Skip to main content

RBI to hold rates at 6.50% through mid-2024, cut seen in Q3: Poll

By

 The Reserve Bank of India (RBI) will keep its key interest rate unchanged at 6.50% for a fifth consecutive meeting on Dec. 8 as inflation worries ebb, according to a Reuters poll of economists who unanimously expect the central bank's next move to be a cut. Despite inflation falling to a four-month low of 4.87% in October, it is expected to remain above the RBI's 4% medium-term target for at least another two years. That is likely to keep the RBI from changing its hawkish bias anytime soon. All 64 economists in the Nov. 17-30 Reuters poll expected the central bank to hold the repo rate at 6.50% at the conclusion of its Dec. 6-8 meeting. "We expect the Reserve Bank to stay put. We're not expecting a rate cut before Q3 2024," said Dhiraj Nim, economist at ANZ research. "If they are beginning to see inflation aligning with the 4% target... for one or two meetings, it will be sufficient evidence for the RBI to start pivoting."

 

While the poll medians still showed the first rate cut coming in the third quarter of the calendar year, almost half of economists forecast it will come in the second or earlier. Slightly more than half of respondents, 29 of 56, see the repo rate on hold at 6.50% through the middle of 2024, while 22 expect a quarter percentage point cut to 6.25% by mid-year. The remaining five see a half point cut to 6.00% by end-June. More than three-quarters of a smaller sample of respondents, 33 of 43, said the repo rate would be at the poll median of 6.25% or lower by end-September. The remaining 10 said the repo rate would still be at the current 6.50%. Inflation was forecast to average 5.4% this fiscal year that ends in March and 4.8% in fiscal 2024-25, still relatively high in the 2-6% target range even as the central bank starts to cut rates, a separate Reuters survey showed. "I think the RBI's focus is to keep it at around 5%... They will be comfortable with it because of the volatile nature of food inflation and the kind of weather and climate risk that we are seeing," said Suman Chowdhury, chief economist at Acuite Ratings and Research.

 

-Business Standard 1st Dec, 2023.

Comments

Post a Comment

Popular posts from this blog

Credit card spending growth declines on RBI gaze, stress build-up

By
  Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the...
Post a Comment
Read more

SFBs should be vigilant, proactive to mitigate risks: RBI deputy guv

By
  The Reserve Bank of India’s Deputy Governor Swaminathan J on Friday instructed the directors of small finance banks (SFBs) to be vigilant and proactive in identifying emerging risks in the sector.Speaking at a conference for directors on the boards of SFBs, Swaminathan highlighted the role of governance in guiding SFBs towards sustainable growth with stability. He also emphasised the importance of sustainable business models.Additionally, he highlighted the need for strengthening cybersecurity to protect the entities against digital threats and urged for a stronger focus on financial inclusion, customer service, and grievance redressal to ensure a broader reach of banking services.Executive Directors S C Murmu, Rohit Jain, and R L K Rao, along with other senior officials representing the Supervision, Regulation, and Enforcement Departments of the RBI, also participated in the conference.   -  Business Standard  30 th  September, 2024
Post a Comment
Read more

Brigade Hotel Ventures files draft papers with Sebi for Rs 900 crore IPO

By
  Brigade Hotel Ventures Ltd, owner and developer of hotels in South India, has filed draft papers with capital markets regulator Sebi to raise Rs 900 crore through an initial public offering (IPO).The proposed IPO is entirely a fresh issue of equity shares with no Offer-for-Sale (OFS) component, according to the draft red herring prospectus (DRHP).Proceeds from the issue to the tune of Rs 481 crore will go towards payment of debt, Rs 412 crore will be allocated to the company and Rs 69 crore to its material subsidiary, SRP Prosperita Hotel Ventures Ltd.Additionally, Rs 107.52 crore will be used to purchase an undivided share of land from the Promoter, BEL, and the remaining funds will support acquisitions, other strategic initiatives, and general corporate purposes.The company may raise up to Rs 180 crore through a Pre-IPO Placement.   If the placement is undertaken, the issue size will be reduced.Brigade Hotel Ventures Ltd is a wholly-owned subsidiary of Brigade Enterprises ...
Post a Comment
Read more