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Indian stock markets closed lower as Sensex and Nifty declined amid RBI’s rate cut announcement and profit booking. FIIs continued offloading equities, impacting investor sentiment.

Markets settle lower after RBI policy; continuous foreign fund outflows dent investors' sentiment

Indian stock markets closed lower as Sensex and Nifty declined amid RBI&rsquo;s rate cut announcement and profit booking. FIIs continued offloading equities, impacting investor sentiment.

Equity benchmark indices Sensex and Nifty ended lower on Friday (February 7, 2025) as the RBI&rsquo;s rate cut did not spring any major surprise for the markets and investors turned to profit-taking amid foreign fund outflows.
Registering its third day of decline, the 30-share BSE benchmark Sensex dropped 197.97 points or 0.25% to settle at 77,860.19, in a volatile trade. During the day, it lost 582.42 points or 0.74% to 77,475.74.
The NSE Nifty declined 43.40 points or 0.18% to 23,559.95.
ALSO READ: <a href="https://www.editorji.com/business-news/rbi-cuts-policy-rate-by-25-bps-to-6-25-pc-first-reduction-in-five-years-1738911995651" target="_blank">RBI cuts policy rate by 25 bps to 6.25 pc, first reduction in five years</a>
From the 30-share blue-chip pack, the stock of ITC dipped over 2% after the diversified entity reported a 7.27% decline in consolidated net profit to ₹5,013.16 crore for the December quarter on account of subdued demand and sharp escalation in input costs.
State Bank of India, Adani Ports, Tata Consultancy Services, ICICI Bank, Reliance Industries and PowerGrid were also among the laggards.
&ldquo;As the rate cut did not spring any major surprise, investors did not find anything interesting in the new RBI governor&rsquo;s comments which resulted in a steady bout of profit-taking in banking, oil &amp; gas, FMCG and power stocks. The ongoing earnings have been mixed to subdued while relentless selling of domestic shares by the FIIs have prompted investors to maintain caution,&rdquo; Prashanth Tapse, Senior VP (Research), Mehta Equities Limited, said.
Among the gainers, Tata Steel jumped over 4%.
Bharti Airtel's stock surged nearly 4% after the firm reported a more than five-fold jump in consolidated net profit to ₹16,134.6 crore boosted by consolidation of the Indus Tower business and benefits of tariff hikes flowing into the quarter.
Zomato, Mahindra &amp; Mahindra, UltraTech Cement and Tech Mahindra were also the other gainers.
Some stocks from interest rate sensitive realty and auto pack ended in the positive territory.
&ldquo;A rate cut aimed at reviving the slowing economy is a positive indicator. However, yields edged higher as investors were disappointed by the absence of anticipated liquidity measures, leading to profit-booking in the indices. Additionally, a downward revision in the near-term growth forecast, influenced by global trade policies and inflation concerns, suggests that the central bank will adopt a cautious and gradual approach to future rate adjustments.
&ldquo;While the broader market underperformed, the metals sector gained traction amid expectations of increase in demand,&rdquo; Vinod Nair, Head of Research, Geojit Financial Services, said.
Home, auto and other loans are likely to see a drop in interest rates after the Reserve Bank of India under a new governor cut the key benchmark rate on Friday (February 7, 2025) for the first time in almost five years to spur a sluggish economy.
The Monetary Policy Committee, headed by RBI Governor Sanjay Malhotra, slashed the repo rate by 25 basis points to 6.25%. This was the first reduction since May 2020 and the first revision after two-and-a-half years.
Mr. Malhotra, a career bureaucrat who replaced Shaktikanta Das barely days after the last bi-monthly MPC meeting in December, forecast the Indian economy to grow at 6.7% in the fiscal year starting April 2025 while inflation rate to lower to 4.2%.
ALSO READ: <a href="https://www.editorji.com/business-news/economy/rbi-projects-fy26-inflation-at-4-2-pc-down-from-4-8-pc-estimate-in-2024-25-1738912742906" target="_blank">RBI projects FY26 inflation at 4.2 pc, down from 4.8 pc estimate in 2024-25</a>
For the fiscal year ending March 31, RBI quoted the government estimate to put the growth rate at 6.4%, its worst in four years and lower than 6.6% seen previously, while the inflation was pegged at 4.8%.
Repo rate also decides the returns on savings and investment products. A higher repo rate can lead to better returns on fixed deposits and other savings instruments, as banks offer higher interest rates to attract deposits. On the flip side, lower repo rates might reduce the interest earned on these savings products.
ALSO READ: <a href="https://www.editorji.com/business-news/economy/rbi-raises-gdp-growth-forecast-to-6-7-for-2025-26-inflation-expected-to-ease-1738914707815" target="_blank">RBI raises GDP growth forecast to 6.7% for 2025-26, inflation expected to ease</a>
In Asian markets, Seoul and Tokyo settled lower while Shanghai and Hong Kong ended in the positive territory.
European markets were trading mostly lower. U.S. markets ended mostly higher on Thursday (February 6, 2025).
Global oil benchmark Brent crude climbed 0.73% to $74.83 a barrel.
Foreign Institutional Investors (FIIs) offloaded equities worth ₹3,549.95 crore on Thursday (February 6, 2025), according to exchange data.
On Thursday (February 6, 2025), the BSE bellwether gauge dropped 213.12 points or 0.27% to settle at 78,058.16. The Nifty declined 92.95 points or 0.39% to 23,603.35.
ALSO READ: <a href="https://www.editorji.com/business-news/rbi-launches-exclusive-bank-in-domain-to-curb-financial-frauds-enhances-digital-security-measures-1738915408506" target="_blank">RBI launches exclusive '.bank.in' domain to curb financial frauds, enhances digital security measures</a>

