RBI MPC Meeting HIGHLIGHTS: MPC decides unanimously to keep repo rate on hold; Shaktikanta Das says high inflation a major risk to macro stability
RBI MPC Meeting Live Updates, RBI Monetary policy repo rate: Catch latest updates on the RBI policy, market expectations, expert views, real-time analysis, and much more, only on the Zeebiz.com blog.
RBI MPC Meeting Live Updates, RBI Monetary policy repo rate: The Monetary Policy Committee (MPC)—chaired by Reserve Bank of India (RBI) Governor Shaktikanta Das—decided unanimously to keep the repo rate unchanged at the existing 6.5 per cent at the end of its three-day, bi-monthly deliberations on October 6. The move of the RBI's rate-deciding panel was in line with the expectations of most economists. The repo rate—or the key interest rate at which the RBI lends money to commercial banks—has stood at 6.5 per cent since February 2023, when the RBI delivered the last of hikes in the latest cycle of monetary policy tightening. The RBI maintained its GDP growth and consumer inflation projections for the current financial year, at 6.5 per cent and 5.4 per cent, respectively.
"Macroeconomic stability and inclusive growth are the fundamental principles underlying a country’s progress. The policy mix that we have pursued during the recent years of multiple and unparalleled shocks has fostered macroeconomic and financial stability," Das said in his opening remarks while announcing the outcome of the policy review. Read the full transcript of the RBI chief's speech
The latest RBI policy review comes at a time when major central banks around the globe continue to struggle against red-hot inflation trying not to damage the pace of growth.
Catch LIVE updates on the October 4-6 review of the RBI's MPC, expert views, real-time analysis and much more, only on the Zeebiz.com blog:
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RBI MPC meeting LIVE | Not really surprised, says Bank of Baroda's Madan Sabnavis
"Not really," says Bank of Baroda Chief Economist Madan Sabnavis, asked if any of the policy announcements left him surprised.
"The RBI went by the expected script. But indication seems to be not to expect any rate cut this year," Sabnavis tells Zeebiz.com.
Thank you! That's all today on Zeebiz.com's blog on the RBI's October monetary policy review
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RBI MPC meeting LIVE | Gold loan limit enhanced for urban cooperative banks
The RBI raised a limit applicable to gold loans for urban cooperative banks (UCBs) on October 6, in a bid to incentivise them to meet their prescribed priority sector lending targets. The limit on loans against gold and gold jewellery now stands at Rs 4 lakh, up from the earlier Rs 2 lakh.
“It has been decided to increase the existing limit for Gold Loans under the Bullet Repayment scheme from Rs 2 lakh to Rs 4 lakh in respect of Urban Co-operative Banks (UCBs) who have met the overall target and sub-targets under the Priority Sector Lending (PSL) as of March 31, 2023. This measure is in pursuance of our earlier announcement that suitable incentives shall be provided to UCBs that have met the prescribed PSL targets as of March 31, 2023,” the RBI chief says. Read more here
Image: Reuters
RBI MPC meeting LIVE | RBI to harmonise internal ombudsman framework
In a bid to strengthen the customer grievance redressal system, RBI Governor Shaktikanta Das says the central bank decided to effect certain changes, and both consolidate and harmonise the internal ombudsman guidelines into a single master direction. The RBI chief mentions that this will further strengthen the customer grievance redressal system of the regulated entities.
The RBI introduced the mechanism in select scheduled commercial banks in 2015. Read more here
RBI MPC meeting LIVE | Here what Shaktikanta Das says on the country's banking system
RBI Governor Shaktikanta Das says that elevated levels of MSF borrowings amidst substantial funds parked under the standing deposit facility (SDF) are symptomatic of skewed liquidity distribution in banks. He also says that it was reflected in the firming up of the weighted average call rate (WACR)—the operating target of monetary policy.
Despite such hardening at the short-end of the term structure, the average term spread in the G-Secs market (10-year minus 91-day Treasury Bills) remained at around 40 basis points in August-September suggesting stable financial conditions, the RBI chief adds. Read more here
RBI MPC meeting LIVE | RBI remains very careful, but a surprise shot can emerge at any point, says Equirus Capital's Anitha Rangan
"While batting defensively on a turning pitch, the RBI remains very careful... However, on a turning pitch, a surprise shot can emerge at any point,” says Anitha Rangan, Economist, Equirus Capital
"The high inflation risk is emanating from volatile food and energy prices both domestically and globally, driven by geo-political factors and climate changes. While headline inflation is expected to moderate in the near term, the RBI did cite that outlook uncertainty on food inflation comes from lower reservoir levels, lower sowing, and volatile global food and energy prices. The positive driver is that core inflation is softening and is critical for keeping the headline inflation lower," Rangan adds.
