Latest news with #LiquidityAdjustmentFacility
The Print
4 days ago
- Business
- The Print
RBI keeps repo rate steady at 5.5% amid US tariff concerns
This comes after the MPC had reduced the repo rate by 50 basis points to 5.5 per cent in the previous policy meeting held in June. The RBI Governor stated, 'After a detailed assessment of the evolving macroeconomic and financial developments and outlook, the MPC voted unanimously to keep the policy record under the Liquidity Adjustment Facility unchanged at 5.5 per cent. Mumbai: In a unanimous decision the Reserve Bank of India (RBI) Monetary Policy Committee (MPC) has kept the repo rate unchanged at 5.5 per cent in its August policy meeting. The decision was announced by RBI Governor Sanjay Malhotra on Wednesday. The Monetary Policy Committee (MPC), which met on the 4th, 5th, and 6th of August, carefully reviewed the latest economic and financial conditions before taking this decision. The Governor said that all six members of the MPC voted unanimously to maintain the repo rate under the Liquidity Adjustment Facility at 5.5 per cent. The reason for the earlier rate cut was the easing of inflation. Earlier he stated that both near-term and medium-term inflation levels are now within the RBI's comfort zone. He also highlighted that food inflation has remained soft, which gives the central bank more flexibility in its decisions. Retail inflation in India has continued to fall and has now reached its lowest level in more than six years. According to the Ministry of Statistics, the year-on-year inflation rate based on the Consumer Price Index (CPI) for June was 2.10 per cent (provisional), a drop of 72 basis points compared to May 2025. This is the lowest CPI inflation rate since January 2019. Food prices have also dropped. The Consumer Food Price Index (CFPI) for June showed a year-on-year inflation rate of (-) 1.06 per cent (Provisional). In rural areas, the food inflation rate was (-) 0.92 per cent, while in urban areas, it was (-) 1.22 per cent. Wholesale inflation has also turned negative. The Wholesale Price Index (WPI) for June stood at (-) 0.13 per cent, compared to 0.39 per cent in May. The Ministry of Commerce and Industry said the negative WPI was due to lower prices of food items, mineral oils, basic metals, crude petroleum, and natural gas. Governor Malhotra added that the economic outlook looks positive. 'The monsoon season is progressing well, and the upcoming festival season usually increases economic activity. Combined with supportive government and RBI policies, this situation bodes well for the Indian economy in the near term,' he said. (ANI) This report is auto-generated from ANI news service. ThePrint holds no responsibility for its content. Also read: India's response to Trump is an emotional one. Tariff damage is psychological
India Today
5 days ago
- Business
- India Today
RBI keeps key lending rate steady at 5.5% amid global trade uncertainty
The Reserve Bank of India (RBI) on Wednesday decided to keep the key repo rate unchanged at 5.5%, as the Monetary Policy Committee (MPC) concluded its three-day meeting led by Governor Sanjay Malhotra."The Monetary Policy Committee, MPC, met on the 4th, 5th and 6th of August to deliberate and decide on the policy repo rate. After a detailed assessment of the evolving macroeconomic and financial developments and the outlook, the MPC voted unanimously to keep the policy repo rate under the Liquidity Adjustment Facility unchanged at 5.5%," said RBI Governor Sanjay further said that the Standing Deposit Facility rate will remain at 5.25%, and the Marginal Standing Facility rate and the Bank Rate will continue at 5.75%. "The MPC also decided to continue with a neutral stance," he CONCERNS STILL LINGERGovernor Malhotra explained the reason behind keeping rates unchanged, pointing to the movement in inflation numbers over recent months."The MPC noted that while headline inflation is much lower than projected earlier, it is mainly due to volatile food prices, especially in vegetables. Core inflation, on the other hand, has remained steady around the 4% mark as anticipated. Inflation is projected to go up from the last quarter of this financial year," he RBI has been closely watching inflation trends, particularly food prices, which have been unpredictable in recent months. While the central bank is relieved by the overall cooling in inflation, there are still concerns that it might rise again toward the end of the STABLE, BUT RISKS REMAINOn the economic growth front, the Governor said that India's growth remains strong but not quite at the level the central bank had earlier hoped for."Growth is robust and as our earlier projections go, of course, below our expectations. The uncertainties of tariffs are still evolving. Monetary policy transmission is continuing," said explained that the full impact of the 100 basis points cut in the repo rate since February is still being felt. 