"Overall the case has been very convincingly laid out for a rate cut in the overall background of moderate growth especially on the trade front with global headwinds. There is no mention of fiscal risks in the entire document. This clearly shows that the firm focus is back on 'price stability' based on actual data while supporting 'growth'" Bekxy Kuriakose, Head – Fixed Income, Principal Mutual Fund.
RBI MPC has surprised all stakeholders in the market with rate revision of .25 bps. On grounds of easing out inflation rate and stable recovered crude oil rates along with world trade movements. Other major announcements are easing ECB policies for external borrowings. Limit for without collateral loans to farmers also increased to 1.6 lacks from earlier 1 lack, it could be more impactful politically than economically in election season, though an adverse impact on health of banks specially nationalized one cannot be completely rolled out. All in all MPC decision looks positive and aiming to growth - Shivendra Foujdar, Founder and Managing Partner, Avighna Trades.
The first Monetary Policy Committee (MPC) meeting under RBI Governor Shaktikanta Das, and an ideal ‘positive’ to mark the same – a rate cut by 25 bps; change in stance to ‘neutral’. The repo rate now will be 6.25 percent, while the reverse repo rate stands reduced to 6 percent. This is the perfect follow-up to the Budget Speech by Finance Minister Piyush Goyal, and this will not just enhance liquidity in the economy but also boost investment and give the economy a positive growth phase. The option for further rate cuts in forthcoming reviews remains an option, and I hope we will see more such ‘positive moves’ from the RBI. From a real estate perspective, this will impact home loan interest rates, and reduced EMIs are among the best harbingers of positive sentiment, leading up to further off-take of real estate across India - Niranjan Hiranandani, National President, Naredco and Founder & MD, Hiranandani Group.
The rate cut decision has been justified on the back of a sharp cut in projected headline inflation by the RBI. We think the combination of reflationary budget last week along with monetary easing by the RBI will provide a further boost to the consumption demand. We believe the implication for inflation is somewhat on the higher side and RBi may have taken a benign view in this respect - Dhananjay Sinha, Head of Research, Economist & Strategist, Emkay Global Financial Services.
This rate cut means a lot for the market as it is announced post budget. With clear words from RBI, the rate cut has accounted for every phenomenon. The recent changes in the tax rates, the relaxations, GST and the expense and the revenue of the budget. Though it primarily aims to keep inflation in a tab and boost growth, this is a much-needed breather for market and specifically interest rate sensitive sectors like Housing, Automobile, and also it will to an extent try to settle the dust of recent liquidity crunch post the ILFS fiasco - Mustafa Nadeem, CEO, Epic Research.
The decision to remove the 20 percent single issuer limit for corporate bonds is a good move as it had hampered genuine foreign investor flows into Corporate Bonds. We though do not expect large flows immediately as fiscal concerns and political uncertainty will weigh on investor sentiment - Pankaj Pathak - Fund Manager - Fixed Income, Quantum Mutual Fund.
The RBI MPC has delighted market participants by changing stance to neutral and cutting repo rate by 25 bps. Q3FY20 inflation expectation cut to 3.9% means some more rate cuts can be expected in the course of the next few meetings. While Bond yields are yet to respond to the rate cut, we think they may start to fall materially when FPIs revise their short term view on India (overcoming their fears on fiscal situation). Equity markets could rise some more, welcoming an attempt to address recent issues in the credit markets, ultimately leading to higher growth - Dhiraj Relli, MD & CEO, HDFC Securities.
With an extremely benign inflation reading and limited risks to the upside and with the INR having stabilized, it was it was clear to us that the time is right to provide the much-needed support to economic growth. This could also be gauged from the RBI policy announcement, where members unanimously voted in the favour of changing their policy stance to Neutral from that of Calibrated Tightening. To our mind, it was only a matter of whether rates were cut in today’s meeting or the during the next policy meet of RBI. In our recent strategy note post Union Budget, we opined that while the Central Bank will take cognizance of the budgeted pause in the fiscal deficit glide, it will not hold back from cutting the Repo rate - Amar Ambani, President and Head of Research, YES Securities.
RBI MPC meet: Key highlights from the policy document
The RBI's monetary policy committee on February 7 cut benchmark lending rate by 25 bps and changed its stance to "neutral" from "caliberated tightening".
The repo rate been lowered to 6.25 percent from 6.5 percent, and reverse repo rate has been adjusted to 6 percent. Future MPC decisions on rates will be data driven, RBI Governor Shaktikanta Das said in his address to the media.
