Business RBI keeps repo rate, reverse repo rate unchanged

Business RBI keeps repo rate, reverse repo rate unchanged

The rupee's plunge to a new record low of 73.77 against the dollar by falling 44 paise in early trade, too, weighed on investor mood.

The RBI has allowed commercial banks to dig into their statutory reserves to ease the liquidity crunch.

The Reserve Bank of India (RBI) may have revised downwards its inflation projections for 2018-19 and the first quarter of 2019-20, but it has flagged six key risks calling for "a vigil over the next few months". The government welcomed the MPC's assessment and its decision to keep the policy rate unchanged.

The rupee rout on Wednesday has provided a ideal backdrop for the 3-day bi-monthly monetary policy review meeting by the Reserve Bank of India (RBI) in Mumbai.

The rupee, which is the worst-performing major currency is Asia, has dropped about 7 per cent since August when the RBI last raised rates. "Ind-Ra, therefore, believes that one more rate hike this fiscal is a possibility and can not be ruled out", Ind-Ra Principal Economist Sunil Kumar Sinha.

But in a surprise decision, the monetary policy committee led by governor Urjit Patel voted 5-1 to leave the repurchase rate at 6.5 per cent on Friday. Mr. Surendra Hiranandani, Chairman and MD of House of Hiranandani, spoke to Qrius about how sharply the currency and equity market reacted as soon as another rate hike was anticipated to curb inflationary pressures.

The rupee is the worst performing emerging market currency having lost nearly 14 percent since January this year.

Mumbai: With RBI keeping the key rates unchanged on Friday, the investor sentiments' left the markets bleeding with Sensex down over 792 points.

"Focus would now shift to the RBI monetary policy meeting".

The rise in minimum support price for agri-commodities in domestic market added with rising crude in the global scenario has already triggered inflation concerns in the country.

"It seems like RBI chose financial stability over rupee because there is no strong inflation pressure imminently".

"In terms of oil impact, we believe 10% rise in oil causes headline inflation to move higher by about 0.6%", Garg said. "Going forward there are only two options, either we increase rates or we keep them steady". As things stand, inflation is expected to touch 4.5% by the end of the current fiscal year.

Analysts said the rising oil prices are hampering growth and raising interest rates may be inevitable.

This ties in directly to the current volatility in global financial markets, which will further increase the upside risks to inflation in the coming months.



Related Posts

'Only way to rebalance oil market is stopping sanctions on Iran'
In the week ended September 21, crude stockpiles had increased by 1.9 million barrels, after five consecutive weeks of declines. That might not be enough to outweigh supply concerns but the scope for further strong price gains near-term seems limited.

Man, 23, dies after being bitten by sea snake in Australia
A NT police spokeswoman said: "Police will continue with their enquiries and a post mortem will be conducted". The Foreign Office confirmed it is supporting the family of a British man who died in the Northern Territory.

Mercedes calls proving it's better than Ferrari - Hamilton
It was an anti-climax since we didn't do a final lap. "It is not a bad starting position". I'm so proud to be on this journey with them".

Turkish police 'believe dissident Saudi journalist was killed at kingdom's Istanbul consulate'
And Saudi Arabia and OPEC and non-OPEC countries, they've produced 1.5 million barrels a day. Turkey's Foreign Ministry on Wednesday summoned Saudi Arabia's ambassador over Khashoggi.

India pick teenage opener to fix top order
He wasn't sparing any bowler who offered even the slightest of width while respecting some really good deliveries. Balls taken by Prithvi Shaw to score his century, which is the third-fastest by any batsman on Test debut .

Bankruptcy looms, Telltale Games fires half its employees unexpectedly
Telltale released its story-driven games by episode, with each episode driving the plot forward. The final season was released last month, but not all chapters release at once.

Protesters urge Senators to vote 'no' on Kavanaugh as decision looms
The Democrats are still smarting from the previous Supreme Court appointment. " Women will not forget this". But while Kavanaugh's past rulings on access to abortion and contraception may hint at an end to Roe v.

Collins announces support for Kavanaugh, making chances of confirmation almost certain
Christine Blasey Ford has accused Kavanaugh of sexually assaulting her at a house party when she was 15 and he 17 - 36 years ago. But Mr Trump wrote: 'Women for Kavanaugh, and many others who support this very good man, are gathering all over Capitol Hill...

Turkey summons Saudi ambassador over missing journalist
He failed to emerge from the building, with his fiancé raising the alarm and Turkish authorities investigating the incident. The Post said it was "extremely concerned" about Khashoggi. "We will continue to follow the issue very closely", he said.

Manchester United come from behind to give under-pressure Mourinho victory
I think of Louis van Gaal being sacked the evening of an F.A cup final and finding out from other people. "It was very hard to stop them playing".

© 2015 ExpressNewsline. All Rights reserved.