This is the eighth time in a row that the RBI monetary policy committee has maintained status quo on the interest rates keeping it unchanged at 6.5%

RBI Credit Policy: Repo rate unchanged at 6.5% for 8th time in a row

<h2>This is the eighth time in a row that the RBI monetary policy committee has maintained status quo on the interest rates keeping it unchanged at 6.5%</h2>

RBI Monetary Policy Meet June 2024: In its first credit policy meeting after the Lok Sabha election results were announced, the Reserve Bank of India Monetary Policy Committee has kept the repo rate unchanged at 6.5% for the eighth time in a row.
The MPC has also maintained the withdrawal of accommodation stance which means the RBI has decided to reduce the money supply in the system to rein in inflation.
<h3>Repo rate unchanged</h3>
The RBI had increased the repo rate in the last quarter of FY23 by 25 basis points under the liquidity adjustment facility. Since then the interest rate has been kept unchanged. The RBI has also maintained the SDF rate at 6.25% and MSF rate at 6.75%.
Meanwhile, SBI in its research analysis suggested that the RBI's initial rate reduction is anticipated in Q3FY25. It expects the ensuing rate cut cycle to be modest in scale, aimed at bolstering liquidity.
<h3>Economic Projections</h3>
GDP growth for 2024-25 has been projected at 7.2%. RBI projects Q1 at 7.3%, Q2 at 7.2%, Q3 at 7.3%, Q4 at 7.2% with risk even balanced. The CPI inflation for the same period is projected at 4.5%, assuming normal monsoon. RBI projects retail inflation in Q1 of FY25 at 4.9%, Q2 at 3.8%, Q3 at 4.6%, and Q4 at 4.5%.&nbsp;
RBI governor Shaktikantha Das also expressed concerns over elevated inflation while assuring that RBI remains committed for aligning inflation to 4% on a durable basis
For the final quarter of FY24, GDP has grown 7.8%. For the full year of FY24, GDP has been pegged at a strong 8.2% as compared to a growth rate of 7% in FY2022-23.
Also watch: <a href="https://www.editorji.com/business-news/rbi-credit-policy-1712291728874">RBI Credit Policy: Repo rate unchanged at 6.5% for 7th time in a row</a>
&nbsp;

The Reserve Bank of India (RBI) last hiked the repo rate to 6.5 per cent in February 2023 and since then it has held the rate at the same level in its last six bi-monthly policies

RBI Credit Policy: MPC likely to keep Repo rate unchanged for seventh time in a row

<h2>The Reserve Bank of India (RBI) last hiked the repo rate to 6.5 per cent in February 2023 and since then it has held the rate at the same level in its last six bi-monthly policies</h2>

The Reserve Bank of India Monetary Policy Committee is expected to remain status quo on the current rates during the credit policy which will be announced on friday. All 38 economists surveyed by Bloomberg anticipate that RBI will keep its benchmark repo rate at 6.5 percent for the seventh consecutive time. Despite some speculations about potential rate cuts in the future, most economists anticipate the bank to maintain a hawkish stance. However, any potential easing of rates has been complicated by concerns over inflation due to rising food prices and robust demand in an economy growing at nearly 8 percent. RBI Governor Shaktikanta Das has emphasized that any easing measures would only be considered once inflation stabilizes around the 4 percent target on a sustainable basis, diminishing the likelihood of an immediate rate cut. RBI's rate-setting panel starts discussion on monetary policy; decision on Friday
The Reserve Bank of India (RBI) last hiked the repo rate to 6.5 per cent in February 2023 and since then it has held the rate at the same level in its last six bi-monthly policies.
Experts said the Monetary Policy Committee (MPC) may take cues from the central banks of some major economies, such as the US and the UK, which are apparently in wait-and-watch mode on interest rate cuts.
Switzerland has become the first major economy to cut interest rates, while Japan, the world's third-largest economy, ended its eight-year period of negative interest rates regime.

RBI MPC Meeting October 2023: The RBI monetary policy committee has remained status quo on the interest rates for 4th time in a row. Check out more details on repo rates here,

RBI Monetary Policy Meet October 2023: Repo rate left unchanged at 6.5%

This is the fourth time in a row that the RBI monetary policy committee has remained status quo on the interest rates. Since May 2022, the repo rate has been raised by a total of 250 basis points to bring inflation under control

RBI Monetary Policy 2023: Repo rate left unchanged at 6.5%

<h2>This is the fourth time in a row that the RBI monetary policy committee has remained status quo on the interest rates. Since May 2022, the repo rate has been raised by a total of 250 basis points to bring inflation under control</h2>

RBI MPC Meet October 2023: For the fourth time in a row, the Reserve Bank of India Monetary Policy Committee has kept the repo rate unchanged at 6.5% and the withdrawal of accommodation stance has been maintained.
<h3>Repo Rate remains Unchanged</h3>
The Standing Deposit Facility and Marginal Standing Facility rates also left unchanged at 6.25% and 6.75% respectively.
During the credit policy announcement, RBI governor Shaktikanta Das cautioned on the need to remain vigilent towards inflation as this might be a major risk to macroeconomic policy &amp; growth.
Also Read: <a href="https://www.editorji.com/business-news/gst-council-to-review-28-levy-on-online-gaming-horse-racing-and-casinos-at-upcoming-meeting-1696425755131">GST Council to review 28% levy on online gaming, horse racing, and casinos at upcoming meeting</a>
<h3>RBI Monetary Policy Meet October 2023: Economic Projections</h3>
Shaktikanta Das Announcement: The RBI Governor has mentioned that the monetary policy focus remains to align inflation at the 4% target. The CPI inflation forecast for FY24 is retained at 5.4%. RBI's GDP growth projection has been kept unchanged at 6.5% for 2023-24.&nbsp;
Since May 2022, the central bank has raised the repo rate by 250 basis points which the governor says is still working through the economy.&nbsp;

The minutes of the RBI MPC meeting reveal that inflation remains a top concern and priority until the 4% target is met. Check here for more details.