'The impact of the 100 basis points rate cut since February 2025 on the broader economy is still unfolding,' he FOR EARLIER RATE CUTS TO WORKGiven that the RBI has already cut rates by 100 basis points over three policy meetings this year, Malhotra said the central bank will now wait to see how those changes impact borrowing costs and economic activity.'On balance, therefore, the current macroeconomic conditions, outlook and the uncertainties call for continuation of the policy repo rate of 5.5% and wait for further transmission of the front-loaded rate cut to the credit markets and to the broader economy. Accordingly, the MPC unanimously voted to keep the repo rate unchanged,' the Governor STANCE TO CONTINUELooking ahead, the RBI said it would closely track incoming data before making any further changes to its policy approach.'The MPC further resolved to maintain a close vigil on the incoming data and the evolving domestic growth-inflation dynamics to chart out the appropriate monetary policy path. Accordingly, all members decided to continue with a neutral stance," Malhotra Bhardwaj, Chief Economist, Kotak Mahindra Bank said that the MPC's decision to keep rates unchanged comes in the wake of global uncertainties, even as inflation remains benign and downside risks to growth persists."With inflation likely to trend higher post the near term favourable trends, the bar for rate cuts ahead is set very high. We can see some room for the last leg of easing only if growth momentum slows significantly," she added.- Ends advertisement
Time of India
5 days ago
- Business
- Time of India
RBI's monetary policy committee decides to pause, lowers inflation forecast
Mumbai: The Monetary Policy Committee (MPC) at its 55th meeting kept the policy repo rate unchanged at 5.5% and retained its neutral stance even as it retained growth forecast for FY26 at 6.5% and lowered inflation projection to 3.1% from 3.7% earlier. RBI governor Sanjay Malhotra said, 'The MPC voted unanimously to keep the policy repo rate under the Liquidity Adjustment Facility unchanged at 5.5%… [and] to continue with the neutral stance.' Malhotra said the decision was based on 'the current macroeconomic conditions, outlook and the uncertainties' which called for 'wait[ing] for further transmission of the front loaded rate cut to the credit markets and to the broader economy.' Following the decision, the standing deposit facility rate remains at 5.25% and the marginal standing facility rate and the bank rate at 5.75%. The RBI noted that the decision came against a backdrop of 'favourable… monsoon season,' resilient domestic growth, and some easing in geopolitical uncertainties, although 'global trade challenges continue to linger' and 'policymakers will have a tough task navigating… modest growth, sticky inflation and elevated public debt levels.' On inflation, Malhotra said the outlook for FY26 was 'more benign than expected in June,' with the forecast now at 3.1% compared with the earlier 3.7%, aided by 'large favourable base effects… healthy Kharif sowing… and comfortable buffer stocks.' The revised quarterly CPI projections are Q2 at 2.1%, Q3 at 3.1% and Q4 at 4.4%, with Q1 FY27 seen at 4.9%. The forecast for real GDP growth in FY26 has been retained at 6.5%, with quarterly projections unchanged at Q1 at 6.5%, Q2 at 6.7%, Q3 at 6.6% and Q4 at 6.3%. Malhotra said growth was 'holding up and… broadly evolving along the lines of our assessment' supported by government capex, steady monsoon, and services sector resilience. On monetary transmission, he noted that the 'impact of the 100 basis points rate cut since February 2025… is still unfolding,' with the weighted average lending rate on fresh rupee loans down 71 bps and deposit rates on fresh deposits down 87 bps. 'Transmission to lending rates has been broad based across all sectors,' he added. Commenting on the external sector, Malhotra said the current account deficit had moderated to 0.6% of GDP… from 0.7%, supported by 'robust services exports and strong remittances receipts' despite a higher merchandise trade deficit. Foreign exchange reserves stood at $688.9 billion, sufficient to cover more than 11 months of our merchandise imports. On liquidity, he said system liquidity had been 'in surplus… about 3 lakh crore rupees per day' and would be further supported as the CRR cut comes into effect. The RBI would 'continue to be nimble and flexible in its liquidity management' to ensure smooth transmission. Concluding, Malhotra said the RBI was leveraging 'the room provided by a significant moderation in inflation' to take 'decisive and forward-looking measures to support growth,' while remaining vigilant on growth and inflation dynamics to 'chart out the appropriate monetary policy path.' Stay informed with the latest business news, updates on bank holidays and public holidays .
