Latest news with #SenGupta
The Print
12 hours ago
- Business
- The Print
RBI announces 7-day reverse repo rate auction as liquidity enters surplus stage
India's banking system liquidity surplus stood at 2.44 trillion rupees as of June 23, as per RBI data. The Reserve Bank of India (RBI) added that after reviewing evolving liquidity conditions, it will not conduct the 14-day main operation scheduled for Friday, for the ensuing fortnight, according to a press release. Mumbai: India's central bank said on Tuesday it will conduct a seven-day variable rate reverse repo auction worth one trillion rupees ($11.62 billion) on June 27, following a review of liquidity conditions in the banking system. The central bank in June announced a surprise 100-basis-point reduction in the cash reserve ratio, the portion of deposits banks must park with the RBI, in four equal tranches beginning September, lowering it to 3%, to boost policy transmission. Amid surplus liquidity conditions, the weighted average overnight call rate has remained well below the RBI's key repo rate and near the policy corridor's floor, the Standing Deposit Facility rate, for the past few weeks. A persistent gap between the RBI's operative rate and the policy rate typically signals that banks are accessing cheaper funding than what the central bank is comfortable with, as per traders. Earlier this month, Reuters had reported that the RBI could start conducting variable rate reverse repo auctions to suck out surplus liquidity as and when required. 'The move (VRRR announcement) indicates that the RBI wants the operative rate closer to the repo rate,' said Gaura Sen Gupta, India economist at IDFC FIRST Bank. The move comes sooner than expected with the transmission via various channels – credit, deposit and bond market – in its early stages, Sen Gupta said, adding that the move may lead to a further rise in short-term yields. ($1 = 86.0580 Indian rupees) (Reporting by Siddhi Nayak; Editing by Vijay Kishore) This report is auto-generated from Reuters news service. ThePrint holds no responsibility for its content. Also Read: Jana Small Finance Bank Applies to RBI for Universal Banking License
Reuters
2 days ago
- Business
- Reuters
India cenbank announces reverse repo to arrest fall in overnight rates
MUMBAI, June 24 (Reuters) - India's central bank said on Tuesday it will conduct a seven-day variable rate reverse repo auction worth one trillion rupees ($11.62 billion) on June 27, following a review of liquidity conditions in the banking system. The Reserve Bank of India (RBI) added that after reviewing evolving liquidity conditions, it will not conduct the 14-day main operation scheduled for Friday, for the ensuing fortnight, according to a press release. India's banking system liquidity surplus stood at 2.44 trillion rupees as of June 23, as per RBI data. The central bank in June announced a surprise 100-basis-point reduction in the cash reserve ratio, the portion of deposits banks must park with the RBI, in four equal tranches beginning September, lowering it to 3%, to boost policy transmission. Amid surplus liquidity conditions, the weighted average overnight call rate has remained well below the RBI's key repo rate and near the policy corridor's floor, the Standing Deposit Facility rate, for the past few weeks. A persistent gap between the RBI's operative rate and the policy rate typically signals that banks are accessing cheaper funding than what the central bank is comfortable with, as per traders. Earlier this month, Reuters had reported that the RBI could start conducting variable rate reverse repo auctions to suck out surplus liquidity as and when required. "The move (VRRR announcement) indicates that the RBI wants the operative rate closer to the repo rate," said Gaura Sen Gupta, India economist at IDFC FIRST Bank. The move comes sooner than expected with the transmission via various channels - credit, deposit and bond market - in its early stages, Sen Gupta said, adding that the move may lead to a further rise in short-term yields. ($1 = 86.0580 Indian rupees)
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Business Standard
29-05-2025
- Business
- Business Standard
RBI's net income rises 27.5% to ₹2.69 trillion in FY25 on forex gains
The Indian central bank's net income rose 27.5 per cent in the last financial year to Rs 2.69 trillion ($31.4 billion) as gains from foreign exchange transactions and interest earned on foreign securities surged, its annual report showed on Thursday. The Reserve Bank of India saw a gain of Rs 1.11 trillion from foreign exchange transactions in the year ending March 2025 versus Rs 83,616 crore in the previous year. Interest income from foreign securities rose to 970.07 billion rupees from Rs 65,328 crore a year earlier. The size of the RBI's balance sheet increased by 8.2 per cent to Rs 76.25 trillion. "In FY25, the surge in dollar selling was due to FY25 balance of payments turning negative," said Gaura Sen Gupta, chief economist at IDFC First Bank. "In FY26, we expect balance of payments to be a small positive. Hence the quantum of dollar selling is expected to be moderate." Last week, RBI's board approved the transfer of a record Rs 2.69 trillion as surplus to the government for the last fiscal year as it opted to raise its contingency risk buffer under a revised economic capital framework. In fiscal year 2019, the RBI adopted a new economic capital framework that required it to maintain a contingency risk buffer of 5.5 per cent-6.5 per cent of its balance sheet. Last week, the board changed the range of the contingency risk buffer to 6 per cent plus or minus 1.5 percentage points to provide adequate flexibility and to ensure smoothening of surplus transfer. IDFC Bank's Sen Gupta expects the RBI's dividend this fiscal year to remain similar to levels seen in the previous two years, as interest income will remain substantial and provisioning stable. For the last fiscal year, the RBI's total expenditure rose 7.76 per cent to Rs 69,714 crore, largely due to higher interest spends, and costs related to employees and printing of notes.