RBI MPC Meeting October 2023: RBI Monetary Policy Committee meeting minutes reveal a determination to reach the 4% inflation target

The minute of the MPC meet reveal that inflation remains a top concern and priority until the 4% target is met. The MPC, for the 4th time in a row kept the repo rate unchanged at 6.5% during the MPC meet between the 4th-6th of October. 




RBI Monetary Policy Committee meet minutes reveal determination to reach 4% inflation target

<h2>The minutes of the MPC meeting reveal that inflation remains a top concern and priority until the 4% target is met. The MPC, for the 4th time in a row kept the repo rate unchanged at 6.5% during the MPC meet between the 4th-6th of October.&nbsp;</h2>

RBI MPC Meeting October 2023: The minutes of the RBI Monetary Policy Committee (MPC) meeting reveal that inflation remains a top concern for the MPC members.&nbsp; Most of the members of the MPC reiterated that a close watch needs to be kept on inflation while voting to remain focussed on the withdrawal of accommodation. Prof. Jayanth Varma meanwhile, expressed some reservations on the withdrawal of accommodation stance.&nbsp;
The MPC meeting was held between the 4th - 6th of October during which it was unanimously decided by all the members, to keep the repo rate unchanged and 6.5%.&nbsp;
<h3>Minutes of RBI MPC Meet 2023</h3>
While expecting demand to sustain the growth momentum, Dr. Shashanka Bhide pointed out to the downside risks emerging from the uncertain global market. Dr Bhide also notes the fact that the transmission of the policy rate actions so far are still incomplete.&nbsp;
Dr Ashima Goyal points out, "Despite the large inflation spikes to vegetable and crude oil prices, there is favourable news on inflation". However, explaining her vote for the stance on withdrawal of accommodation, Dr Goyal says, its a signal towards the MPC's determination to reach its 4% target. While this stance rules out a rate cut, it allows a rise, "but that will not be required unless there are second round effects from the repeated supply shocks". "The guidance therefore is that future moves will be data dependent".&nbsp;
Prof Jayanth Varma differs with other MPC members on the matter of the stance, as he did in the previous meeting as well. Expressing his reservations he says, "Successive meetings that promise to withdraw accommodation while actually keeping rates unchanged do not enhance the credibility of the MPC. I would much prefer a stance in which words are consistent with the actions". He adds that right now the market needs to know how long the rate would be maintained at a high level. Dr Rajiv Ranjan also echoes the majority view that a disinflationary approach is required which allows for a readiness to act if needed. "This calls for continuation of withdrawal of accommodation stance for monetary policy so as to facilitate further transmission of the cumulative policy repo rate hike of 250 basis points on the economy", he adds.&nbsp;
RBI Governor Shaktikanta Das reiterates the fundamental goal to align inflation with the 4% inflation target, while pointing out the Monetary Policy has to be ready to act, if needed and that macroeconomic stability has to be preserved. The governor lists out various possible risks to inflation with the example of the inflationary pressures that followed the spike in vegetable prices in July-August. This "has once again shown that headline inflation remains vulnerable to recurring and overlapping food price shocks", he adds.&nbsp;

This is the third time in a row that the RBI monetary policy committee has remained status quo on the interest rates. Since May 2022, the repo rate has been raised by a total of 250 basis points to bring inflation under control

This is the third time in a row that the RBI monetary policy committee has remained status quo on the interest rates. Since May 2022, the repo rate has been raised by a total of 250 basis points to bring inflation under control

For the third time in a row, the Reserve Bank of India Monetary Policy Committee has kept the repo rate unchanged at 6.5% and the withdrawal of accomodation stance has been maintained. During the credit policy announcement, RBI governor Shaktikanta Das cautioned on the need to remain vigilent towards inflation. He also said the MPC is prepared to act, should the situation warrant.&nbsp; On the inflation front, the Governor announced that the CPI forecast for 2023-24 has been revised higher to 5.4% from 5.1% that was projected earlier. The governor pointed out that while core inflation has softened from its recent peaks, headline inflation is expected to surge in the short term due to the spike in prices of tomatoes, cereals and pulses.&nbsp; Meanwhile, Economists have also anticipated a significant surge in retail inflation for the month of July due to soaring food prices, estimating it to reach 6.7%. RBI's GDP growth projection has been kept unchanged at 6.5% for 2023-24.&nbsp;
Since May 2022, the central bank has raised the repo rate by 250 basis points.
&nbsp;
&nbsp;

The RBI started increasing the policy rate in May 2022 in tranches, in the wake of the Russia-Ukraine war and took it to 6.5 per cent in February this year

RBI MPC Meeting October 2023: Date, Time, How to Watch Live Press Conference, What to Expect

<h2>The RBI started increasing the policy rate in May 2022 in tranches, in the wake of the Russia-Ukraine war and took it to 6.5 per cent in February this year</h2>

