RBI Monetary Policy 2019 Updates: Forensic audit on PMC Bank scam expected by month-end, says Shaktikanta Das
If the Reserve Bank of India (RBI) cuts the repo rate today, it would be the sixth reduction in the short-term lending rate this financial year.
 "RBI Monetary Policy 2019 Updates: Forensic audit on PMC Bank scam expected by month-end, says Shaktikanta Das")
‘Govt, RBI should initiate stronger measures to break the logjam’
“We note with concern that the transmission of the earlier policy rate cuts has not happened adequately, and are disappointed with the decision to not cut the repo rate as there is a need for continued action on the policy rate front,” said Sandip Somany, president, FICCI.
With the growth projection for the current year being revised down from 6.1 percent to 5 percent, both government and the central bank should initiate some stronger measures to break the logjam particularly in the stressed sectors of the economy, he said.
‘RBI pushing onus of growth support to govt’
“We believe that recent inflation prints have taken precedence over the growth concerns. In fact, seemingly, the RBI is pushing the onus of growth support to the government,” said Kotak Institutional Equities.
Further, the RBI wants to wait-and-watch the effect of government’s measures and RBI’s past rate cuts, it said.
‘Markets will stay edgy in near term’
“By deciding to pause policy rate cut at this juncture, MPC managed to not only surprise the market but also change track from its earlier message of “growth first…. till whenever it takes” in favour of prudence till macro-dynamics remain in flux, said Rajni Thakur, economist, RBL Bank.
“While the incoming macro data was already making market dynamics unpredictable, now with surprises on monetary policy, markets will likely stay edgy in near term,” Thakur said.
‘Imperative for banks to reduce lending rates immediately’
The growth trajectory of the real estate sector will depend on the successive transmission of rate cuts to the end consumers and translate into lower EMIs, said Surendra Hiranandani, Chairman and Managing Director, House of Hiranandani.
However, it has been observed that, despite the reduction in repo rates by the RBI in the previous reviews, it did not have any significant impact on lending rates. Going forward, it is imperative for banks to reduce the lending rates and ensure that the home loan borrowers reap the benefits of this move.
‘Status quo hikes credibility of RBI’s inflation mandate’
Today’s status quo increases the credibility of RBI’s inflation mandate, said Nikhil Gupta, chief economist, Motilal Oswal Financial Services.
“We had always believed that today’s cut would be the last rate cut in this cycle. We continue to maintain that there will be no more rate cuts now unless inflation falls back towards 4%. It implies that any rate cut is unlikely in the next one year,” said Gupta.
‘RBI’s rate pause, cut in GDP growth forecast surprising’
“RBI’s rate pause and the second successive sharp downward revision of the GDP estimate for FY20 have been surprising," said Sujan Hajra, chief economist and executive director, Anand Rathi Shares & Stock Brokers.
More than flare in inflation, lack of transmission of rate cut seems to have been the bigger reason for the rate pause, Hajra said.
RBI revises CPI inflation forecast for H2 FY20 to 5.1-4.7%
#RBIPolicy | Central bank revises CPI inflation forecast for H2FY20 to 5.1-4.7%https://t.co/T2Uxei1liF
— CNBC-TV18 (@CNBCTV18Live) December 5, 2019
‘Forensic audit report on PMC Bank soon’
Forensic audit report on PMC Bank is expected by the end of this month, said the RBI governor.
‘RBI in cognisance of HDFC Bank net banking issue’
Deputy governor MK Jain said that RBI is in cognisance of the HDFC Bank net banking issue and that it has been restored fully.
‘RBI against private digital currency’
Shaktikanta Das said that the central bank is against any kind of private digital currency.
‘RBI better placed to certain cases to NCLT’
RBI also in-charge of financial stability and is better placed to refer certain cases to NCLT. It is a pragmatic decision, says Shaktikanta Das.
