Aug 08, 2024, 3:57 pm IST
RBI Policy Reaction: Ajay Kumar Srivastava, MD & CEO, Indian Overseas Bank
"The RBI MPC’s decision to keep the repo rate unchanged at 6.5% as well as project a GDP growth for FY25 at 7.2 % is a very well-balanced measure that has been undertaken, and we welcome this move. Given that the current global financial markets have been in turmoil on concerns of growth slowdown, the RBI MPC’s decision to maintain its ‘Withdrawal on Accommodation’ stance as well as keep the standing deposit facility rates and marginal standing facility rates unchanged showcases a positive outcome for the banking sector to chart towards further growth."
Aug 08, 2024, 3:57 pm IST
RBI Policy Reaction: Rishi Anand, MD & CEO, Aadhar Housing Finance Limited:
"As expected, the Central Bank kept the repo rate unchanged at 6.5% for the eighth consecutive review. Though the inflation is in downward spiral, we don’t see immediate changes in the repo rate considering global uncertainties, however further moderation in inflation may induce RBI to bring the rates down. The affordable housing sector will benefit if a rate cut takes place by the end of the year, as the government plans to further expand the Pradhan Mantri Awas Yojana and construct 3 crore additional rural and urban houses. Lower interest rates will help the affordable housing sector encourage citizens to become homeowners and lead a better quality of life."
Aug 08, 2024, 3:49 pm IST
RBI Policy Reaction: Arsh Mogre, Economist - Institutional Equities, PL Capital - Prabhudas Lilladher
"The RBI's commitment to maintaining the repo rate at 6.50%, despite international rate cuts, signals a deeper strategy: fortifying the economy against inflationary pressures while cautiously monitoring growth indicators. This approach reflects a profound balancing act, poised between nurturing economic resilience and preempting inflationary spirals, thereby crafting a monetary path that prioritizes sustainable economic health over transient growth impulses."
Aug 08, 2024, 3:48 pm IST
RBI Policy Reaction: Arsh Mogre, Economist - Institutional Equities, PL Capital - Prabhudas Lilladher
“In its latest policy review, the Reserve Bank of India (RBI) underscores a decisive focus on inflation control, starkly contrasting with the easing trends among major global central banks. This stance is not merely reactionary but a calculated alignment with long-term financial stability goals, given the disproportionate influence of volatile food prices on India’s CPI."
Aug 08, 2024, 3:28 pm IST
RBI Policy Reaction: Deepak Ramaraju, Senior Fund Manager at Shriram AMC
"As a fund house, we expected the status quo on the interest rates and the withdrawal of the accommodative stance. Inflation continues to be the number one priority followed by credit growth and deposit mobilization by the banks. RBI continued to keep the inflation forecast for FY 25 at 4.5%. Global factors such as rising interest rates in Japan, geo-political instability in the Middle East, rate cut by the Bank of England and timing of rate cut by the US Fed will influence the future monetary policy stance of RBI."
Aug 08, 2024, 3:28 pm IST
RBI Policy Reaction: Achala Jethmalani, Economist, RBL Bank
"A food for thought policy. In a 4:2 vote the MPC maintained a status-quo on policy rates and stance. With food basket having a weight of 46% in inflation, it cannot be completely ignored. More so, when the risk is due to the nature of food inflation which has been more persistent than transitory. The weight to the thought of tracking inflation excluding food or looking at core inflation was reduced. The proactive liquidity management has kept liquidity conditions benign, and a pivot to easy policy is still a couple of quarters away. The majority of MPC has reiterated on its 4% inflation target and for the banking sector, the Governor (re)emphasised on deposit mobilization as deposit growth has been trailing credit growth. Overall, with the growth forecast of 7.2% YoY and inflation forecast of 4.5% for FY25 the MPC is not seen in a hurry to pivot to cuts in CY24. We still see first rate cut to come through in Q1 CY25."
Aug 08, 2024, 3:26 pm IST
RBI Policy Reaction: Sandeep Yadav, Head-Fixed Income, DSP Mutual Fund
"Todays' RBI policy is in the same vein. If RBI were to sound dovish today, and inflation (or global yields) were to rise thereafter, then RBI would have played all its cards too soon. The base case expectation is that the inflation and growth would come down globally, and in India. However, RBI needs to be aware of what-if scenario."