Financial experts anticipate that the Reserve Bank of India (RBI) will maintain the benchmark interest rate at 6.5 percent in its latest bi-monthly monetary policy review. The RBI Governor, Shaktikanta Das, chairs the Monetary Policy Committee (MPC), which began its three-day meeting on Wednesday, with the policy review set to be announced on Friday morning.
Date, Time, How to Watch Live Press Conference The three-day meeting of the RBI's rate-setting panel started on Wednesday, October 4 and the policy review will unveil the MPC decision around 10 am on Friday (October 6). RBI MPC Meeting Live Streaming Link: The central bank will live stream the RBI Governor's policy statement on RBI's YouTube channel or on RBI's official &nbsp;X (formerly Twitter) handle. Also read/watch: <a title="GST on online gaming: Fantasy sports body urges government to avoid retroactive" href="https://www.editorji.com/business-news/gst-on-online-gaming-fantasy-sports-body-urges-government-to-avoid-retroactive-1696497807397">GST on online gaming: Fantasy sports body urges government to avoid retroactive</a> &nbsp;
What to Expect from the Meeting&nbsp;
According to D Joshi, Chief Economist at Crisil, inflation has risen since the last MPC meeting in August, while global factors, such as the assertive stance of the US Federal Reserve leading to higher yields, have turned somewhat adverse. In this context, the central bank is expected to keep policy rates unchanged. The RBI is likely to prioritize inflation, given the current robust economic growth and the need to closely monitor oil price fluctuations.
Joshi also indicated that interest rates are expected to remain on the higher side, suggesting that there may not be any rate cuts during this fiscal year.
The central government has tasked the Reserve Bank with maintaining Consumer Price Index (CPI)-based inflation at 4 percent, with a margin of 2 percent on either side. Retail inflation reached a 15-month high of 7.44 percent in July, driven by increased prices of vegetables and other food items, as per official data.
Siddhartha Sanyal, Chief Economist of Bandhan Bank, noted that the global macroeconomic situation remains complex, with uncertainties surrounding economic growth. This is likely to prompt the MPC to adopt a cautious approach, with a potential indication that rates will remain elevated for an extended period.
However, the moderation in the prices of agricultural commodities since August has provided the MPC with some leeway, allowing it to refrain from taking any immediate rate action, according to Aalesh Avlani, Founder and Director of CreditWise Capital. He also anticipates no changes in policy rates during the upcoming announcement.
The RBI had gradually increased the policy rate starting in May 2022, in response to the Russia-Ukraine conflict, eventually reaching 6.5 percent in February of the current year. In the last three bi-monthly monetary policy reviews, the RBI has maintained the rate unchanged.

RBI Monetary Policy 2023 result will be announced by the RBI Governor Shaktikanta Das on May 8, 2023 at 10 am. Know about the key expections, announcement date and time here.

RBI Monetary Policy 2023: Announcement Date, Time and Expectations

RBI monetary policy: key expectations 

<h2>RBI Monetary Policy 2023: After the last MPC meeting in April, the RBI paused its rate hike cycle and stayed with the 6.5 per cent repo rate. Know about the key expections here.</h2>

RBI Monetary Policy 2023: The Reserve Bank's rate-setting monetary policy panel began deliberations on Tuesday amid expectations that the central bank will keep the benchmark interest rates unchanged at 6.5 per cent on the back of easing retail inflation and the need to push economic growth.
Headed by Reserve Bank Governor Shaktikanta Das, the six-member Monetary Policy Committee (MPC) will meet for three days and the decision would be announced on Thursday, June 8 at 10:00 am. The live telecast of policy press conference will take place at 12 pm by RBI Governor Shaktikanta Das.
After the last MPC meeting in April, the RBI paused its rate hike cycle and stayed with the 6.5 per cent repo rate. Prior to that the central bank had cumulatively hiked the repo rate by 250 basis points since May 2022 in a bid to contain inflation.
The MPC is meeting in the backdrop of consumer price-based (CPI) inflation declining to an 18-month low of 4.7 per cent in April. The Reserve Bank governor recently indicated that the May print would be lower than the April numbers. The CPI for May is scheduled to be announced on June 12.
<h3>RBI Monetary Policy: Key Expectations</h3>
On expectations from the MPC, Rumki Majumdar, Economist, Deloitte India said: "We expect a pause in this meeting as growth concerns cannot be overlooked. With the global economy slowing down, there are risks that the slowdown contagion may impact us".
Globally, there are signs that the Central Banks may also take a pause or go with fewer hikes as runaway inflation takes a breather, Majumdar said, and added this will further help the RBI to maintain the status quo.
Dhruv Agarwala, Group CEO, Housing.com said the RBI is expected to keep its benchmark lending rate unchanged, reflecting the easing concerns surrounding inflation.
"While some voices advocate for a rate cut to provide an impetus to growth, the RBI is likely to exercise caution and wait before contemplating such a step," he said.
He further said the robust GDP growth rate of 7.2 per cent achieved by the Indian economy in the financial year 2022-23 showcases its remarkable resilience in the face of global challenges.
The construction, trade, and hospitality sectors witnessed substantial double-digit expansion. These numbers also bode well for the real estate sector, with the government continuing to provide support to stimulate its growth, he added.
Pradeep Aggarwal, Founder and Chairman, Signature Global (India) too said the central bank is likely to maintain the status quo in policy rate.
"However, if there is an opportunity, we believe the apex bank should consider announcing a cut in policy rates, even if it is a small one. This could have a positive impact on consumer sentiment, benefiting the interest-sensitive real estate sector," Aggarwal said.
The actual decisions made by the RBI, will depend on various factors, including economic data, inflation trends, global economic conditions, and the prevailing challenges, experts said.
V Swaminathan, Executive Chairman, Andromeda loans and Apnapaisa.com said given the current circumstances, "our expectation from the RBI is to refrain from raising policy rates, as it may negatively affect loan demand. We believe that, if not a cut, maintaining stable interest rates would be advantageous in supporting ongoing economic growth and fostering a conducive lending environment".
The government has mandated the RBI to ensure CPI inflation at 4 per cent with a margin of 2 per cent on either side.
The other members of the MPC are: Shashanka Bhide (Honorary Senior Advisor, National Council of Applied Economic Research, Delhi); Ashima Goyal (Emeritus Professor, Indira Gandhi Institute of Development Research, Mumbai); Jayanth R Varma (Professor, Indian Institute of Management, Ahmedabad); Rajiv Ranjan (Executive Director, RBI); and Michael Debabrata Patra (Deputy Governor, RBI).

