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India central bank's operations to keep overnight rates within policy corridor, analysts say

Economic Times

Economic Times · 10h ago

India central bank's operations to keep overnight rates within policy corridor, analysts say

The Reserve Bank of India is managing liquidity withdrawal to maintain overnight interbank lending rates within the policy corridor, according to analysts. Recently, it withdrew ₹1 lakh crore ($11.7 billion) through a reverse repo operation. The RBI's policy repo rate stands at 5.50%, while the standing deposit facility rate is 5.25%. Analysts believe that the central bank aims to keep overnight rates closer to the SDF rather than pushing them towards the repo rate, allowing for effective policy transmission.

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RBI may soon step in to absorb excess liquidity

Economic Times

Economic Times · 18d ago

RBI may soon step in to absorb excess liquidity

The Reserve Bank of India (RBI) is planning to initiate variable rate reverse repo (VRRR) operations to manage surplus liquidity in banks, following its shift to a neutral policy stance. This move aims to stabilize short-term rates within the liquidity adjustment facility corridor. Economists believe restarting VRRR operations would help maintain market integrity. While no final decision is made, these operations could temporarily underscore the RBI's neutral stance until satisfactory rate transmission and a nearing end of the rate cut cycle.

RBI holds rates as expected, shifts stance to 'neutral'

VCCircle

VCCircle · 8m ago

RBI holds rates as expected, shifts stance to 'neutral'

- RBI keeps key interest rate unchanged at 6.50% for the tenth consecutive policy meeting - The policy stance is changed from "withdrawal of accommodation" to "neutral" - Five out of six members of the Monetary Policy Committee vote in favor of holding rates - Annual retail inflation remains below the central bank's target of 4%, standing at 3.65% in August - Manufacturing and services PMI indicators show a slowdown in economic growth - Overall growth in India slows to 6.7% in the June quarter

RBI holds interest rates steady yet again to keep inflation in check

VCCircle

VCCircle · 7m ago

RBI holds interest rates steady yet again to keep inflation in check

The Reserve Bank of India (RBI) has decided to keep its key interest rate unchanged at 6.50%. This decision was based on concerns over high inflation and disappointing economic growth. India's annual retail inflation rose to 6.21% in October, surpassing the central bank's tolerance band. Additionally, the country's GDP growth for the July-September quarter was the slowest in seven quarters at 5.4%. Investors will now be monitoring the RBI for any steps taken to address the liquidity deficit in the banking system, which could potentially lower market interest rates.

Fed holds rates steady, sees just one cut in 2024 despite inflation progress

Livemint

Livemint · 1y ago

Fed holds rates steady, sees just one cut in 2024 despite inflation progress

The US Federal Reserve has decided to keep interest rates steady and delayed rate cuts until later in the year. Previously, the Fed had projected three quarter-percentage-point reductions, but this has now been reduced to a single reduction. The decision comes as the Fed acknowledges progress towards its inflation target, but also raises estimates for the necessary actions to control inflation. The central bank's new projections show a higher long-run interest rate, indicating a need for more restraint to combat rising prices.

Most Gulf central banks follow US Fed in cutting key interest rates

VCCircle

VCCircle · 6m ago

Most Gulf central banks follow US Fed in cutting key interest rates

Following the US Federal Reserve's decision to cut interest rates, most central banks in the Gulf Cooperation Council (GCC) countries have also lowered their key interest rates. Saudi Arabia, the largest economy in the region, reduced its repo and reverse repo rates by 25 basis points. The United Arab Emirates decreased its base rate on the overnight deposit facility by a quarter of a percentage point. Other countries, such as Oman, Qatar, and Bahrain, also implemented rate cuts. These moves align with the GCC's practice of pegging their currencies to the US dollar.

India's appeal for investors dimmed but not derailed by conflict with Pakistan

VCCircle

VCCircle · 1m ago

India's appeal for investors dimmed but not derailed by conflict with Pakistan

India's investor appeal faces minor setbacks due to tensions with Pakistan, yet remains resilient with limited trade ties and unaffected markets. Historical conflicts rarely have long-term impacts on Indian assets. Despite geopolitical tensions, local investment flows offer market support. India's robust economic growth, recent trade deals, and central bank's policies bolster its global investment appeal. Analysts suggest that immediate jitters won't dent India's medium-term economic attractiveness. Investment centers in central and southern India are unaffected by border tensions.

Paytm confirms resignation of independent director at banking arm

Economic Times

Economic Times · 1y ago

Paytm confirms resignation of independent director at banking arm

Manju Agarwal has resigned as an independent director from the board of Paytm Payments Bank due to personal commitments. Paytm recently announced the formation of an advisory committee on compliance and regulatory matters following the central bank's order to wind down most of the bank's operations.

RBI holds rates again as inflation fight continues; retains GDP forecast

VCCircle

VCCircle · 11m ago

RBI holds rates again as inflation fight continues; retains GDP forecast

The Reserve Bank of India (RBI) has chosen to keep its key interest rate unchanged, as it maintains its focus on reducing inflation towards its 4% target. The Monetary Policy Committee has decided to retain the repo rate at 6.50%. This is the ninth consecutive policy meeting where the rate remains unchanged. Four out of six committee members voted in favour of the decision. The RBI Governor, Shaktikanta Das, stated that it is important to maintain the current monetary policy to bring inflation down and ensure sustainable economic growth. The MPC last changed rates in February 2019.

Nasscom to launch US CEO Forum in NY to boost India-US tech, innovation ties - The Economic Times

Economic Times

Economic Times · 8h ago

Nasscom to launch US CEO Forum in NY to boost India-US tech, innovation ties - The Economic Times

Nasscom is launching the US CEO Forum in New York to enhance India-US tech collaboration. The Forum will involve Indian tech CEOs and US stakeholders in strategic discussions on innovation, enterprise, policy, and talent development. With ongoing engagements planned across US tech hubs, it aims to foster growth, co-innovation, and policy alignment. Positioned as a leadership platform, the Forum seeks to strengthen the India-US tech corridor, promoting digital transformation and economic growth.

Wall Street Is Perplexed by Fed’s Motivation to Tweak Key Tool

Livemint

Livemint · 6m ago

Wall Street Is Perplexed by Fed’s Motivation to Tweak Key Tool

The Federal Reserve is expected to lower the rate on its overnight reverse repo facility (RRP) by 5 basis points, according to analysts. This move comes after policymakers suggested a "technical adjustment" to align the RRP rate with the bottom of the target range for the federal funds rate. While some see this as a purely technical adjustment, others question the timing and necessity of the move, considering the significant amount of cash parked at the RRP. The RRP rate reduction could impact money market rates and the funds held at the facility.

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