Central bank rate

Mumbai: RBI Governor Shaktikanta Das on Monday said the central bank had acted ahead of time by starting to slash rates in February this year, and hoped the decision to pause the cuts earlier this month will prove to be a right call over time. He also hoped for the US-China truce on trade tariffs, announced over the weekend, would last as he pitched for coordinated efforts to push global growth like those after the 2008 financial crisis. The comments from Das come following a series of five consecutive rate cuts by RBI starting February this year by a cumulative 1.35 per cent. Both the government and RBI have acted in time. And I can say with regard RBI, we have acted a little bit ahead of time in terms of reducing our policy rates. As early as February this year, the RBI saw that there is a growth slowdown, we saw that a momentum for slowdown is building up, so we started cutting rates this year, he said. Speaking at the India Economic Conclave organised by the Times Group, he said … [Read more...] about RBI Saw Growth Slowdown, Acted Ahead of Time by Cutting Rates from February, Says Shaktikanta Das

Mumbai: Trouble never comes alone – and Thursday’s stats pile seems to have lent more credence to that rather dark proverb. Consumer inflation is rather uncomfortable, the latest data showed, even as factory output contracted at a rate not pencilled in by even the most conservative in business. The Index of Industrial Production (IIP) contracted 3.8 per cent in October, while CPI inflation for November climbed to 5.5 per cent. November retail inflation numbers again exceeded the Reserve Bank of India’s target of 4 per cent, reflecting how onion prices have caused food inflation to spike. Contraction in IIP is an indicator of the slowdown pressures and weak demand in the economy despite 135 bps rate cuts by the central bank in the current cycle of rate easing. The latest set of statistics seems to be changing the market perception on future rate action. The Street is now slowly starting to factor in a rate hike in the RBI’s policy meetings in 2020. “If … [Read more...] about Street may factor in rate hike possibility in 2020

India rupee is still overvalued according to former chief economist of World Bank and India's former chief economic advisor Kaushik Basu. He called for managing the level of the currency carefully over a well defined period. "Barring the correction over the past few months, the rupee has been appreciating. My hunch is the right kind of level is Rs 70-71 to a dollar," said Kaushik Basu who is now C. Marks Professor of International Studies and Professor of Economics at Cornell University speaking at the Literature Live, Independence Day Lecture organised by the JSW Group in Mumbai on Monday. "These things have to be done very carefully. This has to be a managed change over a well defined period ( other wise ) things can go out of control” Giving a long-term perspective Prof Basu attributed the higher value to the inflation differential with the advanced economies. "Our exchange rates tended to appreciate over the past couple of years, because India’s inflating faster than … [Read more...] about Rupee is still overvalued, right level Rs 70 to 71: Kaushik Basu

 The 30-share Sensex ended down 66 points at 28,438 and the Nifty ended down 15 points at 8,633.Markets ended lower, amid a choppy trading session as institutional investors booked profits on caution ahead of the two-day US Federal Reserve policy meet which begins tomorrow while further contraction in February WPI data weighed on investor sentiment. The 30-share Sensex ended down 66 points at 28,438 and the Nifty ended down 15 points at 8,633. "Markets have remained edgy ahead of the US Fed policy meet which could hint about the direction of interest rates while weak February WPI data raised concerns over the extent of the economic recovery," said Tirthankar Patnaik, Chief Strategist and Head of Research at Mizuho Bank.The Wholesale Price Index-based for February contracted further to -2.06% compared with -0.39% in the previous month, because of drop in global crude oil prices. Growth of manufactured goods remained flat raising concerns over the strength of the economy. Meanwhile, … [Read more...] about Markets retreat ahead of US Fed meet; HDFC dips 1.7%

The Reserve Bank of Governor, Shaktikanta Das, has said that there are signs of investment cycle picking up as shown by a survey done by the central bank of unaudited financial statements of 1,539 listed manufacturing companies. Citing the survey results, the RBI governor said that the manufacturing firms have increased investments in fixed assets. 45.6 % of the funds available with them were deployed in fixed asset as compared to 18.9% last year, the governor highlighted. However, he added that it could be a little early to definitively say anything. The survey also showed that companies are using surplus funds to deleverage their books before they restart their investment plans. He also said that many companies are not availing working capital loans to the full. There is a certain amount of capital which needs to feed into investment cycle. The RBI governor assured that the central bank will intervene whenever needed to address concerns regarding growth. The governor said that the … [Read more...] about Survey shows investment is picking up, says RBI Governor Shaktikanta Das