Aug 08, 2024, 3:26 pm IST
RBI Policy Reaction: Sandeep Yadav, Head-Fixed Income, DSP Mutual Fund
"We stated this last year (2023) when markets expected US CPI to fall and FED to do multiple rate cuts. At that time Powell mentioned risks of early rate cuts were far more than delayed rate cuts. If fed cut early and inflation rose, the damage to economy would be far worse than if fed cut late and growth fell. And how correct was FED, as inflation took about a year to fall closer to projected levels."
Aug 08, 2024, 3:26 pm IST
RBI Policy Reaction: Mihir Vora - CIO, TRUST Mutual Fund
"Domestic Growth continues to be resilient with no change in FY25 projections at 7.2%. Expansion in service sector activity, ongoing revival in private consumption, high-capacity utilization, healthy balance sheet of banks and corporates and Governments thrust on infrastructure spending points to robust growth outlook."
Aug 08, 2024, 3:25 pm IST
RBI Policy Reaction: Mihir Vora - CIO, TRUST Mutual Fund
"The MPC decided to keep the repo rate unchanged at 6.5%. The stance of the policy also remains unchanged at ‘withdrawal of accommodation’. Both the policy rate and the stance was kept unchanged by a majority vote of 4:2. Two members of the MPC, like in the Jun-24 policy voted for a 25bps cut in Repo rate and a change in stance of the policy to ‘Neutral’."
Aug 08, 2024, 3:25 pm IST
RBI Policy Reaction: Mihir Vora - CIO, TRUST Mutual Fund
"The Monetary Policy Committee (MPC) meeting is convened against a backdrop of volatile global environment. The Bank of Japan (BoJ) hiked interest rates by 25 bps last week as inflation continued to remain higher and to arrest the weakening of the Yen against the dollar. The labor market data released last Friday in the US was much weaker than expected. This raised concerns of a faster slowdown in the US and markets have started pricing in accelerated rate cuts by Federal open market committee (FOMC) for this year. "
Aug 08, 2024, 3:25 pm IST
RBI Policy Reaction: Shishir Baijal, Chairman and Managing Director, Knight Frank India
"In line with expectations the RBI continues to maintain policy repo rate at 6.5%, especially considering the inflationary pressures, which is driven by persistently high food prices. Given that the system-wide liquidity is in surplus, by holding the rate steady the RBI seeks to mitigate inflation without stifling economic momentum. This decision underscores the RBI’s commitment to ensuring long-term price stability while fostering a conducive environment for sustainable economic growth. While some high frequency indicators indicate some moderation in growth it is encouraging that the central bank is confident of 7.2% GDP growth for FY25."
Aug 08, 2024, 2:36 pm IST
RBI Policy Reaction: Nikhil Gupta, Chief Economist, MOFSL Group
"As broadly expected, the RBI kept interest rates unchanged. What probably was more important was the Governor's emphasis on the headline inflation (with food inflation playing an important role) and the focus on inflation deceleration when growth remains so good. This, to our mind, indicates that rate cuts are not coming anytime soon (unless growth falters)."
Aug 08, 2024, 2:36 pm IST
RBI Policy Reaction: Anurag Mittal, Head of Fixed Income at UTI AMC
“The monetary policy was on expected lines. While the global market narrative is of a possible growth shock & steep rate cuts from the fed, the RBI remained steadfast in its focus on domestic policy drivers with emphasis on achieving inflation towards 4% in a backdrop of strong domestic growth. We continue to believe that RBI will probably cut rates when it sees hard evidence of a meaningful growth slowdown or stability in inflation, Moderate duration products are better placed in such market construct of easy liquidity & shallow cycles.”
Aug 08, 2024, 2:27 pm IST
RBI Policy Reaction: Sachin Chopda, MD Pushpam Group
"The Reserve Bank of India's decision to keep the repo rate at 6.5% for the ninth time shows its dedication to economic stability. This consistent policy provides certainty to the real estate sector. Stable interest rates mean predictable EMI payments for homebuyers, making property ownership more accessible. Developers can plan their projects confidently, leading to steady investments and job creation. While inflation remains a concern, the RBI's cautious approach balances growth and price stability, benefiting the real estate market."
Aug 08, 2024, 2:26 pm IST
RBI Policy Reaction: Divam Sharma, smallcase Manager, CEO and Co-Founder - Green Portfolio
“This is in continuity with the stance of the governor and our expectations. This is what the markets have been expecting so I don’t see the interest rate decision moving markets. We can compare ourselves with the US because there are issues around inflation fluctuation, rising unemployment, and the withdrawal of Japanese funds. India’s macroeconomics is in a good position and we have more stability in terms of domestic demand which is why we don't see us reacting to global cues from Japan and the US. By maintaining the status quo, RBI is keeping up with its stance of balancing inflation and growth. It’s a positive thing that we, as an economy are able to stay relatively less affected by global cues.”
