Main risk is core inflation remaining sticky: Governor
According to the RBI governor, persistent and sticky core inflation remains a cause for concern
Battle against inflation is far from over though the worst is behind us; moderation of inflation will be grudging and uneven, they say
The key takeaway from the governor's 3,000-word statement is 'the battle against inflation is not over'
RBI governor Shaktikanta Das emphasises concerns on core inflation, says overall price momentum high
RBI Policy: After an initial rate hike of 40 basis points on May 4, the RBI has hiked the repo rate by 50 basis points thrice, on June 8, August 5 and September 30
According to experts, after three consecutive 50 basis point rate hikes, the RBI may decide to reduce the rate increase by 25 to 35 basis points for lending rates
CASA occupies a 45% share in overall bank deposits; it is FDs, which make the remaining 55%, which will need the rate adjustment
MPC may decide RBI's response to govt on the matter; Unlike earlier off-cycle meetings in which interest rate action was taken outside schedule without prior notice, this one was announced in advance
The deposits will attract an interest rate of 3%, effective Oct 15. Balances up to Rs 10 cr to earn 2.7% interest
Central bank's MPC has cumulatively increased the repo rate by 190 bps since May
But cautions that fight against price rise will be 'dogged and prolonged'
The MPC is of the view that further calibrated monetary policy action is warranted to keep inflation expectations anchored
To stay safe, keep bulk of portfolio in shorter-duration or target maturity funds
In 2019, when retail inflation was 3%, the policy rate was 5.75%. Now inflation hovers around 7% and the policy rate is 5.9%. It needs to move up
Inflation target retained at 6.7%; trajectory remains uncertain: Governor
If you don't have a surplus, opt for higher EMI rather than longer tenor
The Reserve Bank of India's (RBI's) 50-bps repo rate hike triggered a sharp pullback rally in banking stocks on Friday. The Nifty PSU Bank index did even better with a rise of 3.01 per cent
RBI which announced the review of policy today, decided to increase the policy repo rate by 50 bps to 5.9%
Finally, the RBI is right in not providing a forward guidance in the current uncertain environment but providing a detailed explanation of keeping the stance unchanged