Since May 2022, the RBI has increased the repo rates six times continuously to 6.5 per cent from 4.15 per cent but surprised the market in the April review with a pause but maintained that liquidity absorption will continue

RBI monetary policy: here's what analysts at Goldman Sachs expects 

Since May 2022, the RBI has increased the repo rates six times continuously to 6.5 per cent from 4.15 per cent but surprised the market in the April review with a pause but maintained that liquidity absorption will continue

Forecasting a steeper fall in inflation to the tune of 50 bps lower than previously projected, a Wall Street brokerage sees the central bank leaving the policy rates unchanged at 6.5 per cent in the forthcoming review on June 8.
Analysts at Goldman Sachs India in a report on Friday said the headline inflation will average 5.3 per cent this year, which is within the RBI target of 2 per cent plus or minus 4 per cent, even though they expect some risk to food inflation stemming from crop damages due to unseasonal rains.
It can be noted that retail inflation has declined to an 18-month low of 4.7 per cent in April from 5.7 per cent in March. Moreover, core inflation has also fallen to 5.2 per cent in April.
Going forward, we see average headline inflation at 5.3 per cent in 2023, which is within the RBI target of 2-6 per cent. This means that in Q2 of 2023 (Q1 of FY24) headline inflation is likely to be around 50 bps below the most recent RBI forecast. This will have the RBI keeping the policy repo rate unchanged at 6.50 per cent in the June 8 policy meeting and expect the central bank to remain on hold till the end of the year, the agency said in the report.
Since May 2022, the RBI has increased the repo rates six times continuously to 6.5 per cent from 4.15 per cent but surprised the market in the April review with a pause but maintained that liquidity absorption will continue.

Benchmark indices, Bond yields, Rupee reacted sharply to the RBI's credit poliy of keeping the repo rate unchanged

RBI Credit Policy: How markets, bond yield and rupee reacted?

Benchmark indices, Bond yields, Rupee reacted sharply to the RBI's credit poliy of keeping the repo rate unchanged

Reserve Bank of India has kept the repo rate unchanged at 6.5%. However, the governor Shaktikanata Das has said that this pause is only for this meeting and will be changed if the situation warrants.
Meanwhile, the Indian benchmark indices, Bond yields and the rupee reacted sharply to the Monetary Policy Committe's decision.
Markets were in the red before the announcement, as investors were cautious. The BSE sensex fell 165.16 points to 59,524.15 after a weak beginning. The broader NSE Nifty declined 45.5 points to 17,511.55. Both the indices had fallen by 0.3% ahead of the RBI announcement. Immediately, after the announcemet, the indices gained and reversed the early losses. The Niftywas up 0.15% at 17,582.95 as of 10:14 a.m. IST, while the Sensex rose 0.18% to 59,795.93.
The Bond yield also crashed sharply during the morning trade, after Governor Shaktikanta Das's announcement. Before the announcement, the yield on the 10-year benchmark 7.26% 2032 bond were trading at 7.1980% as of 10:35 am IST, as against 7.2750% close on the previous trading session. After the announcement, the bond yield went as low as 7.1469%. The liquid five-year 7.38% 2027 bond yield crashed as much as 16 bps to 7.01%.&nbsp;
The Indian Rupee also declined agains the U.S. dollar. Before the announcement the Rupee was at 81.88 per U.S. Dollar. As RBI declared no change in the repo rate, the Rupee declined to an intraday low of at 82.06 per U.S. dollar.

Earlier,  RBI Governor Shaktikanta Das said despite the multiple shocks to the global economy from the pandemic, the worst of inflation is behind us 

RBI monetary policy: here's what experts predict  

Earlier, RBI Governor Shaktikanta Das said despite the multiple shocks to the global economy from the pandemic, the worst of inflation is behind us&nbsp;

The Reserve Bank of India (RBI) is expected to raise interest rates by 25 basis points, in line with recent increases by other major central banks as long as inflation stays high, according to the majority of D-Street analysts and experts. They also anticipate that the most recent increase, if it occurs, will be the final one in the cycle.
The Monetary Policy Committee (MPC) of the Reserve Bank is meeting for three days on April 3, 5 and 6 and will announce the policy on Thursday.
Analysts maintained that the policy tone will likely be balanced with the move to a neutral stance.
MPC will take into account various domestic and global factors before coming out with the first bi-monthly monetary policy for fiscal 2023-24.
Along with elevated retail inflation in India, the other factor of consideration is the recent rate hike actions and hawkish stance taken be central banks of other countries including the U.S Fed and European Central bank.&nbsp; The Reserve Bank on India (RBI) has been raising benchmark rates since May 2022 to contain inflation which has been largely driven by external factors, especially the disruption of the global supply chain following the outbreak of the Russia-Ukraine war.
In its last policy meeting held in February, RBI had raised the policy rate or repo by 25 basis points to 6.50 per cent.
Retail inflation was 6.52 per cent in January and 6.44 per cent in February.

