adopt regulatory measures to prevent excesses in credit growth. We foresee the RBI cutting rates from Ju