Aug 08, 2024, 2:14 pm IST
RBI Policy Reaction: Poonam Tandon, Chief Investment Officer at IndiaFirst Life Insurance
"The repo rate has been kept unchanged and has kept status quo on the stance of the policy. The RBI is confident on growth and inflation expectations have been kept unchanged. He also emphasised that the focus will be on CPI inflation and not on the core inflation(which is softening). The Governor has been confident on the strength of India’s macroeconomic fundamentals, which remain robust. The liquidity has increased in the system and the bond market has already discounted a 25bps rate. We do not expect any rate cuts in the near future. Overall, a very balanced policy with status quo continues."
Aug 08, 2024, 2:14 pm IST
RBI Policy Reaction: Madan Sabnavis, Chief Economist, Bank of Baroda
"The RBI has quite unambiguously stated that the focus would be on headline inflation and that one cannot ignore food inflation, especially if it is persistent. This indicates that while inflation will come down in Q2, it will rise in Q3, and one cannot take a rate cut for granted in future. Any decision will be data driven and hence a calibrated call will be taken. The picture may not be very clear in October and hence any change in policy and stance could be more likely not before December. RBI is sanguine on growth and hence there will be no conflict with the current stance taken on policy variable."
Aug 08, 2024, 2:11 pm IST
RBI Policy Reaction: Lakshmi Iyer, CEO - Investments & Strategy, Kotak Alternate Asset Managers Limited
"Status quo on rates and Policy stance Was in line with our expectations. The RBI does not seem to be under any duress to act just because of global developments. Markets to be guided by Development on the global policy front , Domestic inflation, And monsoon progress. Bond yields to continue to find anchor due to FPI buying. We maintain our preference for government bonds over corporate bonds.”
Aug 08, 2024, 1:43 pm IST
RBI Policy Reaction: Madhavi Arora, Lead Economist, Emkay Global Financial Services
"The Governor continued to stress on the spill over risks emanating from higher food prices to generalised inflation. While the MPC has been wary of spill over risks, we do not see core inflation moving above 4% till end-CY24 and averaging at sub-3.75% in FY25. We maintain that growth is sub-par in India and do not subscribe to the RBI’s estimate of FY25 growth at 7.2% (Emkay: 6.5%). Weaker demand dynamics will keep pressuring core inflation. Besides, lower input prices ahead may help ease some pressure on output prices as well."
Aug 08, 2024, 1:43 pm IST
RBI Policy Reaction: Madhavi Arora, Lead Economist, Emkay Global Financial Services
"The fluidity of global Goldilocks narratives, financial markets turmoil and policy repricing’s found little space in the Governor's speech, thanks to recent easing volatility in the financial markets. However, noisy food inflation back home, and a still-elusive 4% inflation target formed the base for the RBI decision making. Understandably, persistent food inflation (with sporadic volatility in vegetables and continued supply tightness in pulses), averaging at 8% in the past 12 months, has prevented durable disinflation."
Aug 08, 2024, 1:25 pm IST
RBI Policy Reaction: V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services
"The status quo in policy rates and stance were on expected lines. The Governor emphasised the need for vigilance on the inflation front saying “price stability is necessary for sustained growth. There is nothing in the policy that will influence the market much. The market will be focused on the US jobs data today and the market’s response to it and the recession fears in the US."
Aug 08, 2024, 1:06 pm IST
RBI Policy Reaction: Aman Trehan, Executive Director, Trehan Iris
"The RBI’s decision to maintain the repo rate at 6.5% for the ninth consecutive time is a commendable move that balances inflation control with economic growth. We as real estate developers, are encouraged by this move as it supports affordable homeownership and enhances market confidence. Moreover, the unchanged repo rate encourages more buyers to invest in their dream homes, particularly in the luxury sector. Additionally, this steady financial environment enables us to continue delivering exceptional living spaces and drive innovation in real estate, ultimately enriching community living and strengthening the housing market."
Aug 08, 2024, 1:03 pm IST
RBI Policy Reaction: Anitha Rangan, Economist, Equirus
"RBI continues to bat for patience as domestic inflation is slowly but steadily trending towards the 4% target. In addition, global volatility, geo-politics adds to the challenges that keeps RBI on watch. RBI cannot afford the slightest error of judgement – perhaps the action of BoJ has put RBI under a bigger guard. Another spanner around deposit challenges from banks also means RBI is not in a mood to cut rates in the near term. Stay patient, stay put, policy rates to remain steady for longer."