Cannot cut rates mechanically every time: RBI
“We cannot be mechanically cutting rates every time, need to wait for the government and RBI measures to play
out,” says Shaktikanta Das
‘Credit flow slowly revives in NBFC sector’
Credit flow is slowly reviving in NBFC sector and funds are being accessed at pre-IL&FS rate by better performing NBFCs, says Shaktikanta Das.
Monetary policy cannot have multiple targets: RBI
The RBI governor said that monetary policy cannot have multiple targets. “Target is price stability keeping in mind the objective of growth,” Shaktikanta Das said.
‘Won’t hesitate to prevent collapse of any large NBFC’
Have a fairly good idea as to which NBFCs are vulnerable; won't hesitate to prevent collapse of any large NBFC, says @RBI governor @DasShaktikanta #OnCNBCTV18 pic.twitter.com/q1IfbfRgud
— CNBC-TV18 (@CNBCTV18Live) December 5, 2019
‘Can’t rule out fall in direct tax collections’
The RBI governor has said that fall in the direct collections cannot be ruled out due to economic slowdown.
Can't rule out fall in Direct Tax collections due to economic slowdown, says @DasShaktikanta #RBIPolicy pic.twitter.com/jX4E1wl007
— CNBC-TV18 (@CNBCTV18Live) December 5, 2019
RBI, govt to work in coordinated manner: Shaktikanta Das
RBI and government will work in a coordinated manner, Shaktikanta Das said. “Both are committed for the revival of growth,” said the RBI governor.
‘Books of NBFCs under watch’
“We are making a deep-dive into the books of non-banking finance companies (NBFCs) wherever required and know where the vulnerabilities lie,” says RBI governor Shaktikanta Das.
Timing of rate cut important: Shaktikanta Das
RBI governor Shaktikanta Das says that the timing of rate cut is also important to optimise its impact.
“Let the 125 bps rate cut impact play out,” he said.
‘Core inflation will remain below 4%’
Core inflation will remain below 4 percent, says RBI governor.
The RBI chief said that inflation moderation in the coming months is dependent on several factors.
RBI to facilitate setting up of self-regulatory body
Shaktikanta Das has said that that the Reserve Bank will facilitate the setting up of a self-regulatory body (SRB) as a first step towards the development of the secondary market for corporate loans.
Pessimism in manufacturing sector: RBI survey
According to the early results of the Reserve Bank’s industrial outlook survey, overall sentiment in the manufacturing sector remained in pessimism in Q3FY20 due to continuing downbeat sentiments on production, domestic and external demand, and the employment scenario.
Exports contract in September: RBI
Shaktikanta Das said that as regards the external sector, exports contracted in September-October 2019 reflecting the persisting weakness in global trade but non-oil export growth returned to positive territory in October.
Reserve Bank of India (RBI) Governor Shaktikanta Das: As regards the external sector, exports contracted in September-October 2019 reflecting the persisting weakness in global trade but non-oil export growth returned to positive territory in October, after a gap of 2 months. pic.twitter.com/7gAQXItLWm
— ANI (@ANI) December 5, 2019
Sensex drops over 100 points as RBI leaves policy rate unchanged
Equity benchmark BSE Sensex dropped over 100 points in the afternoon session on Thursday after the the Reserve Bank of India kept the key policy rate unchanged at 5.15 percent and decided to continue with its accommodative stance to support the economy.
Forex reserves jump to new high of $451.7 bn
Forex reserves jump to a new high of $451.7 billion as of 3 December, said the RBI governor.
Inflation rises sharply in November: RBI
Inflation has increased sharply in November and may stay high for some time, says the RBI governor.
‘Domestic demand slows down’
RBI governor Shaktikanta Das says that domestic demand has slowed down, which is being reflected in the softening of inflation excluding food and fuel.
Several government measures and RBI decisions are expected to further feed into the economy, says Das.
Service sector activity remains weak: Shaktikanta Das
Shaktikanta Das says that service sector activity generally remained weak in October.
Marginal pickup in business sentiments likely in Q4: RBI
Based on the early results, RBI said the business expectations index of the Reserve Bank’s industrial outlook survey indicates a marginal pickup in business sentiments in Q4.