The Reserve Bank of India has increased the key repo rate by 25 basis points to 6.5%. GDP growth projected at 6.4% for 2023-24 and the central bank will continue to keep a strong vigil on inflation. 

Highlights of RBI's monetary policy statement

The Reserve Bank of India has increased the key repo rate by 25 basis points to 6.5%. GDP growth projected at 6.4% for 2023-24 and the central bank will continue to keep a strong vigil on inflation.&nbsp;

Get ready to pay more for your loan EMIs. The Reserve Bank of India has hiked the key repo rate by 0.25% to 6.5%. This is the 6th rate hike by the central bank since May 2022. The RBI governor said that the impact of the rate hikes are still working their way through the system. Here are the key highlights of the governor&rsquo;s speech. INDIAN ECONOMIC OUTLOOK The Indian economy remains resilient. Sustained urban and rural demand, govt&rsquo;s thrust on capital expenditure among other things should sustain economic activity. In fact, several high frequency indicators point towards strengthening of activity. However, a weak external demand and uncertain global scenario could be a drag on India&rsquo;s growth. GDP growth for 2023-24 has been projected at 6.4%. ON INFLATION The governor pointed out that core inflation is sticky and that remains a matter of concern. The RBI will remain unwavering in the commitment to bring down inflation. Inflation is projected at 6.5% for 2022-23 and at 5.3% for 2023-24. From the governor&rsquo;s comments, it&rsquo;s clear that another rate hike has not been ruled out. The RBI will &ldquo;weigh all incoming data and forecasts to determine appropriate action and policy state going forward&rdquo;.
ON THE RUPEE The RBI governor highlighted that the Indian rupee was one of the least volatile currencies among other Asian currencies. He also pointed out that the depreciation and volatility of the Rupee is much lower than during the global financial crisis. GLOBAL OUTLOOK On the global scenario, the RBI governor said that things do not look as grim as they did a few months ago, however a high degree of uncertainty remains. Inflation, although has eased, still remains above the target in major economies.

RBI has raised rates by a total 190 basis points since its first unscheduled mid-meeting hike in May&nbsp;

RBI Monetary Policy Live Updates: Repo rate hiked by 35 bps

RBI has hiked the repo rate for the fifth time in a row

RBI has raised rates by a total 190 basis points since its first unscheduled mid-meeting hike in May&nbsp;

The Reserve Bank of India's Monetary Policy Committee voted 5-1 to increase increase repo rate by 35 basis points to 6.25 percent, RBI Governor Shaktikanta Das said on December 7. Further, Standing Deposit Facility rate and Marginal Standing Facility rate are also increased by 35 basis points each to 6 percent and 6.5 percent, respectively.

RBI has been aggressively raising the key interest rate since May in a bid to contain inflation. It has so far raised the short term lending rate by 190 basis points taking the rate to a nearly three-year high of 5.9 per cent

RBI's MPC to discuss inflation report on Nov 3

RBI has been aggressively raising the key interest rate since May in a bid to contain inflation. It has so far raised the short term lending rate by 190 basis points taking the rate to a nearly three-year high of 5.9 per cent

In order to keep retail inflation below the target, the Reserve Bank will hold a special meeting of its rate-setting committee on November 3.
According to reports, RBI is going to prepare a report for the government on why it failed to keep retail inflation below the target of 6 per cent for three consecutive quarters since January.
The six-member Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das will prepare the report on reasons for failure to meet the inflation target as well as the remedial measures the central bank is taking to bring down prices in the country.
"Under the provisions of Section 45ZN of the Reserve Bank of India (RBI) Act 1934... an additional meeting of the MPC is being scheduled on November 3, 2022," RBI said in a statement. RBI has been aggressively raising the key interest rate since May in a bid to contain inflation. It has so far raised the short term lending rate by 190 basis points taking the rate to a nearly three-year high of 5.9 per cent.
The next bi-monthly meeting of MPC is is scheduled to be held from December 5-7, 2022.

Rbi Monetary Policy Highlights : Making it to the fourth consecutive rate hike, the Reserve Bank of India raised the benchmark lending rate by 50 basis points to 5.90 per cent in a bid to tame inflation.

Rbi Monetary Policy Highlights : RBI hikes repo rate to rein in inflation, lowers GDP forecast

RBI hikes repo rate to rein in inflation, lowers GDP forecast

Reserve Bank of India raised the benchmark lending rate by 50 basis points to 5.90 per cent

Rbi Monetary Policy : Making it to the fourth consecutive rate hike, the Reserve Bank of India raised the benchmark lending rate by 50 basis points to 5.90 per cent in a bid to tame inflation.
With the latest hike, the repo rate or the short term lending rate at which banks borrow from the central bank is now close to 6 per cent.In all, RBI has raised benchmark rate by 1.90 per cent since May this year.
The six-member <a href="https://www.editorji.com/business-news/rbi-increases-repo-rate-by-50-bps-to-5-9-1664513435505">Monetary Policy Committee (MPC) </a>headed by RBI Governor Shaktikanta Das decided in favour of the rate hike.The Consumer Price Index (CPI) based inflation, which RBI factors in while fixing its benchmark rate, stood at 7 per cent in August. Retail inflation has been ruling above the RBI's comfort level of 6 per cent since January this year. Das retained the inflation projection at 6.7 per cent for the current fiscal while slashing real GDP growth estimate to 7 per cent from earlier forecast of 7.2 per cent for FY'23.