Aug 08, 2024, 1:03 pm IST
RBI Policy Reaction: Anitha Rangan, Economist, Equirus
"RBI as widely expected kept policy rate unchanged at 6.5% with a majority vote of 4-2. However clarifying the debate around the importance of targeting headline versus core RBI has clearly stated that food inflation cannot be ignored as a) food inflation is now persistent and not temporary b) public understands inflation more from food c) high food inflation affects household inflation expectations d) unanchored inflation expectations can have spill overs in wages and cost of living which can result in pass through into services especially if demand is steady e) overall, inflation can become sticky if food inflation is ignored. Therefore RBI is not going to ignore food inflation. Overall according to RBI, the pace of inflation is moderating but the moderation is uneven and slow. Therefore patience is required."
Aug 08, 2024, 12:54 pm IST
RBI Policy Reaction: Santosh Meena, Head of Research, Swastika Investmart Ltd
"Although there are signs of a temporary bottom in the global market, Nifty, and Banknifty, there is still a risk of fresh selling pressure at higher levels. Technically, Nifty is forming a bottom around the 50-DMA of 24,000, with important hurdles at 24,350, 24,525, and 24,700. Meanwhile, Banknifty is trying to establish a base around the 100-DMA of 5,000, with the key resistance area lying between 51,000 and 51,500."
Aug 08, 2024, 12:54 pm IST
RBI Policy Reaction: Santosh Meena, Head of Research, Swastika Investmart Ltd
"The recent RBI policy announcement was largely uneventful, with the central bank keeping policy rates unchanged and continuing the withdrawal of accommodation as expected. The focus remains on tackling inflation, with no concerns about growth, and there are no indications of rate cuts in the near term. Consequently, the market will now turn its attention back to global cues."
Aug 08, 2024, 12:53 pm IST
RBI Policy Reaction: Mohit Jain, Managing Director, Krisumi Corporation
“While a rate cut would have been an ideal scenario to propel economic growth across industries including real estate, maintaining the status quo will help prevent borrowing cost from rising, enable affordability, propel the residential demand and boost the overall economy. The RBI’s endeavour to maintain a stable policy environment will benefit not just homebuyers but also real estate developers who have the opportunity to innovate and cash in on the buoyancy.”
Aug 08, 2024, 11:58 am IST
RBI Policy Reaction: Aman Sarin, Director & Chief Executive Officer, Anant Raj Limited
"In the forthcoming RBI Monetary Policy, we hope the positive trend continues and expect favorable news for homebuyers specially in the Affordable and middle class housing."
Aug 08, 2024, 11:58 am IST
RBI Policy Reaction: Aman Sarin, Director & Chief Executive Officer, Anant Raj Limited
"We believe that stable interest rates are particularly beneficial for the real estate sector. When interest rates remain steady, home buyers can plan their purchases without the uncertainty of potential rate hikes. The cost of borrowings too remains stable, thus, the cost of construction."
Aug 08, 2024, 11:57 am IST
RBI Policy Reaction: Aman Sarin, Director & Chief Executive Officer, Anant Raj Limited
"We welcome the Reserve Bank of India's (RBI) decision to keep the policy rate unchanged to maintain economic growth and keep inflation under control. This decision fosters a stable economic environment, which is crucial for sustained development."
Aug 08, 2024, 11:10 am IST
RBI Policy Highlights
Data from the central bank shows that unsecured personal loans surged by 21% at the end of January compared to the previous year. This uptick underscores the need for caution and more stringent oversight in the lending sector.
Aug 08, 2024, 11:10 am IST
RBI Policy Highlights
The RBI had also advised some shadow banks and small finance banks to cap the growth of loans made through co-lending agreements at 20%. These agreements, which allow banks to jointly lend to individuals and spread credit risk, have come under scrutiny due to their rapid expansion.
Aug 08, 2024, 11:09 am IST
RBI Policy Highlights
In a bid to mitigate these risks, the RBI had recently called on banks to conduct rigorous audits on algorithm-based lending models. These models, which use various indicators from cash-flows to home addresses, facilitate near-instantaneous loan approvals. However, the central bank insists that these models must be properly tested and validated to ensure their reliability and accuracy.
Aug 08, 2024, 11:09 am IST
RBI Policy Highlights
The central bank is urging individual lenders to tighten credit in these areas to prevent potential financial instability.
Aug 08, 2024, 11:09 am IST
RBI Policy Highlights
RBI Governor Shaktikanta Das pointed out that the rapid growth in home equity loans, particularly those offered as top-ups on other collateralized loans such as gold loans, poses significant risks.
