The monetary policy committee of the RBI had hiked the policy repo rate by 250 basis points (bps) between May 2022 and February 2023 before hitting a pause
Vigilant in navigating final stretch of disinflation: Das
On the back of sound macroeconomic policies and softer commodity prices, India's growth momentum is likely to be sustained in 2023-24 in an atmosphere of easing inflationary pressures, said the Reserve Bank's annual report released on Tuesday. It, however, added that slowing global growth, protracted geopolitical tensions and a possible upsurge in financial market volatility following new stress events in the global financial system could pose downside risks to growth. "On the back of sound macroeconomic policies, softer commodity prices, a robust financial sector, a healthy corporate sector, continued fiscal policy thrust on quality of government expenditure, and new growth opportunities stemming from global realignment of supply chains, India's growth momentum is likely to be sustained in 2023-24 in an atmosphere of easing inflationary pressures," it said. The RBI's Annual Report for 2022-23, a statutory report of its Central Board of Directors, further said its monetary policy ..
Although transmission of deposit and lending rates has significantly improved in recent times, several factors continue to obstruct effective monetary transmission to these bank rates, RBI has said
Touches upon current economic situation, emphasises banking sector's importance in supporting ongoing revival in economic activities
The working paper titled ''Bank Capital and Monetary Policy Transmission in India'' said banks often face many structural and frictional issues which dampen the transmission of monetary policy
The FM told bankers that interest rate transmission is not happening as expected
Earlier this month, the central bank opted for a status quo on the benchmark interest rate, amid signs of hardening inflation and an uncertain global environment
If the central bank views asset purchases as a way to influence the waning quantity of money, then it should act now. Doing so may well save the day
As for deposits, when banks pare down the rate, it is only for fresh deposits. The old deposits attract the earlier rate.
For ideal monetary transmission, we need two benchmarks - one for loans and another for deposits
Make it mandatory to link savings bank interest rate with an external benchmark. Banks should also make public details of how they calculate their MCLRs