DISINFLATION
RBI needs to shift focus from inflation management to growth promotion: MPC member Varma
With retail inflation nearing the Reserve Bank of India's (RBI) 4% target, RBI Monetary Policy Committee (MPC) member Jayanth R. Varma emphasized a shift towards promoting growth. He noted that core inflation is benign and projected CPI inflation for 2024-25 is only 0.5 percentage points above target. Varma advocated for a less restrictive monetary policy to balance disinflation and support economic growth, which is expected to be slightly lower in the coming years.
RBI economists call for higher private investments, warn rising food prices could derail disinflation process
RBI economists emphasize the need for higher private investments to drive growth amidst a disinflationary stance to manage spillover effects of elevated food prices, potentially delaying rate adjustments even if CPI hits target levels.
India's disinflation process proving to be arduous thanks to stubborn food inflation: RBI Guv Das
RBI Governor Shaktikanta Das stated that bringing India's retail inflation to the 4% target is challenging due to persistent food price inflation, driven by weather-related supply issues. Speaking at an event, he highlighted that despite moderating core inflation, food inflation remains high, averaging 8% over the past seven months.
As Modi 3.0 begins, where the economy stands, where it's headed
Narendra Modi is set to begin his third term as PM with a full-strength NDA team, amidst optimism for India's economic future. RBI Governor Shantikanta Das highlighted the country's robust economic growth, strong manufacturing sector, recovering rural demand, and promising investment activity. India's external sector remains resilient, with positive growth prospects ahead.
Another vote surprise! Dissent grows in RBI that has more 'elbow room'
RBI Monetary Policy: The Reserve Bank of India maintained key lending rates unchanged for an eighth consecutive time with a larger split in votes. Governor Shaktikanta Das emphasised the need for price stability in the growing economy. The unexpected vote split indicates a potential shift towards a rate cut in future policies, though 'greater elbow room' for price stability may not demand an immediate cut. The RBI's stance aligns with market expectations, with a focus on balancing inflation and growth. Despite robust economic growth, inflation remains a concern.
RBI MPC Highlights: Das & co keep rates unchanged, but dovish clamour grows
The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) kept the repo rate steady at 6.50% for the eighth consecutive meeting. However, a new shift emerged with Ashima Goyal joining Jayanth Varma in voting for a rate cut. The committee continues to prioritize inflation control and forecasts 7.2% GDP growth for FY25, supported by expected robust monsoons and a revival in private consumption.
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RBI maintains interest rates amid growing calls for easier money policy
The Reserve Bank of India (RBI) kept interest rates unchanged in its eighth consecutive meeting, with some members leaning towards easing monetary policy due to concerns about rising food prices. The central bank raised its FY25 growth forecast by 20 basis points to 7.2%, leading to a surge in equity indices. Inflation remains a concern due to global commodity price increases and potential food price spikes.
RBI MPC Meeting 2024 at a glance: Here's a one-stop guide to all key decisions
The Reserve Bank of India's Monetary Policy Committee (MPC) has decided to maintain the current interest rate at 6.5%, following a 4:2 majority decision. The panel projected real GDP growth for FY25 to be 7.2%, up from 7%. The MPC is also maintaining the Standing Deposit Facility rate at 6.25% and the Marginal Standing Facility bank rate at 6.75%.
Macro policy choices unclear, but work cut out on reforms agenda
In FY24, nominal GDP grew 9.6%, CPI inflation recorded 5.4%, and real GDP growth was estimated at 8.2%.
Turkish inflation exceeds 75% but peak in sight
Turkish inflation jumped above 75 percent in May, official data showed Monday, but officials expect consumer prices to have finally peaked in a cost-of-living crisis that has dogged President Recep Tayyip Erdogan. Turkey has been battling soaring consumer prices that prompted Erdogan to drop his opposition to interest-rate hikes to combat inflation.
Heat waves, monsoon will offer RBI some food for thought
RBI has kept its benchmark interest rate unchanged at 6.5% for more than a year, sticking to a relatively hawkish stance as inflation remains above its 4% target. With uncertainty over prices of vegetables and pulses, the RBI is unlikely to shift its stance anytime soon while expectations of a rate cut have been delayed to the end of the year.
Monsoon holds key for RBI's future monetary policy actions
As India faces summer heatwaves, chances of the Reserve Bank of India (RBI) reducing interest rates dwindle. The Bank of Baroda report links severe heat to potential food price impacts, underscoring the monsoon's critical role. Despite forecasts of above-normal monsoon, inflation challenges persist, delaying RBI's policy adjustments. Heatwaves disrupt travel, impacting sectors differently.
MPC keen to keep lid on inflation, show minutes
In the last monetary policy committee (MPC) review on rates earlier this month, the panel decided to keep the policy rates unchanged, stretching the status quo on the cost of funds to at least 16 months.
MPC stresses need for aligning to the 4 per cent target on a durable basis
The Monetary Policy Committee (MPC) members are focusing on aligning inflation to the 4% target on a durable basis. Despite reinforcing inflation, concerns over food inflation remain, and strong growth indicators allow for pause rates for some more time. All members voted for a pause in policy rate to 6.5% and continued with the stance of "withdrawal of accommodation."