Aug 08, 2024, 11:09 am IST
RBI Policy Highlights
These loans, originally intended for home improvements, are increasingly being marketed for non-productive uses such as weddings, vacations, and business expansions.
Aug 08, 2024, 10:41 am IST
RBI Governor Says
Inflation is moderating, but the pace of it is slow and uneven.
Aug 08, 2024, 10:40 am IST
RBI Governor Says
We aim that cheque payments are cleared within a few hours of deposit.
Aug 08, 2024, 10:39 am IST
RBI Governor Says
UPI tax payment limit increased to Rs 5 lakh from Rs 1 lakh earlier.
Aug 08, 2024, 10:38 am IST
RBI Governor Says
The public depository will help us prevent unauthorised lending apps.
Aug 08, 2024, 10:37 am IST
RBI Governor Says
We propose to create a public repository of digital lending apps.
Aug 08, 2024, 10:36 am IST
RBI Governor Says
The forex reserves hit a historical high of 5 billion on August 2, 2024.
Aug 08, 2024, 10:35 am IST
RBI Governor Says
We expect current account deficit to remain manageable.
Aug 08, 2024, 10:34 am IST
RBI Governor Says
Banks and NBFCs will be advised to take remedial action.
Aug 08, 2024, 10:34 am IST
RBI Governor Says
The financial sector overall is healthy and stable
Aug 08, 2024, 10:33 am IST
RBI Governor Says
Alternate investment modes are pulling away savings from bank deposits.
Aug 08, 2024, 10:32 am IST
RBI Governor Says
The banks are finding it challenging to raise deposits.
Aug 08, 2024, 10:32 am IST
RBI Governor Says
India has built strong buffers to build resilience against global volatility spillovers.
Aug 08, 2024, 10:31 am IST
RBI Governor Says
The financial system remains resilient and is gaining strength.
Aug 08, 2024, 10:30 am IST
RBI Governor Says
We will continue to be nimble and flexible in liquidity operations.
Aug 08, 2024, 10:29 am IST
RBI Governor Says
Term premium has remained steady in the recent months.
Aug 08, 2024, 10:29 am IST
RBI Governor Says
The public at large understands inflation more in terms of food inflation.
Aug 08, 2024, 10:28 am IST
RBI Governor Says
The MPC cannot afford to look through persistently high food inflation as it may spill over.
Aug 08, 2024, 10:27 am IST
RBI Governor Says
The MPC may look through high food inflation if it is transitory.
Aug 08, 2024, 10:27 am IST
RBI Governor Says
We cannot ignore food inflation pressures.
Aug 08, 2024, 10:26 am IST
RBI Governor Says
We can not and we should not be complacent because core inflation has fallen considerably.
Aug 08, 2024, 10:25 am IST
RBI Governor Says
Q1FY26 CPI inflation is projected at 4.4%.
Aug 08, 2024, 10:24 am IST
RBI Governor Says
Q4FY25 CPI inflation forecast reduced to 4.3% from 4.5% earlier.
Aug 08, 2024, 10:24 am IST
RBI Governor Says
Q3FY25 CPI inflation forecast raised to 4.7% from 4.6% earlier.
Aug 08, 2024, 10:23 am IST
RBI Governor Says
Q2FY25 CPI inflation forecast raised to 4.4% from 3.8% earlier.
Aug 08, 2024, 10:23 am IST
RBI Governor Says
FY25 CPI inflation forecast unchanged at 4.5%.
Aug 08, 2024, 10:22 am IST
RBI Governor Says
High food price momentum is likely to have continued in July.
Aug 08, 2024, 10:21 am IST
RBI Governor Says
Q4FY25 GDP growth kept unchanged at 7.2%.
Aug 08, 2024, 10:20 am IST
RBI Governor Says
Q3FY25 GDP growth kept unchanged at 7.3%.
Aug 08, 2024, 10:20 am IST
RBI Governor Says
Q2FY25 GDP growth kept unchanged at 7.2%.
Aug 08, 2024, 10:19 am IST
RBI Governor Says
Real GDP growth for Q1FY26 is projected at 7.2%.
Aug 08, 2024, 10:18 am IST
RBI Governor Says
Q1FY25 GDP growth target reduced to 7.1% from 7.3% earlier.
Aug 08, 2024, 10:15 am IST
RBI Governor Says
FY25 real GDP growth projection is unchanged at 7.2%.
Aug 08, 2024, 10:14 am IST
RBI Governor Says
The fixed investment activity has remained buoyant.