India Gazette
11-06-2025
- Business
- India Gazette
RBI's policy rate cut to boost growth as inflation eases: BoB report
New Delhi [India] June 11 (ANI): The decision of the Reserve Bank of India (RBI) to slash the policy rate will boost growth amidst easing price pressures and infuse liquidity along with supporting credit flow, said a report by Bank of Baroda. The BoB report added that the RBI's surprise 50 basis-point rate cut, along with a phased 100 basis-point reduction in the Cash Reserve Ratio (CRR), has signalled a strong pro-growth stance. The announcements have been welcomed by markets and are expected to spur economic activity in the coming quarters. The Monetary Policy Committee (MPC) maintained its GDP growth forecast for FY26 at 6.5 per cent. The RBI revised the inflation projection downward to 3.7 per cent, highlighting its confidence in the current macroeconomic environment. On June 6, RBI's Monetary Policy Committee (MPC) reduced the policy repo rate under the Liquidity Adjustment Facility by 50 basis points to 5.5 per cent. Consequently, the Standing Deposit Facility Rate, which is the SDF Rate, shall stand adjusted to 5.25 per cent, and the Marginal Standing Facility MSF Rate and the Bank Rate shall stand adjusted to 5.75 per cent. 'These measures are expected to boost growth amidst easing price pressures and infuse liquidity along with supporting credit flow,' the report added. 'In the coming week, focus would shift towards the US Fed, wherein a pause is expected, especially since the labour market has been signalling some strength,' the report added. India's monetary move comes against a backdrop of renewed optimism in the global economy, as the United States and China begin working towards concluding new trade terms. The report added that global central banks have adopted a watchful stance, closely monitoring the inflation risks with growth. 'Global central banks closely monitored the evolving dynamics between growth and inflation,' the report added. The European Central Bank (ECB) recently cut rates by 25 basis points. As per the report, the attention now turns to the US Federal Reserve, which is widely expected to pause its rate changes given recent labour market resilience. 'In the coming week, focus would shift towards the US Fed, wherein a pause is expected, especially since the labour market has been signalling some strength,' the report added. (ANI)
Economic Times
11-06-2025
- Business
- Economic Times
RBI's policy rate cut to boost growth as inflation eases: BoB report
Reserve Bank of India will cut the policy rate. This move aims to boost economic growth. Price pressures are expected to ease. Liquidity will increase and credit flow will be supported. The Monetary Policy Committee maintained India's GDP growth forecast. The focus now shifts to the US Federal Reserve. A pause in rate changes is expected from the US Fed. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The decision of the Reserve Bank of India (RBI) to slash the policy rate will boost growth amidst easing price pressures and infuse liquidity along with supporting credit flow, said a report by Bank of Baroda The BoB report added that the RBI's surprise 50 basis-point rate cut, along with a phased 100 basis-point reduction in the Cash Reserve Ratio (CRR), has signalled a strong pro-growth announcements have been welcomed by markets and are expected to spur economic activity in the coming Monetary Policy Committee (MPC) maintained its GDP growth forecast for FY26 at 6.5 per cent. The RBI revised the inflation projection downward to 3.7 per cent, highlighting its confidence in the current macroeconomic June 6, RBI's Monetary Policy Committee (MPC) reduced the policy repo rate under the Liquidity Adjustment Facility by 50 basis points to 5.5 per the Standing Deposit Facility Rate, which is the SDF Rate, shall stand adjusted to 5.25 per cent, and the Marginal Standing Facility MSF Rate and the Bank Rate shall stand adjusted to 5.75 per cent."These measures are expected to boost growth amidst easing price pressures and infuse liquidity along with supporting credit flow," the report added."In the coming week, focus would shift towards the US Fed, wherein a pause is expected, especially since the labour market has been signalling some strength," the report monetary move comes against a backdrop of renewed optimism in the global economy, as the United States and China begin working towards concluding new trade report added that global central banks have adopted a watchful stance, closely monitoring the inflation risks with growth."Global central banks closely monitored the evolving dynamics between growth and inflation," the report European Central Bank (ECB) recently cut rates by 25 basis per the report, the attention now turns to the US Federal Reserve, which is widely expected to pause its rate changes given recent labour market resilience."In the coming week, focus would shift towards the US Fed, wherein a pause is expected, especially since the labour market has been signalling some strength," the report added.
