Equities trim gains on global cu…

Mumbai:  After two consec…

Complaint against Microsoft in U…

New York:  Three persons …

Russian news service applies for…

Washington:  The Russian …

Borders will be sealed: Rajnath …

Gwalior:  Union Home Mini…

'Rajinikanth's visit to Sri Lank…

  Chennai:  The L…

'Indian highways completion is h…

New Delhi: Despite exte…

CBI charges five more in Jindal …

  New Delhi: The Central…

Warm Friday morning in Delhi

  New Delhi: It was a wa…

Hurdles notwithstanding, Akshaya…

Book: Gods Own Kitchen;…

«
»
TwitterFacebookPinterestGoogle+

India’s central bank keeps key lending rates unchanged

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Mumbai:  The Reserve Bank of India (RBI) on Wednesday kept the key lending rates at 6.25 per cent during the last monetary policy review of the calendar year 2016.

With this, the repurchase rate, or the short-term lending rate charged by the central bank on borrowings by commercial banks, remains unchanged to 6.25 per cent. The reverse repurchase rate also automatically stands lowered to 5.75 per cent.

Quote on RBI review

Mr. Amit Modi, Director, ABA Corp and Vice President CREDAI Western UP.

“It is an expected move taken by the RBI Governor to keep repo rates unchanged as the Reserve Bank of India had, reduced the repo rate by 0.25% to 6.25%. in October tosignal lower interest rates in the economy. Hence RBI have done their part, the banks on the other hand have not been generous enough to pass on the entire benefit of this reduction to end consumers. Since now the banks are flushed with cash and don’t have to worry about reviving their bottom lines, they should now be passing the benefits of the previous rate cuts to the end consumers. It will be indeed the single biggest factor in kick starting the economic activity in this stagnant faces. Hence we sincerely hope that both Finance Ministry as well as the RBI push all the banks to transfer the entire benefit to the end consumer for whose benefit it is meant, else these moves will severely stop short of benefiting the consumer.”

Comments of Shri Melwyn Rego MD & CEO, Bank of India on RBI Monetary Policy

melwyn-rego1

The decision to keep policy rates unchanged took the markets by surprise as a 25 bps cut was the consensus view. Risk to inflation trajectory was the major reason for a pause since base effect for CPI would be unfavourable from December onwards. The tone of the policy is a bit hawkish. RBI decision to withdraw CRR on incremental deposits is a welcome move. MSS bonds worth Rs.6 Lakh Crore would ensure orderly liquidity management and is in line with liquidity neutral stance. Bond market, obviously, reacted negatively post policy with the benchmark 10 year paper rising 15-20 bps. However, inadequate deployment avenues would lead to range bound movement in yields. Overall, the policy had a cautious tone highlighting inflation risks due to unfavorable base effect and rise in crude and commodity prices.

statement from Mr V S Parthasarathy, Group CFO – Mahindra & Mahindra on today’s RBI policy review

mr-parthasarathy
“The ‘modified version of the Policy has been delivered again by Dr Urjit Patel and the Monetary Policy Committee (MPC), in the background of an important turn of events both globally and domestically. Domestically, the demonetisation funnelled enough & more liquidity in the system and inflation has been undershooting the RBI trajectory. In view of the above positives and concern on the fragility of business growth, a rate cut would have been the icing on the cake and a boost for growth.

However, the RBI is probably awaiting the transmission of earlier cuts and has therefore, deferred the rate action. Now that the liquidity is good and the cost of the liability side of banks is going down, hopefully the banks will now act. This will enable the RBI to deliver another growth boosting cut soon when they see abatement of “heightened uncertainties”.

In sum, the policy is still positive in its stance of accommodation.”

 

1 comment

  1. haritha Reply

    To Know entire Latest Today Breaking AP online News, India, Telangana, Hyderabad, Amaravathi current News, Andhra Pradesh Politics headlines, AP Online Telugu Updates, Tollywood, Cinema News, Sports news etc at onlineap.com

Leave a Reply

Your email address will not be published. Required fields are marked *

CAPTCHA Image

*

Sections

Shows

Other News

About Us

Follow Us