Aug 08, 2024, 10:14 am IST
RBI Governor Says
Services PMI indicates robust expansion in services.
Aug 08, 2024, 10:13 am IST
RBI Governor Says
Manufacturing activity continues to gain ground on the back of improving demand.
Aug 08, 2024, 10:12 am IST
RBI Governor Says
The domestic economic activities continue to be resilient.
Aug 08, 2024, 10:12 am IST
RBI Governor Says
See significant challenges to global growth in the medium term.
Aug 08, 2024, 10:11 am IST
RBI Governor Says
Inflation is receding grudgingly across global economies.
Aug 08, 2024, 10:10 am IST
RBI Governor Says
We believe that higher growth cannot be sustained without price stability.
Aug 08, 2024, 10:09 am IST
RBI Governor Says
We have decided to focus on inflation mainly to support growth.
Aug 08, 2024, 10:09 am IST
RBI Governor Says
Domestic growth is holding up well on urban consumption.
Aug 08, 2024, 10:08 am IST
RBI Governor Says
We expected moderation in headline inflation on account of favourable base which is likely to reverse in Q3.
Aug 08, 2024, 10:08 am IST
RBI Governor Says
There is a good amount of convergence in market expectations and the RBI Monetary Policy Committee outcome.
Aug 08, 2024, 10:06 am IST
RBI Governor Says
MSF & SDF rates unchanged at 6.75% & 6.25%, respectively.
Aug 08, 2024, 10:05 am IST
RBI Governor Says
RBI MPC decided by 4:2 majority to maintain the 'Withdrawal of Accomodation' stance.
Aug 08, 2024, 10:04 am IST
RBI Governor Says
RBI keeps policy repo rate unchanged at 6.5% by a majority of 4:2.
Aug 08, 2024, 10:02 am IST
RBI Monetary Policy
RBI Governor Shaktikanta Das starts his Monetary Policy speech.
Aug 08, 2024, 9:58 am IST
RBI Policy Expectations: HDFC Bank
"Bottom-line is that the RBI could use this policy to set the stage for an eventual rate cut later this year. If this were to happen, we could see further down moves in bond yields with the 10-year yield moving towards 6.80% levels."
Aug 08, 2024, 9:57 am IST
RBI Policy Expectations: HDFC Bank
"Liquidity balance has improved: Over the last month, system liquidity balances have moved into a surplus due to higher government spending and as the RBI absorbed dollar inflows -- injecting rupee liquidity -- to manage rupee volatility. While the RBI has regularly conducted VRRR operations to absorb surplus liquidity, the WACR (weighted average call rate) has averaged below the policy rate at 6.44% in July 2024 and the central bank seems to be a little bit more comfortable with some liquidity surpluses in the system."
Aug 08, 2024, 9:57 am IST
RBI Policy Expectations: HDFC Bank
"Core inflation has been low: Core inflation has been moderating for over 12 months now and while we could see some pick-up over the coming months (due to base effects, telecom tariff increases and some recovery in demand) it is still expected to average between 4-4.5% for FY25."
Aug 08, 2024, 9:57 am IST
RBI Policy Expectations: HDFC Bank
"Monsoon progress has improved –bodes well for food inflation: Monsoon progress has been healthy with overall rainfall at +6% above the long period average. There are deviations across different regions – with the south recording excess rainfall and the North-west seeing deficient rainfall – but the distribution is expected to improve as the monsoon season progresses. Kharif sowing is also above last years’ level for major crops like rice and pulses. To this extent, food inflation risks seem broadly manageable and “not increasing in persistence” at this stage."
Aug 08, 2024, 9:57 am IST
RBI Policy Expectations: HDFC Bank
"Fed rate cut in September highly likely: For one, expectations of a rate cut by the Fed have increased significantly over the last few weeks, with calls of a 50bps rate cut as early as September and cumulative rate cuts of 115bps expected in 2024. While some of these expectations do seem overstretched at this stage, we do see a high chance of the Fed starting its rate cut cycle in September – delivering a cut of 25bps. This could have implications for the rupee and the RBI could start aligning its monetary policy with the global rate cycle to reduce any significant future policy deviations."
Aug 08, 2024, 9:57 am IST
RBI Policy Expectations: HDFC Bank
"The central bank is expected to keep its policy rate unchanged at 6.5% at its upcoming meeting on 8th August. However, we do see an increasing possibility of either a change in stance to neutral (current stance at “withdrawal of accommodation”) or a dovish pivot in the RBI’s rhetoric in this policy. Although, it does remain a close call."
