The central bank is clearly not done yet on rate cuts
The Reserve Bank has been very watchful on the fiscal deficit front both because of its impact on its core mandate of inflation and also from a macro stability perspective
This the first time in 2019 when all members of the MPC unanimously decided to reduce the policy repo rate by 25 basis and change the stance of monetary policy from neutral to accommodative.
A cut in repo sends strong signals to the market that has to, in turn, pick-up the cues
According to a Bloomberg Survey, 31 of 43 economists had projected 25 basis point rate cut while three penciled in a 50 basis points cut.
The policy decision will be announced at 11:45 a.m. in Mumbai, followed by a press conference 15 minutes later by Shaktikanta Das
The RBI had retained its 'neutral' stance after the rate cut in April but traders said a change in this stance to 'accommodative' will be more comforting for markets
The policy repo rate is at 6%. Retail inflation was at 2.92% in April
The RBI's Monetary Policy Committee will meet this week to take a call on the policy rate
The Reserve Bank of India is expected to cut key policy rates by 25 bps in the upcoming monetary policy meeting amid subdued domestic industrial activity and slowdown in trade on the global front, says a report. According to Dun & Bradstreet's latest economy forecast, the trade tensions between the US and other countries will have ramifications on emerging economies like India. "While the upside risks to inflation are currently from the monsoon, reversal in food prices and further rise in oil prices warrant a 'wait and watch' policy mode, the slowdown in the growth momentum is likely to weigh upon the monetary policy decision," Dun & Bradstreet India Chief Economist Arun Singh said. D&B expects a 25-bps rate cut in the Monetary Policy Committee (MPC) meet early next month. The MPC, which decides on key interest rates, will hold a meeting on June 3, 4 and 6. According to the report, on the domestic front, subdued industrial activity and uncertainty on trade will add to the .
The central bank is slated to announce its next bi-monthly policy decision on June 6
RBI had cut interest rate by 25 basis points each in February and April to boost economic growth
The composition and terms of reference of the committee would be announced shortly and the report would be out by the end of August
Deputy Governor Viral Acharya and external member Chetan Ghate voted against a rate cut, while Ravindra Dholakia favoured a change in stance to "accommodative"
Amid dismal deposit growth, banks have not been able to pass on benefits of the earlier rate cuts to borrowers, impacting economic growth
RBI does its bit to boost economic activity
"It is the right of any person - individual or legal corporate entity - to challenge the decision of any authority in the court of law. The RBI cannot be an exception to this"
As far as future rate cuts are concerned, we expect one more 25 basis points rate cut in this cycle
Investors may also spread their investments across several non-convertible debentures, currently promising upward of 9 per cent annually
The central bank has been pushing banks to link lending rates to external benchmarks as the latter were not adequately passing on rate cut benefits to borrowers