JR VARMA
Real repo rate too high and could hurt growth, said MPC dissenters
The two external members of the Reserve Bank of India (RBI) Monetary Policy Committee (MPC) who had pushed for a 25 basis point rate cut at the June 7 meeting, Ashima Goyal and JR Varma, said the real repo rate at 2% was too high and could hurt growth, according to the minutes released by the central bank on Friday.
No rate cut seen in August either, but enough signs of a shift in stance
The minutes of the meeting will be available on June 21. Varma and Goyal have argued that high interest rates might be hindering potential growth. They have previously debated that a high real interest rate—the difference between the actual interest rate and inflation—could be compromising growth.
RBI holds rates amid food inflation fears
The Reserve Bank of India (RBI) kept policy interest rates unchanged for the eighth consecutive meeting due to concerns about rising food prices. The central bank raised its economic growth forecast for FY25 to 7.2% from 7%, driven by state investments and broad-based consumption. Despite inflation worries, the repo rate remains at 6.5%. A divide in the Monetary Policy Committee emerged, with two members favoring a rate cut. Equity indices surged, but bond yields rose slightly. Governor Das emphasized India's independent monetary policy stance.
No rate cut seen in August either, but enough signs of a shift in stance
In the normal course of events, the rising dissent in the MPC should have led to more joining the camp of rate cut seekers as data turns benign. Inflation may not have come back to the 4% target, but it's not threatening to soar. For the US, it is at 3.4% in April when the target is 2%.
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.
'Elephant in the room' - inflation - has returned to the forest and should stay there, says Governor Das
The Reserve Bank of India (RBI) kept the policy interest rate and monetary stance unchanged for the seventh consecutive review meeting, citing uncertainties in food prices and leveraging robust growth prospects. Governor Shaktikanta Das emphasized India's relative economic stability amidst global challenges, urging sustained efforts to maintain low inflation.
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RBI wants to keep inflation vigil, MPC’s external members see room to ease a bit
External members of the Monetary Policy Committee suggest reducing policy interest rates due to temporary food shocks and high real interest rates. However, caution is advised as markets are running ahead of policy makers and inflation history suggests challenges in bringing it down.
RBI keeps rates unchanged for sixth time in a row
Status quo maintained, but monetary stance considered irrelevant. Rates to remain unchanged. MPC interest rate decision voted 5 to 1. Financial markets volatile, with banking shares retreating. Experts believe rate easing odds have lengthened.
RBI MPC Meet: J R Varma dissents on both rate and stance decision this time
Prof Jayanth R. Varma voted to reduce the policy repo rate by 25 basis points. While other members Shashanka Bhide, Ashima Goyal, Rajiv Ranjan, Michael Debabrata Patra and Shaktikanta Das voted to keep the policy repo rate unchanged at 6.50 per cent.
RBI holds rates; monetary stance change, rate cuts must wait
The Reserve Bank of India (RBI) has maintained interest rates and monetary stance steady for the sixth consecutive monetary review meeting, amid geopolitical tensions and uncertain food prices. The central bank forecasts the economy will repeat its performance next fiscal, expanding at 7%, and inflation will remain above the target at 4.5%. The panel's focus on the withdrawal of accommodation has led to cracks in the Monetary Policy Committee, with both decisions voted 5 to 1.
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MPC minutes: No change in rates but RBI red-flags likely food inflation
The central bank has projected inflation measured by the Consumer Price Index (CPI) at 5.1% for FY24, higher than the 4% target it chases. This projection was made assuming a normal monsoon distribution, while the rainy season started off with a deficit.
MPC: RBI keeps interest rates unchanged for second time in a row, lowers inflation forecast
The Reserve Bank of India has left interest rates unchanged for the second consecutive monetary review meeting, suggesting it is in no rush to address the cost of funds as the inflation trajectory is sliding, with lower inflation forecast for the fiscal year. The central bank cited adequate supplies and an unlikely demand push as tepid global growth boosted expectations of further easing in commodity prices.
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RBI puts brake on rate increase, but don't celebrate as yet
The six-member Monetary Policy Committee voted unanimously to keep the policy rates unchanged. On keeping the monetary stance at focusing on withdrawal of accommodation, five members voted for it, with external member J.R. Varma against it. The pause is ‘temporary’ to leave sufficient room for further tightening should future pricing behaviour demand so.
RBI increases repo rate by 25 bps to 6.5%, signals a pause
It drew comfort from moderation in headline inflation aided by food prices, but the stubbornly high core inflation - after stripping out the impact of food items and transport fuel - is keeping the Monetary Policy Committee (MPC) wary of declaring victory over price pressures. It estimates inflation to average 5.3% in FY24, above the 4% target. It forecast the economy to expand at 6.4%, a tad lower than what the Economic Survey did.
RBI raises repo rate by 25 bps to 6.5%
It drew comfort from the easing headline inflation aided by food prices, but the stubbornly high core inflation – stripping out food and fuel – is keeping the Monetary Policy Committee (MPC) wary of any premature fallout of easing over the likelihood that inflation could remain above the target next fiscal year too. It estimates inflation at 5.3 percent, above the target of 4 percent.
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Inflation vs growth divide widens over rate trajectory
External members believe that the worsening economic conditions, influenced by the global slowdown and past rate increases since early summer, require the MPC to pause and assess conditions before continuing on the path of further rate tightening, minutes of the last MPC show.
RBI hikes policy interest rates for the fifth time this year
An evolving adverse global economic scenario, influenced deeply by changes in the international supply chain readjustments and financial conditions in the aftermath of liquidity drainage, led the RBI to whittle down growth forecasts even while it retained inflationary expectations amid visible easing in farm and commodity price pressures.
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Reserve Bank of India's rate hike impact on controlling inflation still unclear, MPC Member Varma says
"If there is robust economic growth, then we would like to accelerate the (inflation) reduction to 4%. But if the economy is struggling, then a slower pace of adjustment would be appropriate," Monetary Policy Committee (MPC) member J.R. Varma said. The central bank raised its key policy repo rate by 50 basis points (bps) in August to 5.40%, taking the total rises since May to 140 bps. Its next policy decision is due on September 30.
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Not raising reverse repo rate could make the benchmark ‘irrelevant’: Prof JR Varma
If the central bank is embarking on the path of rate tightening and liquidity normalization, it should ‘say it openly’ instead of holding the reverse repo rate, says Varma.
External members seek first steps in interest rate normalisation: MPC minutes
Earlier this month the committee voted unanimously to keep its benchmark rates unchanged. Varma however, was the only one who dissented against keeping the accomodative stance 'as long as necessary' arguing that low rates are actually fanning inflation rather than helping growth.
Rate standstill fails to hide emerging taper debate on Mint Road
Ultra-easy money might not be available for too long as a dissenting voice on the central bank panel points to increasing recognition of broader pricing pressures.
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