Page 7 - Mpc

MPC's Jayanth R Varma envisions lower inflation, higher growth in 2024

The Indian economy has withstood all geopolitical shocks in the last couple of years and it will also be able to navigate the uncertainties that lie ahead, RBI Monetary Policy Committee (MPC) member Jayanth R Varma said on Sunday. Varma further said he expects a benign outcome in 2024 where inflation comes down and growth remains robust. "The Indian economy has withstood all these shocks ( Russia-Ukraine war, Israel-Hamas war, rising oil prices, Houthi attacks) in the last couple of years, and I do not believe that the geopolitical situation will be significantly worse in coming months than what we experienced in the recent past," he told PTI in an interview. Moreover, Varma, a professor at the Indian Institute of Management, Ahmedabad, said the continued slowdown in China has led to sharply reduced demand for energy and other commodities, and this too has ameliorated the adverse effects of supply shock. "On the whole, I have a great deal of confidence that India will be able to ..

Weak consumption demand key vulnerability for growth: Shashanka Bhide

Shashanka Bhide, one of the three external members of the Monetary Policy Committee (MPC), on Thursday flagged a weak consumption demand as a key vulnerability for growth in the second half of the current fiscal as well as the next financial year. After more-than-expected Q2 growth which printed at 7.6 per cent on the back of a 7.8 per cent clip in Q2, the Reserve Bank in the December policy review revised upwards the FY24 growth projection by 50 bps to 7 per cent. While the government does not have an official GDP forecast number, it expects the economy to grow at 6.5-7 per cent this fiscal. "The September quarter growth at 7.6 per cent was significantly more than what we were expecting. But these numbers, even when they are more positive or favourable, require far more concern. "I believe there are vulnerabilities to this 7 per cent growth assessment. The few major growth drivers include investments that are driving growth, but we see weaker growth in consumption demand," Bhide s

Financial sector set to see churn in 2024 with major leadership changes

Shaktikanta Das, governor of RBI and the chair of the Monetary Policy Committee (MPC), will complete his six-year term in December 2024. Das, who was first appointed in December 2018 for three years

'Cut essential to check high real interest rate', says RBI MPC member

Jayanth Varma, an external member of the RBI's Monetary Policy Committee, has stated that an interest rate cut is required to prevent excessive real interest rates amid changing economic landscape

'Closer to where rates have to be cut to avoid excessive real interest'

Varma says that since monetary policy acts with lags of three to five quarters, rate actions must be based on projected inflation rather than past inflation prints. In an interview with Manojit Saha

Need to keep real rates at level to sustain virtuous cycle: Ashima Goyal

Ashima Goyal tells Manojit Saha in an email interview that the inflation rate does not necessarily have to fall to 4%, but it is essential to be confident that it will stay below 5%

Time to review insurance cover; and buy art: Top personal finance stories

Our best stories this week explain how to review a key component of your financial portfolio and how to invest in art

IIP surges 11.7% in October; retail Inflation jumps to 5.55% in November

IIP surges 11.7% in Oct; uptick in food prices lifts retail inflation to 5.55% in Nov

Central bank and cricket

While the economy seems to be on a firm growth path, the fight against inflation is not over yet. It has not even entered the last round

Encouraging outlook

Inflation is expected to ease in the coming quarters

RBI MPC keeps repo rate unchanged at 6.5% for 5th straight policy review

The central bank raised the GDP growth forecast for FY24 to 7% from 6.5%

Monetary Policy Committee may have underestimated economic growth for Q2

Most economists peg it higher than 6.5%, numbers to come today

Inflation respite

But food prices can pose policy challenges

4% inflation focus may not signal 'higher for longer' rates: MPC members

"The focus, therefore, naturally shifts to the next stage of bringing the inflation to the target level," said Varma, adding that there is no ambiguity in the eventual inflation goal of 4%

Managing expectations

Sustained higher inflation can affect outlook

Turn and bounce

MPC needs to be extremely vigilant

RBI MPC meet: How many Rs 2,000 bank notes are still in circulation?

Das said that it will 'actively' manage the liquidity in the economy. The central bank will undertake open market operations to do so

Monetary policy review: Challenging the status quos and dilemmas

Inflation should remain largely range bound in the coming months (5-6 per cent)

Monetary policy: RBI expects banks to fully transmit rate-hike impact

Market participants believe that the transmission did not occur because surplus liquidity in the banking system remained high due to several reasons, including the withdrawal of the Rs 2,000 banknote

RBI MPC meeting: Key takeaways from Guv Shaktikanta Das' announcements

RBI MPC has decided to continue with the pause on repo rate at 6.5 per cent for the fourth time in a row