M Saraswathy: Das says there is no proposal to make changes in its February 12 circular. The latter had directed lenders to refer any loan account over Rs 2,000 crore to the Insolvency & Bankruptcy Court if it is not resolved within 180-days of default
M Saraswathy: On reducing the number of banks under RBI's Prompt Corrective Action (PCA) framework, Das said as long as there is an improvement in parameters, it will take a call on removing banks from this framework
Das says that the RBI will be meeting banks on the transmission of rate cuts soon.
There is no need to revise the February 12 circular on bad loans as of now, RBI Governor says.
M Saraswathy: On what should be the ideal real interest rate, Deputy Governor Viral Acharya says he has never been a fan of pinning down a number. To this, Governor Das chipped in that interest rate of banks depends on their risk perception
MPC pegs April-September inflation forecast at 3.2-3.4%; cuts Q4 FY19 estimate to 2.8%
The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) on February 7 pegged H1 FY20 (April-September) inflation at 3.2-3.4 percent, assuming a normal monsoon. It also pegged inflation at 3.9 percent in Q3 FY20. For this fiscal, it revised downwards its inflationary estimates to 2.8 percent in Q4.
RBI Monetary Policy: A quick read of the policy document
The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) on February 7 voted to cut the repo rate by 25 basis points and changed its stance from ‘calibrated tightening’ to neutral.
Following are the key takeaways from the monetary policy: Repo rate cut by 25 basis points and stance of policy changed from calibrated tightening to neutral.
RBI Monetary Policy: A quick read of the policy document
The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) on February 7 voted to cut the repo rate by 25 basis points and changed its stance from ‘calibrated tightening’ to neutral.
Following are the key takeaways from the monetary policy: Repo rate cut by 25 basis points and stance of policy changed from calibrated tightening to neutral.
M Saraswathy: On growth, Das says RBI is monitoring external situations closely. "There are both upside and downside risks to growth." He added that monsoon, Brexit and crude oil prices are risk factors.
M Saraswathy:Das says there is no room for fly-by-night operators after relaxations in the Insolvency & Bankruptcy Code
The lending rates decided by banks are based on their risk perceptions of the borrowers, says Das.
RBI Governor Shaktikanta Das says that RBI is monitoring the external situation closely as there are several upside and downside risks to growth projection. He lists crude oil prices, trade wars, Brexit as some of the key risks to domestic growth.
"Overall the case has been very convincingly laid out for a rate cut in the overall background of moderate growth especially on the trade front with global headwinds. There is no mention of fiscal risks in the entire document. This clearly shows that the firm focus is back on 'price stability' based on actual data while supporting 'growth'" Bekxy Kuriakose, Head – Fixed Income, Principal Mutual Fund.
RBI MPC has surprised all stakeholders in the market with rate revision of .25 bps. On grounds of easing out inflation rate and stable recovered crude oil rates along with world trade movements. Other major announcements are easing ECB policies for external borrowings. Limit for without collateral loans to farmers also increased to 1.6 lacks from earlier 1 lack, it could be more impactful politically than economically in election season, though an adverse impact on health of banks specially nationalized one cannot be completely rolled out. All in all MPC decision looks positive and aiming to growth - Shivendra Foujdar, Founder and Managing Partner, Avighna Trades.
The first Monetary Policy Committee (MPC) meeting under RBI Governor Shaktikanta Das, and an ideal ‘positive’ to mark the same – a rate cut by 25 bps; change in stance to ‘neutral’. The repo rate now will be 6.25 percent, while the reverse repo rate stands reduced to 6 percent. This is the perfect follow-up to the Budget Speech by Finance Minister Piyush Goyal, and this will not just enhance liquidity in the economy but also boost investment and give the economy a positive growth phase. The option for further rate cuts in forthcoming reviews remains an option, and I hope we will see more such ‘positive moves’ from the RBI. From a real estate perspective, this will impact home loan interest rates, and reduced EMIs are among the best harbingers of positive sentiment, leading up to further off-take of real estate across India - Niranjan Hiranandani, National President, Naredco and Founder & MD, Hiranandani Group.
The rate cut decision has been justified on the back of a sharp cut in projected headline inflation by the RBI. We think the combination of reflationary budget last week along with monetary easing by the RBI will provide a further boost to the consumption demand. We believe the implication for inflation is somewhat on the higher side and RBi may have taken a benign view in this respect - Dhananjay Sinha, Head of Research, Economist & Strategist, Emkay Global Financial Services.
