RBI Monetary Policy HIGHLIGHTS: RBI holds fire for now but signals rate cut in future

By: | Updated:Dec 05, 2018 3:59 pm

RBI Monetary Policy December 2018 HIGHLIGHTS: The Reserve Bank of India (RBI) on Wednesday not only kept the repo rate unchanged at 6.5% but also maintained the 'calibrated tightening' stance.

RBI Monetary Policy LIVE UPDTAES: The RBI will hold its fourth monetary policy meet, in which it is expected to keep the repo rate unchanged. RBI Monetary Policy HIGHLIGHTS: The RBI will hold its fourth monetary policy meet, in which it is expected to keep the repo rate unchanged.

RBI Monetary Policy December 2018 HIGHLIGHTS: The Reserve Bank of India (RBI) on Wednesday not only kept the repo rate unchanged at 6.5% but also maintained the ‘calibrated tightening’ stance. While the market was expecting another status quo from the central bank’s monetary policy committee upon moderate inflation, lower crude oil price and strengthening of the rupee, no change in stance could come as a disappointment to many.

However, governor Urjit Patel signalled the possibility of rate cut in future. “..see space for commensurate policy action if inflation risks don’t materialise,” Patel said.

In the last MPC, the RBI’s decision to not hike the repo rate took everyone by surprise as the market was bracing for it as an intervention amid the rupee rout. RBI governor Urjit Patel defended the decision by saying that the central bank’s mandate is inflation targeting. He also said that the change in stance from ‘neutral’ to ‘calibrated tightening’ meant that the rate cut was off the table.

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RBI Monetary Policy December 2018 HIGHLIGHTS: RBI MPC, Stock Market, Urjit Patel, Rupee, Inflation, Repo Rate, Crude Oil

15:59 (IST) 05 Dec 2018
Inflation projection lowered, but RBI flags 6 concerns

Even as the RBI’s monetary policy committee (MPC) significantly revised the inflation projections downwards, it maintained a cautious stance on account of several uncertainties. Read full story

15:48 (IST) 05 Dec 2018
RBI to issue consolidated norms for forex loans, masala bonds by month end; key things to know

In a bid to consolidate the regulations pertaining to borrowing and lending transactions of resident Indians as well as others the Reserve Bank of India (RBI) will issue consolidated norms for forex loans as well as masala bonds. Read full story

15:38 (IST) 05 Dec 2018
Urjit Patel steers clear of questions on Viral Acharya's speech, rift with government; here's what happened

RBI governor Urjit Patel on Wednesday officially came face-to-face with reporters during policy review press conference first time since rift with the government came to light. However, Patel refused to answer questions related to the controversy, saying that it was a presser on MPC review and macroeconomics. "I already said that I would avoid those questions. We are here discussing the monetary policy committee resolution," Patel told reporters. The central bank governor reiterated the same when asked if he agreed with views shared by Viral Acharya in his speech last month.

15:29 (IST) 05 Dec 2018
Positive surprise from RBI: If inflation risks don't materialise, there could be repo rate cut

RBI governor Urjit Patel while addressing the MPC review press conference hinted at a possible rate cut in future with a rider. '...see space for commensurate policy action if inflation risks don't materialise,' Patel said. 

15:22 (IST) 05 Dec 2018
Markets react to RBI's refusal to soften stance; Sensex drops 350 points

The BSE Sensex dropped nearly 350 points to a low of 35,777.81 points, while the NSE Nifty tanked to the 10,750-level following RBI's decision to reiterate 'calibrated tightening' stance.

15:16 (IST) 05 Dec 2018
Oil now more volatile than it was in October, says Urjit Patel

Even as inflation print has remained below the upper ceiling, RBI governor Urjit Patel said that crude oil price now is much more volatile than it was in October. Explaining further deputy governor Viral Acharya said that volatility in oil can't be ruled out especially when there has been a dramatic fall in just four-five weeks.

15:11 (IST) 05 Dec 2018
Interest rate for borrower to change only if credit rating is changed, says RBI deputy governor

RBI deputy governor NS Vishwanathan said that interest rate for borrower will change only if credit rating of the borrower is changed.

15:09 (IST) 05 Dec 2018
Ravindra H Dholakia emerged dove again! Voted to change stance to neutral

Ravindra H Dholakia emerges as the dove of the Monetary PolicyCommittee again. The MPC decided to keep the policy repo rate on hold and maintain the stance of calibrated tightening. While the decision on keeping the policy rate unchanged was unanimous, Ravindra H Dholakia voted to change the stance to neutral. 

15:03 (IST) 05 Dec 2018
RBI to cut SLR by 25 bps to align it to LCR requirement

The RBI will cut Statutory Liquidity Ratio (SLR) by 25 basis points to align it with Liquidity Coverage Ratio (LCR).

