Reserve Bank of India has maintained the status-quo on the key short-term borrowing rate (repo) in its last three policy meets
Currently, the key rate at which the RBI lends to banks is 6%
One reason why SBI had to raise rates so frequently is the rapid rise in bond yields
RBI last month scrapped numerous loan restructuring programmes including Corporate Debt Restructuring, Sustainable Structuring of Stressed Assets or S4A, Strategic Debt Restructuring
The six-member Monetary Policy Committee (MPC), headed by RBI Governor Urjit Patel, is to meet on April 4 and 5 to decide the first bi-monthly monetary policy of the next fiscal
RBI Governor Urjit Patel said, 'Monetary policy has become much more flexible in terms of responding to inflation risks'
Five Monetary Policy Committee members vote in favour of status quo; one votes for 0.25% rise
It is obvious RBI is unhappy not only with fiscal slippage but also with the potential of further slippages via higher MSPs
Urjit Patel said, 'Our projections indicate there may be a slight rise in inflation this quarter but during 2018-19, it will remain around 4.5%'
Bankers welcomed the move saying this extension would benefit both MSMEs
Increase in bond yields poses a conundrum to policymakers, and unless quickly reined in, could derail growth recovery
Though prices eased in December, the winter seasonal food price moderation was less than usual, RBI said
RBI sees pick in credit growth due to bank recapitalisation and resolution proceedings under IBC
In its December review, the MPC had kept the benchmark interest rate unchanged on concerns of a possible price rise
The central bank can openly buy from the secondary market through its open market operations programme
Risks of the govt overspending in 2018-19 are substantial; RBI will certainly have to change its own calculations about monetary policy
A poll by Business Standard of 12 economists and treasurers showed there was agreement that there will be a pause this time
Technically speaking, the market saw a sharp correction that set up a pattern of lower lows. This could indicate further weakness especially since foreign portfolio investors are likely to be net sell
Headline retail inflation, as measured by the consumer price index, had risen to a seven-month high of 3.6 per cent in October
Says recap will be front-loaded for healthy banks; others have to prove efficiency