News18
29-05-2025
- Business
- News18
RBI's Net Income Jumps 27% To Rs 2.69 Lakh Crore In FY25 On Forex Gains
Last Updated: RBI reported a 27.5% rise in net income for FY25, reaching Rs 2.69 trillion, driven by a surge in gains from foreign exchange transactions RBI The Reserve Bank of India (RBI) reported a 27.5% rise in net income for FY25, reaching Rs 2.69 trillion ($31.4 billion), driven by a surge in gains from foreign exchange transactions and interest earned on foreign securities, according to its annual report released Thursday. Forex transaction gains jumped to Rs 1.11 trillion in FY25, up from Rs 83,616 crore in the previous fiscal. Interest income from foreign securities also surged, reaching Rs 97,007 crore, compared to Rs 65,328 crore in FY24. The RBI's total balance sheet expanded 8.2% year-on-year to Rs 76.25 trillion.'The surge in dollar selling during FY25 was a result of a negative balance of payments," said Gaura Sen Gupta, Chief Economist at IDFC First Bank. 'In FY26, we expect the balance of payments to turn slightly positive, which should moderate the pace of dollar selling." Last week, the RBI board approved a record surplus transfer of Rs 2.69 trillion to the government for FY25. This came alongside an upward revision to the central bank's contingency risk buffer under its economic capital framework. The RBI had adopted a new capital framework in FY19, requiring a contingency risk buffer of 5.5%–6.5% of its balance sheet. In a recent update, the board revised the buffer range to 6% ±1.5 percentage points, allowing greater flexibility and smoother surplus transfers going forward. Sen Gupta added that the central bank's dividend to the government in FY26 is expected to remain broadly in line with recent years, supported by robust interest income and stable provisioning. Meanwhile, the dividend transfer by the RBI is expected to ease pressure on the exchequer as the Centre continues its aggressive capital expenditure and sustains tax relief measures announced in the Budget for FY26. Moreover, it could help the Centre shrink the fiscal gap. Plus, spending from the government would pump liquidity into the banking system, and the liquidity would be visible from early July, economists said. The RBI's total expenditure for FY25 rose 7.76% to Rs 69,714 crore. This increase was mainly attributed to higher interest payments, employee-related costs, and expenses related to printing currency. First Published: May 29, 2025, 13:03 IST
Zawya
28-02-2025
- Business
- Zawya
India's Oct-Dec GDP growth seen stronger on improved rural demand, government spending
NEW DELHI: India's economic growth is expected to have picked-up in the October to December quarter as rural consumption improved following a good monsoon and government spending gathered pace. Asia's third-largest economy saw a sharp slowdown in the July to September quarter, with GDP growth slipping to 5.4%, the slowest pace in seven quarters. Economists blamed the slowdown on weak urban demand and a delay in government spending due to national elections last year. In the three months to December, gross domestic product likely expanded by 6.3% from a year earlier, according to a Reuters' poll. But that would still be lower than the central bank's estimate of 6.8%. Economic activity, as measured by gross value added (GVA) which is seen as a more stable measure of growth, is estimated to have expanded 6.2% year-on-year in October-December as compared to 5.6% growth in the previous quarter. "The improvement is led by a revival in rural demand and a rise in central government capital expenditure," said Gaura Sen Gupta, chief economist at IDFC First Bank Economic Research. "Urban demand is also showing some signs of improvement, but the recovery remains relatively softer than rural demand," Sen Gupta said. The National Statistics Office is due to release GDP figures for October-December on Friday at 1030 GMT. Prime Minister Narendra Modi's government announced personal income tax relief for consumers in the budget announced in February. The central bank, under newly appointed governor Sanjay Malhotra, has cut interest rates, eased liquidity and delayed tighter financial sector rules as a way to boost growth. Still, growth is seen remaining sluggish at between 6.3-6.8% in the financial year beginning in April, sharply lower than the 8.2% seen in 2023-24. "We think the worst is over as far as India's growth trajectory is concerned but, even with the improvement of momentum, overall GDP growth is likely to remain below the potential growth rate of 7% in 2025-26," Deutsche Bank said in a recent note, which forecast growth for the next financial year at 6.5%. India will continue to retain its tag of the fastest growing major economy, but faces uncertainties over its trade with U.S. and the Donald Trump administration's plans to impose reciprocal tariffs. "The near-term impact of tariffs on growth might be small, with asymmetric sectoral implications," Radhika Rao, an economist at DBS Bank wrote in a February 25 note. In the latest quarter, weak urban demand is expected to have weighed on both the manufacturing and services sectors. "Services sector growth is expected to moderate in the December quarter led by softer growth in trade, hotels and transportation and real estate and financial services," Sen Gupta said in a note last week. Stronger output in the agriculture sector, however, is expected to provide a boost to growth. Government expenditure is also seen rising by the double digits during the December quarter after modest 4.4% growth in the previous three months, with capital spending by federal and state governments quickening. The government will also release revised growth estimates for the financial year ending March 31. A Reuters poll forecast the Indian economy grew at 6.5% in 2024/25, a little higher than the previous official estimate of 6.4%, but the slowest pace in four years.