The decision of RBI Governor Shaktikanta Das headed six-member Monetary Policy Committee (MPC) has been announced on Friday. The Reserve Bank of India (RBI) has hiked the repo rate by 50 basis points to 5.90%, the fourth straight increase in the current cycle, to tame sustained above-target retail inflation rate.
RBI had slashed the repo rate in March, 2020 with an aim to cushion the impact of covid-induced lockdown, and maintained status-quo in the benchmark interest rate for almost two years before increasing it on May 4, 2022.

RBI increases Repo rate by 50 bps to 5.9%

RBI has maintained consumer price index (CPI) inflation forecast for FY23 at 6.7%
<div class="clearfix socialHolder Gplus">&nbsp;</div>

The decision of RBI Governor Shaktikanta Das headed six-member Monetary Policy Committee (MPC) has been announced on Friday. The Reserve Bank of India (RBI) has hiked the repo rate by 50 basis points to 5.90%, the fourth straight increase in the current cycle, to tame sustained above-target retail inflation rate.
RBI had slashed the repo rate in March, 2020 with an aim to cushion the impact of covid-induced lockdown, and maintained status-quo in the benchmark interest rate for almost two years before increasing it on May 4, 2022.

RBI policy: central bank to fire the rate rage machine again

RBI to fire the rate rage machine again

India is closely knit to the global economy and had to take remedial actions to control inflation, which is driven by domestic as well as global factors

The Central Banks around the world have been raising interest rates since the middle of 2022 after the continuous hostilities between Russia-Ukraine led to initial higher inflation across the globe.&nbsp;
As the Federal Reserve raised rates by 75 basis points and the central banks of the UK and the EU have also gone for rate hikes to tame inflation, the Reserve Bank of India (RBI) may also take cues from its global counterparts.&nbsp;
The consumer price index (CPI) based on retail inflation, which had started showing signs of moderation in May, has again firmed up to 7 per cent in August. The RBI takes into account retail inflation while framing its bi-monthly monetary policy.
The RBI, which has since May raised the repo rate by 140 basis points (bps), may again go for a 50-bps increase to take it to a three-year high of 5.9 per cent, say experts.&nbsp;
The government has tasked the RBI to ensure the retail inflation remains at 4 per cent, with a margin of 2 per cent on either side.&nbsp;
RBI had effected 50 basis points increase in repo rate each in June and August after raising the short-term lending rate by 40 basis points in an off-cycle decision in May.
The MPC, headed by RBI Governor Shaktikanta Das, is scheduled to meet during September 28-30.&nbsp;

With Inflation being the biggest elephant in the room to fending off further attacks on the rupee, EJBIZ explains what are the key factors India’s central bank is expected to deliver in its main policy rate on Aug 5th: 

US Fed has made another aggressive rate hike by 75 basis points in the latest policy to tame inflation. RBI is also expected to hike the rate for the third consecutive time. Experts predict a rate hike of 25-50 basis points from RBI in this upcoming policy. 
As the meeting comes at a time when global central banks are tightening the monetary policy and raising interest rates, many experts now believe that the RBI is more likely to go for a 25-35 basis points (BPS) increase in policy rate than a 50 bps hike.
Currently, inflation is at 7.01% in June and has been above RBI's comfort zone of 6% for the sixth-consecutive month.
While the rupee has hit a series of lows in recent months, dropping past 80 to a dollar in July, it has pulled back amid signs of returning foreign fund inflows. It is advisable that RBI should keep a tab on interest rate differentials with the US to curb any build-up of speculative pressures on the INR, triggered by low implied yields that reduces the cost of shorting rupee. 


RBI monetary policy preview: What to expect from rates

RBI set to hike rates back to the pre-pandemic level. Gear up for further pressure on you EMIs. 

RBI monetary policy: The key expectations

RBI monetary policy preview : Highly likely the six-member panel will go for another interest rate hike to curb rising inflation

RBI monetary policy preview: The <a href="https://www.editorji.com/business-news/rbi-monetary-policy-preview-what-to-expect-from-rates-1659612114383">Reserve Bank of India's Monetary Policy</a> Committee will announce its decision on rates at 10 am on August 5 and the street is betting yet again on hike in rates. The bets vary from 25-50 bps as Governor Shaktikanta Das continues to attempt slaying the impact of imported inflation.
<h3>Here are the factors at play on the MPC's agenda:&nbsp;&nbsp;</h3>
<ul>
<li>As US Fed has made another aggressive rate hike by 75 basis points in the latest policy to tame inflation.</li>
<li>The pace of hikes by the Fed is the fastest in 40 years last seen in the era of Paul Volcker</li>
<li>Currently, inflation is at 7.01% in June and has been above RBI's comfort zone of 6% for the sixth-consecutive month.</li>
<li>Reserve Bank of India&rsquo;s six-member monetary policy committee will now likley increase the repurchase rate by 50 basis points to 5.40%, a level last seen in August 2019.</li>
<li>Commentary on currency also remains critical as the rupee languishes at record low and India's trade deficit also hitting record high.&nbsp;</li>
</ul>
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Beyond inflation and growth, the markets were buzzing with the term 'SDF' as the Reserve Bank of India began it's process of post pandemic normalisation but did not tinker with policy rates. In a bid to manage liquidity in the market the central bank introduced Standing Deposit Facility or SDF at 3.75 per cent. This is the rate at which banks can park their excessive funds with the RBI and other side is MSF (@ 4.25%)where they can borrow an additional amount of overnight money from the central bank. 
At both ends of liquidity corridor, the standing facility at the base will absorb liquidity while the one at the other end will inject liquidity, governor Shaktikanta Das said.Generally, RBI uses reverse repo to absorb liquidity. In reverse repo, RBI takes liquidity from the banks and gives reverse repo rate of interest to the banks and keeps government securities (GSec, SDL, Tbills) as collateral. The SDF replaces the need for collateral and makes it a more smooth and efficient process. The impact of an SDF floor being fixed at 3.75% indicates further hikes in fixed deposit and savings rate as effectively the savings rate for banks is also now higher by 40 bps vs the previous benchmark of the reverse repo. 

