Page 3 - Monetary Policy

Flexible inflation targeting helps anchor inflation expectations: RBI study

RBI's report on the transition to flexible inflation targeting highlights its role in managing inflation expectations, despite supply shocks and global inflation factors

RBI's 3-day VRRR sees weak demand amid GST outflows, reporting week

Banks park only ₹57,450 crore in RBI's ₹1-trillion three-day VRRR as they conserve liquidity ahead of GST payments and fortnightly reporting requirements

Managing excess liquidity: Financial markets need more clarity now

Excess liquidity could also incentivise the banking system to extend loans at lower rates

RBI announces ₹1 trn reverse repo auction on July 9 to absorb liquidity

The move follows the central bank's decision last week to conduct a seven-day variable rate reverse repo auction worth Rs 1 trillion

Nifty ends choppy first half of calendar 2025 with nearly 8% gain

Market performance was initially hampered by US trade tensions, escalating geopolitical risks, and an uncertain global growth outlook, with the Nifty 50 dropping as much as 8 per cent by April

Watershed moments: Introduction of RBI's flexible inflation targeting model

FIT model set to be reviewed amid call for excluding food inflation

Obituary: Remembering Dr Radhika Pandey (Dec 18, 1978 - June 28, 2025)

Some of her main research contributions were on household consumption behaviour, analysis of business cycles, the inflation targeting framework and regulation of the financial sector

Robust balance sheets key to boost monetary policy impact: RBI study

A reduction in policy rates can boost investment more if balance sheets are healthier, especially among small firms, finds RBI staff study in its June bulletin

MPC minutes: Frontloaded rate aimed to support growth, faster transmission

RBI's MPC voted 5:1 for a 50 bps rate cut in June to spur growth and boost credit amid benign inflation, with members supporting a shift to a neutral policy stance

RBI fines Fino Payments Bank ₹29.6 lakh for licencing rule breach

The RBI on Friday said it has imposed a penalty of Rs 29.6 lakh on Fino Payments Bank Limited for non-compliance with certain directions on 'Licensing of Payments Banks'. The Statutory Inspection for Supervisory Evaluation (ISE 2024) of the bank was conducted by the RBI with reference to its financial position as of March 31, 2024. Based on supervisory findings of non-compliance and related correspondence in that regard, the Reserve Bank said, a notice was issued to the Fino Payments Bank, advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions. After considering the bank's reply to the notice and oral submissions made during the personal hearing, the central bank found that the charge against the bank was sustained, warranting imposition of monetary penalty, it said. "The bank breached the regulatory ceiling of end of the day balance, as applicable for a payments bank, in certain accounts on several occasions," the

RBI's liquidity measures drive short-term bond rally, widening yield spread

The yield spread between the three-year government bond and benchmark 10-year bond has increased by more than three times to 48 basis points, against 15 bps at the start of FY26

What works in central banking? Striking a balance between talk and action

The latest monetary policy has also gone for a 50-basis-point rate cut, double the anticipated reduction

RBI to end daily VRR auctions from June 11 as liquidity improves

With net banking system liquidity in a surplus and muted demand from lenders, RBI discontinues daily Variable Rate Repo auctions introduced in January

RBI policy: MPC cuts repo rate by 50 bps to 5.5%, shifts stance to neutral

RBI Monetary Policy Committee maintained its GDP growth forecast for FY26 at 6.5%, lowered inflation forecast to 3.7%

RBI's June MPC review: Terminal rate and policy tone to be in view

The six member monetary policy of the RBI has reduced the policy repo rate by 25 bps each in the two previous policy review meetings, in February and April

RBI's cautious stance could cost growth, bold rate cuts need of the hour

Given the long lags in monetary policy's impact on the real economy, too much caution could prove unnecessarily costly

RBI likely to cut rates for third time as inflation stays below forecast

A strong majority of economists, 53 of 61, in a Reuters poll expect the Reserve Bank of India's monetary policy committee (MPC) to cut the repo rate to 5.75 per cent

RBI monetary policy: Laser-focused on supporting economic growth

To give context to the significant turnaround in liquidity conditions, the RBI has purchased government bonds worth ₹5.23 trillion spread-over December 2024-end to May 2025

India's economic growth to moderate in FY26 amid global headwinds: EY

While it will continue to be one of the world's fastest-growing economies, it may have to carefully balance monetary and fiscal policies to sustain its growth momentum

Low inflation is India's tailwind, rate cuts need to watch for global risks

It provides policymakers with much-needed room to counter any global shocks