Read more on what experts say about RBI's October policy review
RBI MPC meeting LIVE | Equities may have to compete with bonds in the short run, says SAMCO MF's Umesh Kumar Mehta
Equities may have to compete with bonds in the short run, says Umesh Kumar Mehta, Chief Investment Officer at SAMCO Mutual Fund. "It is indeed a turning pitch as far as inflation is concerned for the RBI but on the other side, global market forces are scaring all the central bankers on higher bond yields, which are getting stronger by the day. The current pause wouldn’t last long, for that matter, for any central bank," he says.
"The rates are likely to move higher before the actual pivot happens sometime in the middle of the next year. So, Equities will have serious competition from bonds going forward."
Read more on what experts say about RBI's October policy review
RBI MPC meeting LIVE | Economists not surprised by RBI's latest policy action
"Unsurprisingly, the RBI’s MPC decided to keep its policy rate unchanged and retain its stance at ‘withdrawal of accommodation’," says Prasenjit Basu, Chief Economist, ICICI Securities.
"The key change is a much more benign inflation forecast... We continue to expect the next policy move to be a rate cut in Q1FY25," he says.
RBI MPC meeting LIVE | Central bank mentions 'evenly balanced risks' as it maintains its GDP, CPI inflation forecasts for FY24
Here's how the RBI projects GDP and headline inflation in the country, as per the October 6 policy statement:
- Consumer inflation at 5.4 per cent in 2023-24
- 6.4 per cent in Q2
- 5.6 per cent in Q3
- 5.2 per cent in Q4
- 5.2 per cent in the first quarter of 2024-25
- Real GDP growth at 6.5 per cent in 2023-24
- 6.5 per cent in Q2
- 6.0 per cent in Q3
- 5.7 per cent in Q4
Source: RBI monetary policy statement
- Consumer inflation at 5.4 per cent in 2023-24
RBI MPC meeting LIVE | South-west monsoon rainfall recovered in September, says RBI
The south-west monsoon finished six per cent below the long-period average (LPA), the central bank points out.
Here are some of the key points highlighted by the RBI in today’s policy statement:
- Acreage under kharif crops up 0.2% vs last year
- Industrial production (commonly known as factory output) up 5.7% in July
- Core industry output up 12.1% in August
- Services PMIs, and other high frequency indicators indicated healthy expansion in August-September
RBI MPC meeting LIVE | Retail inflation expected to have cooled down further in September after partly easing in previous month, says RBI Governor
RBI Governor Shaktikanta Das says that headline inflation corrected partly in August and is expected to have eased further in September on the back of a moderation in prices, following a surge in July driven by the rates of tomatoes and other vegetables. "A silver lining amidst all these is declining core inflation (CPI minus food and fuel)," the RBI chief says.
“The overall inflation outlook, however, is clouded by uncertainties from the fall in kharif sowing for key crops like pulses and oilseeds, low reservoir levels, and volatile global food and energy prices,” he adds.