Aug 08, 2024, 9:25 am IST
RBI Policy Expectations: Manoranjan Sharma, Chief Economist, Infomerics Ratings
"The monetary policy debate in India is almost always conditioned in the context of a trade-off between growth and inflation, depending on the distinctive peculiarities at various points. In the ultimate analysis, both the monetary and the fiscal policy have to move in tandem to trigger a virtuous cycle of high growth and low inflation. This uneasy task is still some distance away and will take some doing."
Aug 08, 2024, 9:24 am IST
RBI Policy Expectations: Manoranjan Sharma, Chief Economist, Infomerics Ratings
"The US Fed’s action at the September meeting also has a bearing on charting the course of monetary policy. A rate cut by the US Fed is on the cards and this rate cut by the “Big Daddy” would have spillover effects across the development spectrum including inducing central bankers to move to a less restrictive Policy. The US Fed Policy could have a lagged effect on the direction, pace, and sequencing of the monetary policy events in India."
Aug 08, 2024, 9:24 am IST
RBI Policy Expectations: Manoranjan Sharma, Chief Economist, Infomerics Ratings
"Given heightened geopolitical dynamics, geoeconomic fragmentation, and the RBI’s unequivocal mandate of monetary stability, which is characterized by moderate and stable inflation, there is a compelling need for caution and vigil on the inflation score. In other words, “If it ain’t broke, don’t fix it”."
Aug 08, 2024, 9:24 am IST
RBI Policy Expectations: Manoranjan Sharma, Chief Economist, Infomerics Ratings
"Despite 7-8 % percent steady growth in Asia’s third-largest economy, all is not well on the inflation front-not by a long shot. These concerns are manifested in inflation breaching the 5 % mark in June 2024 (a five-month high of 5.08 % in June 2024) and persistently sticky food inflation despite continuously declining core inflation. "
Aug 08, 2024, 9:24 am IST
RBI Policy Expectations: Manoranjan Sharma, Chief Economist, Infomerics Ratings
"Our take is that the MPC’s stance in the forthcoming Policy will continue to be “withdrawal of accommodation” and the Repo Rate (last changed in February 2023) will be kept unchanged for the ninth consecutive time."
Aug 08, 2024, 9:23 am IST
RBI Policy Expectations: Manoranjan Sharma, Chief Economist, Infomerics Ratings
"With India reinforcing its position as a “bright spot” in the global economy and straddling well the path of high growth and reasonably contained inflation, the MPC’s August 2024 deliberations assume significance. Two issues most often discussed in the run-up to the Policy are the stance of the RBI and the change, if any, in the benchmark rates."
Aug 08, 2024, 8:48 am IST
RBI Policy Expectations: Sujan Hajra, Chief Economist & Executive Director, Anand Rathi Shares and Stock Brokers
"Pause to continue. Despite these factors, no changes are expected in the RBI’s policy stance on rates or liquidity. With retail inflation still above the RBI’s target rate and high weights of volatile food products in India’s retail basket, the RBI would be circumspect about cutting policy rates pro-actively. At the same time, the coming policy is likely to feature a dovish commentary, reflecting the evolving economic landscape, thus indicating that rate cuts are not far away."
Aug 08, 2024, 8:47 am IST
RBI Policy Expectations: Sujan Hajra, Chief Economist & Executive Director, Anand Rathi Shares and Stock Brokers
"External sector weak. The goods trade balance is faced with near-term risks as domestic and global growth diverge. In Q1, the merchandise deficit expanded 10.8% y/y, with export growth lagging that of imports. Services exports and imports have also stagnated over the past year, keeping the services surplus range-bound. The current account may benefit from easing crude and basic metal prices, reducing import costs. Net Foreign Portfolio Investment (FPI) flows have recovered in the past two months, though the global risk-off sentiment could potentially limit flows into emerging markets."
Aug 08, 2024, 8:34 am IST
RBI Policy Expectations: Sujan Hajra, Chief Economist & Executive Director, Anand Rathi Shares and Stock Brokers
"Food prices to soften; core inflation trending down. Jun and Jul’24 prices indicate a downward trend in core inflation although food prices were high. The beginning of CY24 saw upside risks to core inflation due to rising commodity prices. Weak global demand, however, particularly in the US and China, prevented this persisting. China's focus on industrial production and its weak domestic demand would continue exporting deflation. Vegetable prices were high but would dip as fresh supplies flood the market, benefiting from the high base effect. More sown area is likely to lead to a general decline in food prices. Overall, the outlook is positive, with expectations of easing core and food inflation. It is unlikely, however, that the RBI will adjust its inflation forecasts at its coming meeting."
