Economic and markets indicators are increasingly signaling a slowing economy, but an even greater worry is a weakness of both consumer and investment sentiment
The Reserve Bank's next policy review meet is scheduled to be held from August 5th to 7th
Here are the few factors that the six-member monetary policy committee would be examining carefully before taking a policy call.
From August to now, Indian crude oil basket has moved up by around 12% , while INR depreciated by 6%
RBI has cut repo by 1.75 per cent since January 2015
ARUNDHATI BHATTACHARYAChairman, State Bank of IndiaThe first policy decision by MPC was more or less along the expected lines with a rate cut of 25 bps from 6.5 per cent to 6.25 per cent. The market, however, was divided on the quantum of the cut. The policy sounds cautious on the inflation trajectory with the target of achieving CPI inflation at five per cent by Q4 FY17. With good monsoon, the pressure from food prices is likely to abate and the inflation trajectory is expected to remain under control in the coming months, beginning November. This will give RBI further scope to cut rates. With the MCLR regime in place, banks are taking baby steps in reducing their interest rates. On a monthly basis, SBI has reduced its one-year MCLR by 25 bps. With this rate cut, the lending rates are expected to come down further. Liquidity conditions are also favourable with the system in surplus mode. Core liquidity has increased from Rs 33,200 crore in August to Rs 48,700 crore in September. Comfo
During the last three years, RBI, while keeping a hawk's eye on inflation, had eased lending rates and liquidity norms progressively, but cautiously
I would call it a 'festival bonanza' to boost the morale of the financial market
A cut in home loan rates will surely help buyers firm up their decision to buy a house this festival season and give a fillip to sales
With reference to "RBI may pause this time, but rate cut likely in Dec" (September 26), the "outcome" of a poll conducted by Business Standard that involved key bankers, economists, rating agency executives and bond market players amply indicates that the Reserve Bank of India (RBI) may maintain status quo when the newly constituted Monetary Policy Committee (MPC) meets at its bi-monthly monetary policy review on October 4. It gains more significance as there is no marked unanimity amongst them over what could possibly be the final call of the new incumbent at the central bank on this matter.However, it's strongly felt that the views of Upasana Bhardwaj, senior economist with Kotak Mahindra Bank, are most convincing in the economic scenario. At the same time, I beg to differ with Soumya Kanti Ghosh, chief economist with State Bank of India though he is confident of a 25-50 basis point rate cut in the ensuing meet. Perhaps, he may be sounding "over-optimistic" as no one else is toeing h
Since January 2015, RBI has reduced its policy rates by 150 basis points to 6.50%
Both the key indices of the Indian equity markets traded flat during a choppy mid-afternoon trade session.