Image: RBI webcast
RBI MPC meeting LIVE | Rate-sensitive stocks hold on to the green after RBI maintains status quo
Here's how some of the major stocks in the rate-sensitive baskets (explained earlier on this blog) fare at this hour after the RBI policy matches economists' expectations:
Auto
Stock/index Change (%) CMP/current level Nifty Auto 0.64 16,018.40 TVSMOTOR 0.99 1,513.00 MRF 0.82 1,07,650.05 MARUTI 0.81 10,292.45 M&M 0.77 1,549.75 BAJAJ-AUTO 0.63 5,042.80 TATAMOTORS 0.6 623.3 HEROMOTOCO 0.58 3,034.10 ASHOKLEY 0.35 172.85 EICHERMOT 0.3 3,454.00 MOTHERSON 0.16 92.9 Financial services
Stock/index Change (%) CMP/current level Nifty Bank 0.63 44,492.70 Nifty Financial Services 0.74 19,823.25 BAJAJFINSV 2.69 1,584.00 ICICIGI 1.94 1,321.80 BANKBARODA 1.58 215.9 RECLTD 1.38 283.15 BAJFINANCE 1.32 7,954.40 INDUSINDBK 1.25 1,419.35 HDFCAMC 1.13 2,678.00 BANDHANBNK 1.1 252 CHOLAFIN 1.07 1,212.05 SHRIRAMFIN 1.07 1,857.15 SBIN 1.05 598.35 HDFCLIFE 1.03 630.8 PFC 1 242.95 SBILIFE 0.85 1,285.25 ICICIPRULI 0.8 556.05 LICHSGFIN 0.79 474.8 PNB 0.78 77.7 MUTHOOTFIN 0.74 1,207.70 SBICARD 0.7 795.45 AUBANK 0.62 718.85 KOTAKBANK 0.53 1,743.40 HDFCBANK 0.52 1,543.70 ICICIBANK 0.5 945.6 AXISBANK 0.31 1,006.40 FEDERALBNK 0.14 145.7 IDFCFIRSTB 0.11 92.05 Real estate
Stock/index Change (%) CMP/current level Nifty Realty 0.9 575.1 GODREJPROP 1.73 1,626.95 DLF 1.21 531.35 PHOENIXLTD 0.84 1,784.25 PRESTIGE 0.78 676.55 BRIGADE 0.71 583.95 LODHA 0.67 754.1 SOBHA 0.29 709.25 OBEROIRLTY 0.22 1,093.40 Consumer durables
Stock/index Change (%) CMP/current level Nifty Consumer Durables 0.49 29,262.00 TITAN 1.71 3,271.60 RAJESHEXPO 0.8 502 VOLTAS 0.39 883.55 CROMPTON 0.37 300.95 BLUESTARCO 0.11 877.75 BATAINDIA 0.08 1,625.00 RELAXO -0.02 906 WHIRLPOOL -0.05 1,651.50 AMBER -0.07 2,942.05 TTKPRESTIG -0.24 776.55 HAVELLS -0.29 1,407.30 KAJARIACER -0.31 1,324.35 VGUARD -0.44 293.35 DIXON -0.96 5,098.55 Read more on rate-sensitive stocks here
Meanwhile, benchmark indices Sensex and Nifty add on to their initial gains amid strong buying interest across sectors, with financial, IT, FMCG and auto shares being the biggest movers. The Nifty50 is up 106.1 points, or 0.54 per cent, at 19,651.85, and the leaner, 30-scrip gauge at 65,971.25, up 339.68 points, or 0.52 per cent.
Catch minute-by-minute updates on Dalal Street, and what experts recommend to make the most of your investment portfolio, only on the Zee Business market here.
RBI MPC meeting LIVE | MPC votes 5-1 to maintain policy stance at 'withdrawal of accommodation'
RBI MPC meeting LIVE | BREAKING — RBI pegs GDP growth at 6.6% in first quarter of 2024-25
RBI MPC meeting LIVE | BREAKING — Shaktikanta Das says excessive liquidity can hurt price and financial stability
RBI MPC meeting LIVE | BREAKING—RBI maintains GDP growth forecast for 2023-24 at 6.5%
RBI Governor Shaktikanta Das reiterates that the central bank pegs economic growth at 6.5 per cent in the September quarter, 6 per cent in the December quarter, and 5.7 per cent in the three months ending March 2024.
The central bank estimates GDP growth in the first quarter of the next financial year (2024-25) at 6.6 per cent.
Image: RBI webcast
RBI MPC meeting LIVE | BREAKING—MPC decides unanimously to leave repo rate unchanged
RBI Governor Shaktikanta Das says the MPC has identified high inflation as a major risk to macro stability.
RBI MPC meeting LIVE | BREAKING — India poised to become new growth engine of the world, says Shaktikanta Das
RBI MPC meeting LIVE | Will RBI catch everyone by surprise after three back-to-back policies of 'no change'? Decision due shortly
After delivering the last of the hikes in the latest cycle of monetary tightening, the RBI has maintained a status quo on the repo rate for three straight bi-monthly reviews, in April, June, and August. The rapid hikes in key rates were in tandem with central banks' attempts across the globe to tame red-hot, post-COVID consumer prices.