This rate cut means a lot for the market as it is announced post budget. With clear words from RBI, the rate cut has accounted for every phenomenon. The recent changes in the tax rates, the relaxations, GST and the expense and the revenue of the budget. Though it primarily aims to keep inflation in a tab and boost growth, this is a much-needed breather for market and specifically interest rate sensitive sectors like Housing, Automobile, and also it will to an extent try to settle the dust of recent liquidity crunch post the ILFS fiasco - Mustafa Nadeem, CEO, Epic Research.
The decision to remove the 20 percent single issuer limit for corporate bonds is a good move as it had hampered genuine foreign investor flows into Corporate Bonds. We though do not expect large flows immediately as fiscal concerns and political uncertainty will weigh on investor sentiment - Pankaj Pathak - Fund Manager - Fixed Income, Quantum Mutual Fund.
The RBI MPC has delighted market participants by changing stance to neutral and cutting repo rate by 25 bps. Q3FY20 inflation expectation cut to 3.9% means some more rate cuts can be expected in the course of the next few meetings. While Bond yields are yet to respond to the rate cut, we think they may start to fall materially when FPIs revise their short term view on India (overcoming their fears on fiscal situation). Equity markets could rise some more, welcoming an attempt to address recent issues in the credit markets, ultimately leading to higher growth - Dhiraj Relli, MD & CEO, HDFC Securities.
With an extremely benign inflation reading and limited risks to the upside and with the INR having stabilized, it was it was clear to us that the time is right to provide the much-needed support to economic growth. This could also be gauged from the RBI policy announcement, where members unanimously voted in the favour of changing their policy stance to Neutral from that of Calibrated Tightening. To our mind, it was only a matter of whether rates were cut in today’s meeting or the during the next policy meet of RBI. In our recent strategy note post Union Budget, we opined that while the Central Bank will take cognizance of the budgeted pause in the fiscal deficit glide, it will not hold back from cutting the Repo rate - Amar Ambani, President and Head of Research, YES Securities.
RBI MPC meet: Key highlights from the policy document
The RBI's monetary policy committee on February 7 cut benchmark lending rate by 25 bps and changed its stance to "neutral" from "caliberated tightening".
The repo rate been lowered to 6.25 percent from 6.5 percent, and reverse repo rate has been adjusted to 6 percent. Future MPC decisions on rates will be data driven, RBI Governor Shaktikanta Das said in his address to the media.
M Saraswathy: Das says there is no proposal to make changes in its February 12 circular. The latter had directed lenders to refer any loan account over Rs 2,000 crore to the Insolvency & Bankruptcy Court if it is not resolved within 180-days of default
M Saraswathy: On reducing the number of banks under RBI's Prompt Corrective Action (PCA) framework, Das said as long as there is an improvement in parameters, it will take a call on removing banks from this framework
Das says that the RBI will be meeting banks on the transmission of rate cuts soon.
There is no need to revise the February 12 circular on bad loans as of now, RBI Governor says.
M Saraswathy: On what should be the ideal real interest rate, Deputy Governor Viral Acharya says he has never been a fan of pinning down a number. To this, Governor Das chipped in that interest rate of banks depends on their risk perception
MPC pegs April-September inflation forecast at 3.2-3.4%; cuts Q4 FY19 estimate to 2.8%
The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) on February 7 pegged H1 FY20 (April-September) inflation at 3.2-3.4 percent, assuming a normal monsoon. It also pegged inflation at 3.9 percent in Q3 FY20. For this fiscal, it revised downwards its inflationary estimates to 2.8 percent in Q4.
RBI Monetary Policy: A quick read of the policy document
The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) on February 7 voted to cut the repo rate by 25 basis points and changed its stance from ‘calibrated tightening’ to neutral.
Following are the key takeaways from the monetary policy: Repo rate cut by 25 basis points and stance of policy changed from calibrated tightening to neutral.
RBI Monetary Policy: A quick read of the policy document
The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) on February 7 voted to cut the repo rate by 25 basis points and changed its stance from ‘calibrated tightening’ to neutral.
Following are the key takeaways from the monetary policy: Repo rate cut by 25 basis points and stance of policy changed from calibrated tightening to neutral.
M Saraswathy: On growth, Das says RBI is monitoring external situations closely. "There are both upside and downside risks to growth." He added that monsoon, Brexit and crude oil prices are risk factors.
M Saraswathy: Das says there is no room for fly-by-night operators after relaxations in the Insolvency & Bankruptcy Code
The lending rates decided by banks are based on their risk perceptions of the borrowers, says Das.
RBI Governor Shaktikanta Das says that RBI is monitoring the external situation closely as there are several upside and downside risks to growth projection. He lists crude oil prices, trade wars, Brexit as some of the key risks to domestic growth.