14:58 (IST) 05 Dec 2018
Here's why RBI maintained calibrated tightening stance, governor Urjit Patel explains

Reserve Bank of India (RBI) governor Urjit Patel said that even as the inflation print softened, the meeting called by OPEC later this week on oil price, trade war truce and the fiscal deficit of central and state government will be crucial for decision making. We reiterated calibrated tightening stance to buy more time to pause, reflect and undertake future policy action with more inflation signals, Patel said.

14:52 (IST) 05 Dec 2018
RBI keeps repo rate unchanged, but home loan, car loan interest rates may still go up

The Reserve Bank of India, as widely expected, kept its key policy rate unchanged at 6.50% in its monetary policy review on Wednesday. Still, all types of loans – including home loans, personal loans and car loans – are likely to cost more in the near future. Here's why

14:47 (IST) 05 Dec 2018
RBI chose not to softened stance! Central bank maintained its stance of ‘calibrated tightening’

The six-member Monetary Policy Committee, headed by RBI Governor Urjit Patel, began its three-day meeting on Monday, December 3. While keeping the key policy rate unchanged, RBI has also maintained its stance of ‘calibrated tightening’ of monetary policy. Read full story

14:41 (IST) 05 Dec 2018
No change in stance! RBI maintains calibrated tightening; does it mean no repo rate cut in February too?

The Reserve Bank of India (RBI) on Wednesday maintained its calibrated tightening stance even as inflation print was lower than the upper-ceiling. The central bank changed its stance from neutral to calibrated tightening in October, which, governor Urjit Patel said, meant that rate cut was off the table for rest of the FY19. 

14:34 (IST) 05 Dec 2018
RBI Monetary Policy Decision: As expected, central bank keeps repo rate unchanged at 6.5% but also maintains calibrated tightening stance

The RBI today not only kept the repo rate unchanged at 6.5% but also maintained the 'calibrated tightening' stance.

14:31 (IST) 05 Dec 2018
Will RBI cut repo rate? No! The real question is will RBI go back to neutral stance

As the Reserve Bank of India (RBI), in its October policy meeting, changed the stance to 'calibrated tightening' from 'neutral', the real question is will it go back to neutral stance has inflation and oil price have moderated. Experts are divided on the decision, with some expressing hope that the RBI will go back to a neutral stance. Governor Urjit Patel had said that calibrated tightening meant that rate cut was off the table! 

14:27 (IST) 05 Dec 2018
Countdown begins for RBI policy decision: Urjit Patel to address 1st presser since rift with govt on central bank's autonomy

Reserve Bank of India (RBI) governor Urjit Patel will today address the first press conference after the rift with the government over central bank's autonomy. The RBI MPC holds a press conference after every policy decision.

14:22 (IST) 05 Dec 2018
Market tense ahead of RBI policy meeting: Sensex tumbles 200 points

Broadly negative global cues and caution ahead of the RBI policy pushed the key indices during the afternoon session on Wednesday to trade over 0.5 per cent lower from their previous close. Read full story

14:19 (IST) 05 Dec 2018
Massive fall in GDP growth rate from 8.2% to 7.1% not likely to nudge RBI for rate cut!

The massive fall in the GDP growth rate from 8.2% in Q1 to 7.1% in Q2 is unlikely to nudge the central bank to cut the repo rate, analysts say. Instead, moderate inflation print makes a strong case for the status quo.

14:12 (IST) 05 Dec 2018
RBI Monetary Policy decision: Deliberations began on Monday; status quo expected! Will Urjit Patel speak on RBI autonomy?

The six-member Monetary Policy Committee (MPC), headed by RBI Governor Urjit Patel, began its three-day policy review deliberations Monday amid expectations of status quo on interest rate. All eyes are on governor Urjit Patel who will address first press conference since the rift with the government on central bank's autonomy.

14:00 (IST) 05 Dec 2018
#FunFact: Meet dove and hawk of RBI Monetary Policy Committee

The repo rate decision is taken by the six-member Monetary Policy Committee, headed by RBI governor Urjit Patel. The MPC members are Dr Urjit R Patel, Chetan Ghate, Dr Pami Dua, Dr Michael Debabrata Patra, Dr Viral V Acharya, and Dr Ravindra H Dholakia. While Michael Debabrata Patra is known for his hawkish stance (for rate hikes), Ravindra H Dholakia often takes a dovish stance (against rate hike).

13:46 (IST) 05 Dec 2018
Market tense ahead of RBI monetary policy meet; heavy selling pressure across all sectors except this sector

Sensex and Nifty traded on a cautious note on Wednesday tracking weak global cues and heavy selling pressure across all sectors, barring the IT index.