The RBI has pegged consumer inflation for the current financial year, which ends in March 2024, at 5.4 per cent, and 5.2 per cent the next year (FY25).
Image: Reuters
RBI MPC meeting LIVE | Rate-sensitive stocks hold on to the green; Nifty Bank up more 100 pts
Domestic equity benchmark Nifty50 is holding on to the green, positioned firmly above the 19,600 mark, with a gain of 70-odd points at this hour.
Here's where some of the sectoral gauges of the rate-sensitive spaces stand:
Stock Change (%) Current level NIFTY BANK 0.25 44,322.30 NIFTY AUTO 0.55 16,003.95 NIFTY FINANCIAL SERVICES 0.28 19,733.40 NIFTY PRIVATE BANK 0.22 22,903.95 NIFTY REALTY 0.8 574.5 NIFTY CONSUMER DURABLES 0.48 29,258.55 NIFTY PSU BANK 0.46 5,228.20 BENCHMARK INDICES NIFTY 50 0.33 19,610.95 Sensex 0.32 65,842.38 Catch minute-by-minute updates on Dalal Street, and what experts recommend to make the most of your investment portfolio, only on the Zee Business market here.
RBI MPC meeting LIVE | Most of rate-sensitive stocks rise ahead of RBI policy decision
Stocks of rate-sensitive baskets, containing stocks of auto, financial services, real estate, and consumer discretionary businesses—all those that get impacted by changes in interest rates, have begun the day on a positive note.
Here's a look at some of the top gainers on Dalal Street:
Stock Change (%) BAJAJFINSV 2.46 PHOENIXLTD 2.45 SOBHA 2.04 PRESTIGE 1.46 LODHA 1.37 OBEROIRLTY 1.35 TITAN 1.35 BAJFINANCE 1.07 TVSMOTOR 1.06 MARUTI 1.03 GODREJPROP 1 M&M 0.98 SHRIRAMFIN 0.95 SWANENERGY 0.93 CHOLAFIN 0.91 MAHLIFE 0.87 MUTHOOTFIN 0.85 TATAMOTORS 0.77 SONACOMS 0.76 MRF 0.75 DLF 0.73 INDUSINDBK 0.73 RAJESHEXPO 0.7 ICICIGI 0.66 TIINDIA 0.59 BAJAJ-AUTO 0.54 RELAXO 0.52 BLUESTARCO 0.46 AUBANK 0.43 VOLTAS 0.41 ICICIPRULI 0.4 SBICARD 0.39 HDFCAMC 0.33 HDFCBANK 0.31 KOTAKBANK 0.29 BANKBARODA 0.28 ICICIBANK 0.22 SBIN 0.19 ORIENTELEC 0.16 ICICIBANK 0.15 Catch minute-by-minute updates on Dalal Street, and what experts recommend to make the most of your investment portfolio, only on the Zee Business market here.
RBI MPC meeting LIVE | Ahead of today's policy statement, take a glance at the current levels of repo rate, cash reserve ratio (CRR), statutory liquidity ratio (SLR)
Here's a quick lowdown on the current levels of the key policy rates and reserve ratios:
- Policy repo rate: 6.5%
- Standing deposit facility (SDF) rate: 6.25%
- Marginal standing facility rate: 6.75%
- Cash reserve ratio (CRR): 4.5%
- Statutory liquidity ratio (SLR): 18%
Confused? Here's what they mean in simple terms:
- Repo rate: An interest rate that the RBI charges from commercial banks, such as SBI, PNB and HDFC Bank, for lending short-term funds to them.
- SDF rate: Introduced by the RBI in April 2022, this relatively newer tool enables commercial banks to park their access money with the RBI, if needed. Simply put, this is an option that banks can exercise at their own discretion.
- Marginal standing facility rate: This tool enables commercial banks to borrow money from the RBI at an interest rate that is typically above the repo rate.
- CRR: This ratio determines the portion of a commercial bank's total cash that it needs to keep deposited with the RBI. This deposit does not yield any interest to the bank. The idea is to minimise the operational risks for banks.
- SLR: This ratio determines the minimum portion of its deposits that a commercial bank is mandated by law to maintain, in the form of cash, gold, and other securities. These deposits stay with the bank, not with the RBI.