MPC Minutes: Food inflation risks elevated, conditions not in place for let-up in restrictive policy stance, says RBI Dy Guv Patra
Members of the Reserve Bank of India's Monetary Policy Committee expressed confidence in the current policy stance but remained cautious about factors like food inflation and external contingencies. They emphasized the need to maintain downward pressure on inflation until clearer risks emerge, with concerns about persistently high inflation figures despite recent dips.
Overnight swap rates hint rate cut hopes ruled out
Overnight indexed swap (OIS) rates in India have shown that derivatives markets have generally relinquished expectations of rate cuts in 2024 as the central bank continues to focus on bringing inflation down to its target of 4%. The OIS market has moved towards pricing out all rate cuts in aggregate, with the hope of nominal rate cuts towards the end of the calendar year.
Heatwave may impact vegetable prices, wheat unaffected, says RBI governor Shaktikanta Das
RBI Governor Shaktikanta Das addressed concerns over potential heatwave impacts on agricultural prices, stating that while wheat prices are unlikely to be affected due to the completion of harvesting, attention should be paid to potential impacts on vegetable prices. The Indian Meteorological Department (IMD) predicts above-normal temperatures and heatwaves from April to June.
Key takeaways from MPC meet: RBI keeps interest rates, inflation & GDP unchanged, but has a warning for growth
Reserve Bank of India Governor Shaktikanta Das announced the Monetary Policy Committee's decision to maintain interest rates at 6.5%. With a 5:1 majority, the committee opts to retain the stance of 'withdrawal of accommodation'. Das stresses on returning India's retail inflation to a sustained 4%. Analysts anticipate MPC aligning with cautious policies of US and UK central banks.
RBI MPC keeps repo rate unchanged at 6.5 per cent for the 7th time in a row; GDP, inflation forecast retained
The RBI-led MPC kept the repo rate steady at 6.5 per cent for the seventh time, confirmed RBI governor Shaktikanta Das. The committee also maintained its 'withdrawal of accommodation' stance while concentrating on liquidity management to control inflation.
What heat waves spell for India: Impact on RBI, biz, food & GDP
Weather experts warn of increasing heat waves in India, impacting daily life, business, and economy. With hotter temperatures forecasted, power demand is expected to rise, putting pressure on power generation and potentially leading to power cuts. Heat waves can also disrupt food production, impacting prices and rural demand, affecting GDP growth.
A tale from inflation to disinflation- dominating the currency dynamics!
In 1975, inflation in the US was fueled by high government spending on the Vietnam War, soaring oil prices due to OPEC's actions, a wage-price spiral driven by strong labor unions demanding higher wages, and loose monetary policy.
RBI Governor Shaktikanta Das highlights main challenges in inflation fight
Reserve Bank Governor Shaktikanta Das has emphasized the importance of stable and low inflation for sustainable economic growth. He highlighted that India has successfully navigated through multiple challenges and emerged as the fastest-growing large economy. The Reserve Bank projects India's economy to grow by 7.0% during 2024-25, marking the fourth consecutive year of growth at or above 7%.
Jahangir Aziz on Budget 2024, fiscal deficit & lack of FPI flows
Jahangir Aziz, Head, Emerging Market Economics at JP Morgan, praises the Indian government's budget consolidation efforts, with the fiscal deficit lower than expected at 5.1%. He emphasizes the need for fiscal consolidation to stabilize India's debt. Aziz believes that the RBI will wait for the Fed to cut rates before doing so itself, as interest rate differentials with the US are currently low. He anticipates that once interest rate differentials narrow, there will be significant portfolio flows into emerging markets, including India, due to low ownership and positioning of emerging market assets.
India’s disinflation process to be slow and protracted: RBI Governor Shaktikanta Das
Listing the key lessons of the post Covid years, Das said that being proactive and nimble footed during a crisis gave RBI the agility to respond speedily to evolving developments.
India's disinflation process to be slow and protracted: RBI Governor Shaktikanta Das
The disinflation process in India will be slow and protracted, with the 4 per cnet inflation target likely to be met only over the medium term, Reserve Bank of India (RBI) Governor Shaktikanta Das said at the Summer Meetings organised by Central Banking, London, UK. Latest data showed India's annual retail inflation cooled to 4.25% in May from 4.7% in April
Commodity crash signals disinflation is taking hold for now
Driving the disinflationary trend are a world economy flirting with recession, Europe’s industrial slump and China’s weaker-than-expected emergence from Covid Zero policies.
Substantial disinflation achieved, but road to be travelled stretches ahead till inflation is at 4 per cent: RBI Bulletin
The Reserve Bank of India (RBI) on Friday published its monthly bulletin where it stated that the Monetary policy is at work and substantial disinflation has been achieved. However, it stated that the committee would keep working till the inflation levels are decline to the target of 4 per cent.
Mary Daly says more Fed rate hikes likely
"It's clear there is more work to do," Daly said in a speech Saturday at Princeton University in New Jersey. "In order to put this episode of high inflation behind us, further policy tightening, maintained for a longer time, will likely be necessary."
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