Aug 08, 2024, 8:34 am IST
RBI Policy Expectations: Sujan Hajra, Chief Economist & Executive Director, Anand Rathi Shares and Stock Brokers
"Domestic growth weakened in Q1. Despite robust Q4 FY24 GDP growth, deceleration was anticipated in Q1 due to the elections and heat. Apr-May’24 high-frequency data confirm this, with core industry output growth weakening to 5.7% (from 6% in the corresponding period last year). Central and state capital expenditure also dipped. Private consumption indicators (PV sales, petrol consumption, credit transfers) showed weaker momentum. With major states receiving normal or above-normal rainfall, however, sowing was better than the year prior."
Aug 08, 2024, 7:43 am IST
RBI Policy Expectations: Emkay Global
"We expect softness in the policy tone, recognizing emanating macro forces and market risks. While curve steepening looks to be a popular trade, consistent repricing of Fed cuts and further unwinding of the Yen carry trade could spill over into the RBI's reaction function and will be cyclically noisy for bonds/FX, in our view."
Aug 08, 2024, 7:43 am IST
RBI Policy Expectations: Emkay Global
"We continue to see easy/surplus system liquidity in H1. While the upcoming policy may not see any rate action, issues like 1) case and timing of policy pivot/stance change, and 2) factors influencing liquidity management ahead would be key for markets."
Aug 08, 2024, 7:43 am IST
RBI Policy Expectations: Emkay Global
"The fluidity of global narratives and policy repricing, in conjunction with surplus banking liquidity, noisy food inflation back home, and a still-elusive 4% inflation target, make it tricky for the RBI to find a balance in its policy biases. Staying relatively hawkish will only create an unwanted INR carry, and increase the problem of plenty for the RBI."
Aug 08, 2024, 7:41 am IST
RBI Policy Expectations: Emkay Global
"Even as domestic dynamics have changed a little from expected lines, there is a lot to digest for the MPC, as it meets this week. While the global Goldilocks narrative suddenly moves to that of a growth scare and deep Fed cuts, massive volatility in global risk assets led by unwinding of the Yen carry trade, risks spillover to domestic financial stability as well."
Aug 08, 2024, 7:09 am IST
Will RBI Change Policy Stance Today?
Parijat Agrawal, Head – Fixed Income at Union Mutual Fund: The inflationary pressures have cooled off and monsoon worries have subsided. The fiscal consolidation seems to have given the required comfort as it follows the glide path. We expect the policy to have a dovish tilt taking cognizance of the recent weakness in global economy and volatility in financial markets. We expect the policy rates to remain unchanged; Monetary Policy Committee may change the stance to neutral.
Aug 08, 2024, 6:38 am IST
A Rate Cut Possible Today?
Sharad Chandra Shukla, Director, Mehta Equities: The monetary policy review (MPC) will maintain it stand of status quo as the GDP growth still strong. However, the policy stance may change as the core inflation is still not with in manageable limits. On the global front Fed will turn cautious due to US labour market concerns. RBI will not do any rate cuts, in the FY 2024-25. Market expecting a cut if we are looking at the behaviour of the bond yields. The benchmark 10-year bond yield is at 6.9%.
Aug 08, 2024, 5:54 am IST
What Real Estate Sector Expects From RBI Policy?
Ramani Sastri, Chairman and MD, Sterling Developers: The repo rate plays a crucial role in determining home loan interest rates and hence, in this context, rate cut would serve as a big boost to homebuyer sentiment and enable better affordability, which is an extremely sensitive factor in the housing market. We expect continued targeted measures by the government to further push real estate growth and unlock its full potential. All in all, the future looks bright and through stable regulatory policies, the real estate sector will play a vital role in achieving India’s trillion economy goal.
Aug 07, 2024, 5:55 pm IST
RBI Policy Expectations: Prabhudas Lilladher
"The RBI's decision to maintain its stance is driven by domestic inflation concerns, notably within the food sector. This focus suggests a calculated wait-and-see approach, aiming for sustainable achievement of the 4% inflation target before considering any rate adjustments."
Aug 07, 2024, 5:55 pm IST
RBI Policy Expectations: Prabhudas Lilladher
"Contrasting with the recent global trend of monetary easing, the Reserve Bank of India (RBI) remains steadfast in its policy stance of “withdrawal of accommodation,” prioritizing inflation stabilization over growth stimulation. Major central banks like the ECB and BoE have initiated rate cuts, while the US Fed is likely to cut rates in September."
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