Image: PTI
RBI MPC Meeting LIVE | When is the rate decision expected?
All eyes are on RBI Governor Shaktikanta Das as he addresses the media today after the conclusion of three-day, bi-monthly discussions at the Monetary Policy Committee (MPC).
The RBI chief will announce the decision at 10:00 am. He will also address a traditional, post-policy press conference at noon.
Image: twitter.com/RBI RBI MPC Meeting LIVE | What about the December policy review? Will there be a revision in repo rate then?
Median forecasts in the poll of economists by news agency Reuters suggest the repo rate—or the key interest rate at which the RBI lends short-term funds to commercial banks SBI, PNB, ICICI Bank, HDFC Bank, and the likes—staying at 6.5 per cent for the rest of the financial year, which ends in March 2024.
The forecasts point to the next possible move being a reduction of 25 basis points (bps) before July 2024.
RBI MPC Meeting LIVE | GDP growth touched a one-year high in Q1
Official data released in end-August showed the country's economy expanded 7.8 per cent in the quarter ended June 30, 2023—its fastest pace in a year—driven by strong services activity and healthy demand. However, a five-year low reading of rainfall during the economy's crucial monsoon season could have dented growth in the following months, say economists.
A majority of economists don't expect the RBI's all-powerful Monetary Policy Committee to deviate from its current policy stance of 'withdrawal of accommodation'. In fact, they see measures aimed at ensuring tight liquidity in the banking system, without hurting economic growth, continuing for now.
RBI MPC Meeting LIVE | October review comes amid two back-to-back months of consumer inflation being well above 6%
Did you know that the RBI has for long kept a medium-term target of containing inflation within +/-2 per cent of 4 per cent?
As retail inflation—or the rate of increase in consumer prices determined by a basket of goods and services in the Consumer Price Index—remains not far from a 15-month high since July, the focus continues to be on managing the flow of money amid limited ability to keep hiking rates at the risk of hurting growth. That is what most economists see continuing in today's policy statement as well.
RBI MPC Meeting LIVE | Ahead of today's policy statement, here's a brief summary of rate decisions in post-COVID era
The RBI's top rate-deciding panel has increased the key lending rate six times in total, between May 2022 and February 2023.
Date Repo rate 10th August, 2023 6.50% 8th February, 2023 6.50% 7th December, 2022 6.25% 30th September, 2022 5.90% 5th August, 2022 5.40% 8th June, 2022 4.90% 4th May, 2022 4.40% 8th April, 2022 4.00% 10th February, 2022 4.00% 8th December, 2021 4.00% 9th October, 2021 4.00% 6th August, 2021 4.00% 4th June, 2021 4.00% 7th April, 2021 4.00% 5th February, 2021 4.00% 4th December, 2020 4.00% 9th October, 2020 4.00% 6th August, 2020 4.00% 22nd May, 2020 4.00% 27th March, 2020 4.40% RBI MPC Meeting LIVE | Can you expect yet another repo rate pause? Here is what economists think
The RBI's all-powerful MPC may keep 'pause' pressed on the repo rate but switch to a bold hawkish tone today. That's what many economists expect in today's policy statement.
The October 4-6 review of the country's monetary policy comes amid a spike in international crude oil benchmarks and sustained economic growth, which means consumer prices will continue to take centre stage.
According to all but one of the 71 economists polled by news agency Reuters in late September, the RBI will likely keep the repo rate unchanged at 6.5 per cent after the conclusion of the October meeting, with one expecting a 25-basis-point hike.
Retail inflation in India came in at 6.83 per cent in August, though easing from a 15-month high of 7.44 per cent the previous month but still well beyond the central bank's target range of 4-6 per cent.
Welcome to Zeebiz.com's blog on the RBI's October 2023 policy review
Follow this space to catch minute-by-minute updates on what the RBI Governor Shaktikanta Das-led Monetary Policy Committee has in store for the economy in terms of the repo rate—the key interest rate at which the RBI lends money to commercial banks, and its projections on inflation as well as GDP. You will also find here the latest views from the cream of experts on Zee Business.
In its last bi-monthly review, held in August, the RBI's all-powerful MPC decided to keep the benchmark interest rates on hold yet again. The RBI's rate-deciding panel, the MPC, has already raised the repo rate by a total 250 bps in six revisions between May 2022 and February 2023.
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