SDF Explained: It matters for your savings and FD rates

In a bid to manage liquidity in the market the central bank introduced Standing Deposit Facility or SDF at 3.75 per cent. This is the rate at which banks can park their excessive funds with the RBI and other side is MSF (@ 4.25%)where they can borrow an additional amount of overnight money from the central bank. 

SDF Explained: RBI starts 'normalising' rates 

This concept was first recommended by the Urjit Patel committee&nbsp;report in 2014

Beyond inflation and growth, the markets were buzzing with the term 'SDF' as the Reserve Bank of India began it's process of post pandemic normalisation but did not tinker with policy rates.&nbsp; In a bid to manage liquidity in the market the central bank introduced&nbsp;Standing Deposit Facility or SDF at 3.75 per cent. This is the rate at which banks can park their excessive funds with the RBI&nbsp;and other side is MSF&nbsp;(@ 4.25%)where they can borrow an additional amount of overnight money from the central bank.&nbsp;
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At both ends of liquidity corridor, the standing facility at the base will absorb liquidity while the one at the other end will inject liquidity, governor Shaktikanta Das said. Generally, RBI uses reverse repo to absorb liquidity. In reverse repo, RBI takes liquidity from the banks and gives reverse repo rate of interest to the banks and keeps government securities (GSec, SDL, Tbills) as collateral. The SDF&nbsp;replaces the need for collateral and makes it a more smooth and efficient&nbsp;process.&nbsp;
Also read/watch |&nbsp;<a href="https://www.editorji.com/business-news/cryptocurrency/crypto-heist-top-5-blockchain-thefts-of-all-time-1648633725093" target="_blank">Crypto heist: top 5 blockchain thefts of all time</a> The impact of an SDF&nbsp;floor being fixed at 3.75% indicates further hikes in fixed deposit and savings rate as effectively the savings rate for banks is also now higher by 40 bps vs the previous benchmark of the reverse repo.&nbsp;

As inflation continues to haunt the common man, the RBI is warning it is going to be painful for a long time. The central bank raised their inflation forecast for the year sharply and now expects the full-year CPI to average above its tolerance level. Here are the projections-:FY 23 CPI projected at 6.7% vs 5.7% earlierQ1 CPI seen 7.5% at vs 6.3% earlierQ2 CPI seen 7.4 % at vs 5.8% earlierQ3 CPI seen 6.2% at vs 5.4% earlierQ4 CPI seen 5.8% at vs 5.1% earlier

RBI raises inflation forecast sharply, price pain to remain

As inflation continues to haunt the common man, the RBI is warning it is going to be painful for a long time.

The global economy continues to grapple with multi-decadal high inflation and slowing growth

As inflation continues to haunt the common man, the RBI is warning it is going to be painful for a long time. The central bank raised their inflation forecast for the year sharply and now expects the full-year CPI&nbsp;to average above its tolerance level. Here are the projections-:
Also read/watch| <a title="RBI Monetary Policy: Repo rate hike again, shocks with 50 bps hike" href="https://www.editorji.com/business-news/markets/rbi-monetary-policy-repo-rate-hike-again-shocks-with-50-bps-hike-1654662962773">RBI Monetary Policy: Repo rate hike again, shocks with 50 bps hike</a> FY 23 CPI projected at 6.7% vs 5.7% earlier Q1 CPI seen 7.5% at vs 6.3% earlier Q2 CPI seen 7.4 % at vs 5.8% earlier Q3 CPI seen 6.2% at vs 5.4% earlier Q4 CPI seen 5.8% at vs 5.1% earlier 
RBI Governor Shaktikanta Das said the upside risk to inflation persists and the recent spike in tomato prices would fuel food inflation. Also, high global crude oil prices would add to the upside pressure on inflation.
The upward revision in inflation projection comes as domestic retail inflation has remained above RBI's comfort level of 6 per cent for four months in a row, mainly due to the Russia-Ukraine war which has impacted the prices of commodities across the globe. Das said normal south-west monsoon would boost kharif sowing and agri output. However, global geo-political situation remains fluid and commodity market remains on the edge.
A rise in price across all items from fuel to vegetables and cooking oil pushed WPI or Wholesale Price Inflation to a record high of 15.08 per cent in April and retail inflation to a near eight-year high of 7.79 per cent.
RBI has the mandate to keep inflation at 4 per cent with a bias of 2 per cent on either side. - With inputs from PTI

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