From the RBI's shift to calibrated tightening and health-insurance copayments to India's tax reform journey, aviation security, today's opinions examine policy trade-offs and institutional change
RBI to issue FAQ document to clarify reporting needs
With the RBI changing its monetary policy stance from 'neutral' to 'calibrated tightening ', experts on Wednesday said that the central bank would go for another rate hike of up to 50 basis points in its upcoming December policy. The next bi-monthly monetary policy is due on December 4. Earlier in the day, the Reserve Bank of India raised its benchmark interest rate by 25 basis points to 5.50 per cent, its first increase in nearly four years, and signalled that further hikes could follow as rising inflation and a weakening currency prompt a policy pivot. Anticipating the rate hike by the RBI, Bajaj Finance has raised interest rates on its fixed deposits by 15 to 40 basis points across all tenures from 12 to 60 months. The revised rates take effect from October 7 and apply to both fresh deposits and renewals, Bajaj Finance said in a statement. The biggest increase is on longer tenures, it said, adding, interest rates on deposits for 31 to 60 months rise by 35 basis points for regul
Malhotra said financial markets can be irrational in the short run and noted that measures including the REER suggest the rupee may be undervalued
Axis Bank, Karnataka Bank, PNB, AU Bank and City Union Bank are the 5 bank stocks identified by Ajit Mishra of Religare Broking and Hitesh Rathi of Angel One based on the technical chart set-up.
Going ahead, crude oil prices, food inflation, the rupee and global monetary conditions will be the key variables to watch.
A 25-bps hike today may reduce some near-term policy flexibility, but it also lowers the risk of having to undertake a much sharper adjustment later, said Sujan Hajra, chief economist at Anand Rathi
The more important signal from here will be the RBI's forward guidance, analysts said, and whether this marks the beginning of a broader tightening cycle.
The Governor acknowledged that price pressures are increasingly extending beyond food and fuel.
RBI's MPC hiked the repo rate by 25 basis points to 5.5 per cent from 5.25 per cent.
The yield on India's 10-year bonds jumped 5 basis points to 7.27 per cent after the decision and was up 8 bps compared to Tuesday's close of 7.19 per cent, according to data on Bloomberg.
The Reserve Bank of India's Monetary Policy Committee unanimously hiked the repo rate by 25 basis points to 5.5 per cent from 5.25 per cent.
The RBI's new calibrated tightening stance signals that further rate hikes remain possible as the central bank responds to inflation and economic risks
Crude below $100, earnings optimism, and oversold recovery lift sentiment
The Nifty Private Bank index advanced over 1%, while the Bank Nifty and Nifty PSU Bank index rose 0.6% and 0.3% respectively on Tuesday, a day ahead of the RBI policy decision.
A hike would put the Reserve Bank of India alongside Asian peers that have already begun tightening and mark the first such move under Governor Sanjay Malhotra
RBI MPC meet: At its August monetary policy review, the RBI kept the repo rate unchanged at 5.25 per cent and maintained its 'neutral' stance
The Reserve Bank's Monetary Policy Committee began its three-day meeting on Monday and is likely to raise rates by 25 basis points, aligning with the central banks' hawkish stance amid escalating conflicts in West Asia that pose risks for domestic inflation. An interest rate hike by the RBI in its upcoming monetary policy would mark a stance reversal, following rate cuts in 2025 and a prolonged pause thereafter, according to a PTI poll of 16 economists and bankers. "Insights, assessments, and the way forward-set to unfold soon," the Reserve Bank said in a social media post while announcing that the monetary policy statement will be announced on October 7 at 10 am. The last repo rate hike was in February 2023, when the RBI raised the rate by 0.25 per cent to 6.50 per cent. It kept the rate unchanged through 2023-24 before beginning its rate-cut cycle in 2025. Currently, the RBI's policy repo rate stands at 5.25 per cent. A majority of participants in the PTI poll expect a rate hike
Nearly 60% of economists polled by Reuters, 35 out of 61, expect a 25-basis-point rate hike at RBI's policy meeting on Wednesday
The Reserve Bank of India (RBI) is likely to increase the repo rate by 0.25 per cent in the October monetary policy review due to mounting inflationary pressure amid the re-escalation of the West Asia crisis and also the rate hikes by global central banks, according to economists and bankers. If the RBI increases the rate in the upcoming policy, it would mark a reversal in the interest rate policy, which has witnessed rate cuts in 2025 and an extended pause thereafter, according to a PTI poll of 16 economists and bankers. The last repo rate hike was in February 2023, when the RBI raised the rate by 0.25 per cent to 6.50 per cent; it then kept the rate unchanged through 2023-24 before beginning its rate-cut cycle in 2025. Currently, the RBI's policy repo rate stands at 5.25 per cent. "Coordination with global central bank hikes, rising inflation risks and strong growth momentum provide policy space to hike," said Kanika Pasricha, chief economic advisor at Union Bank of India. Furthe