‘Union Budget will provide better insight into further measures for growth’
RBI said that the forthcoming Union Budget will provide better insight into further measures to be undertaken by the government and their impact on growth.
Sensex erases gains after RBI policy announcement
The BSE Sensex erased the gains in the morning session and slipped into the red after the RBI policy announcement.
Rupee slips 8 paise to 71.61 against dollar
Rupee slips 8 paise to 71.61 against the dollar after the RBI leaves the policy rate unchanged.
Economic activity weakens further: MPC
The MPC said that economic activity has weakened further and the output gap remains negative. However, several measures already initiated by the government and the monetary easing undertaken by RBI since February 2019 are gradually expected to further feed into the real economy.
The Monetary Policy Committee notes that the economic activity has weakened further & that delay in domestic demand revival is a downside risk for #GDP pic.twitter.com/BddgPqIKfJ
— CNBC-TV18 (@CNBCTV18Live) December 5, 2019
RBI revises inflation projection upwards to 5.1-4.7%
RBI revises retail inflation projection upwards to 5.1-4.7 percent for the second half of this fiscal.
GDP growth forecast for 2019-20 reduced to 5%
RBI cuts GDP growth forecast for the current fiscal year to 5 percent from 6.1 percent in the October policy.
CPI inflation projection revised
The CPI inflation projection is revised upwards to 5.1-4.7 percent for H2 2019-20 and 4.0-3.8 percent for H1 2020-21, with risks broadly balanced.
All MPC members vote unanimously
All members of the MPC – Chetan Ghate, Pami Dua, Ravindra H Dholakia, Michael Debabrata Patra, Bibhu Prasad Kanungo and Shaktikanta Das – voted in favour of the decision.
MPC to continue with accommodative stance
The MPC also decided to continue with the accommodative stance as long as it is necessary to revive growth, while ensuring that inflation remains within the target
#RBIPolicy | Monetary Policy Committee maintains repo rate at 5.15% pic.twitter.com/f5ZG0wlps0
— CNBC-TV18 (@CNBCTV18Live) December 5, 2019
No cut in interest rate, RBI maintains repo rate at 5.15%
The central bank has not cut the interest rate against the expectations and maintained the repo rate at 5.15%.
Lending activity yet to pick up despite 5 rate cuts in a row
Despite five consecutive repo rate cuts by RBI, the lending activity is yet to pick up in the country.
In five reductions so far in 2019, interest rates have been lowered by a total of 135 basis points over concerns that growth momentum is slowing down and also to try to boost liquidity in the financial system.
Fall in GDP growth rate major concern
The decline in GDP growth rate, which fell over six-year-low at 4.5 percent in July-September quarter, was despite a slew of new fiscal policy measures including a large reduction in the base corporate tax rate in a bid to boost private sector investment.
Rupee opens flat at 71.53 agsinst dollar in early trade ahead of RBI policy decision
The rupee opened on a steady note at 71.53 against the US dollar in early trade on Thursday ahead of the Reserve Bank of India’s monetary policy decision.
Forex traders said, the domestic unit was trading in a narrow range as investors are trading cautiously ahead of the RBI policy decision.
#Rupee opens higher Vs yesterday's close pic.twitter.com/uTmZtGDyrc
— CNBC-TV18 (@CNBCTV18Live) December 5, 2019
Equities trade higher in opening deals ahead of RBI policy decision
The share market nudged higher in opening deals on Thursday, helped by hopes of a rate cut by the Reserve Bank later in the day and a possibility of a trade deal between the US and China sooner than speculated.
The RBI will announce its monetary policy decision at 1145 hours, followed by a press conference.
Bankers say RBI likely to cut repo rate by 25 bps
Most bankers see the Monetary Policy Committee cutting repo rate by 25 bps in today’s RBI Policy.
Most bankers see Monetary Policy Committee cutting Repo Rate by 25 bps in today’s #RBIPolicy pic.twitter.com/qmeLcb6V3O
— CNBC-TV18 (@CNBCTV18Live) December 5, 2019
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