13:25 (IST) 05 Dec 2018
Viral Acharya's quirky take: If MPC meeting were a musical, RBI governor and FinMin would sing this Kishore Kumar song

On the lighter note: At a book launch in December last year, Viral Acharya, chose a quirky route to explain constant tussle between the Finance Ministry and the RBI over monetary policy decision.

12:54 (IST) 05 Dec 2018
Tight schedule for RBI today: MPC decision at 2.30 pm, presser at 2.45 pm; interaction with analysts at 5 pm

The Reserve Bank of India (RBI) has a tight schedule today. The central bank will announce its policy decision at 2.30 pm, followed by a press conference at 2.45 pm. Later, in the evening, at 5 pm, RBI's top management will interact with researchers/analysts through teleconference.

12:43 (IST) 05 Dec 2018
As back series data cuts UPA-era GDP growth rate, it will be interesting to see how RBI perceives it

The recent extension of the GDP time series and a reasonable downward revision of the backdated series pose an important question on whether India’s potential GDP would also be lower. It will be interesting to see how RBI perceives it, says Upasna Bhardwaj, economist, Kotak Mahindra Bank.

12:23 (IST) 05 Dec 2018
Rate cut is off the table, Urjit Patel had said; and RBI is unlikely to surprise this time

Explaining the rationale behind the unanticipated move of keeping the repo rate unchanged in October, RBI governor Urjit Patel had said that the central bank’s mandate was only inflation targeting and that change in stance to calibrated tightening meant that rate cut was off the table.

12:02 (IST) 05 Dec 2018
#Replug: When RBI was not impressed with cheaper vegetables; here is classic noise vs signal debate

In April, the MPC members maintained the status quo  — but minutes of the meeting showed that they did not rejoice the fact that vegetable prices in the country were cheaper. Reason: Vegetable prices are highly volatile, and largely a “noise” subjugating other more persistent components, or signals (food & fuel) of the headline inflation, which have, on the contrary, strengthened in February. Read full story

11:49 (IST) 05 Dec 2018
#Recap: Urjit Patel said it thrice last time: RBI's mandate is inflation targeting

In October, the Reserve Bank of India (RBI) took a surprising decision of not hiking the repo rate from 6.5%, which spooked the market. Defending the decision, governor Urjit Patel said it at least thrice in the post-policy press conference that the mandate of the central bank is to target inflation.

11:33 (IST) 05 Dec 2018
Repo rate decision to be sideshow; all eyes on Urjit Patel's 1st presser since rift with govt on autonomy

The Reserve Bank of India will probably keep interest rates unchanged on Wednesday, with the decision itself likely to be a sideshow to Governor Urjit Patel’s press conference -- his first since an acrimonious debate with the government over the central bank’s autonomy.

11:22 (IST) 05 Dec 2018
Rupee falls 26 paise to 70.75 per US dollar ahead of RBI monetary policy meet

The rupee depreciated by 26 paise to 70.75 against the US dollar in early trade Wednesday ahead of RBI Monetary Policy meeting. Read Full story

10:51 (IST) 05 Dec 2018
Arvind Virmani, Surjit Bhalla, other top economists hold Shadow MPC; here's what they suggest

Top economists Arvind Virmani, Surjit Bhalla, Indranil Sen Gupta, Charan Singh and others on Tuesday took part in Shadow Monetary Policy Meeting held by EGROW Foundation. The economists suggested the following:

  • Revise the stance from calibrated tightening to neutral
  • Reduce the Repo rate
  • Enhance liquidity in the economy
  • Consider reducing CRR
  • Revisit the concept and conditionality of PCA
10:17 (IST) 05 Dec 2018
What changed since last RBI MPC meet: Rupee appreciated, crude oil price softened but GDP growth slowed

Since the previous policy announcement, the rupee has appreciated against the US dollar and moved above the psychologically crucial mark of 70. Global crude oil prices too have softened significantly, slipping below USD 60 per barrel from USD 86.  India’s economic growth slowed to 7.1 per cent in the September quarter after peaking to an over two-year high in the first three months of this fiscal.

10:08 (IST) 05 Dec 2018
Sensex drops further ahead of RBI policy meet, cracks 260 points; Nifty slips below 10,800

Sensex drops further ahead of RBI policy meet, cracks 260 points; Nifty slips below 10,800 Follow market LIVE blog

09:58 (IST) 05 Dec 2018
Inflation readings have been undershooting RBI’s estimates; expect no change in repo rate

Inflation readings over the past few months have been undershooting RBI’s estimates by over 50 basis points, says Upasna Bhardwaj, economist, Kotak Mahindra Bank. Read full story

The central bank had held its October Monetary Policy Committee (MPC) meeting of FY19 against the backdrop of the sharp depreciation in the rupee, rising crude oil prices, intense pressure on current account deficit (CAD) and liquidity issues.
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