RBI keeps interest rates unchanged on inflation risks
The Dollar Business Bureau The Reserve Bank of India (RBI), in its sixth bimonthly Monetary Policy Committee meeting, on Wednesday kept the repo rate unchanged at 6%, while hinting on tight monetary conditions due to rising inflation risks. The Bank also increased the Consumer Price Index (CPI) inflation forecast for March-end to 5.1% and estimated that inflation would be in the range of 5.1-5.6% in the first six months of the next fiscal. “On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6%,” RBI said in a statement. “Consequently, the reverse repo rate under the LAF remains at 5.75%, and ...
Nikkei India PMI says services sector grew fastest in May
The Dollar Business Bureau The Nikkei India Services Purchasing Managers’ Index (PMI) which tracks the services sector output monthly, said that India’s services sector activity increased at the fastest pace in May 2017. This is because of the increased work orders that prompted companies to employ more workforce to handle the workloads. PMI said the Index rose to 52.2 in May compared to 50.2 in April. Although the job growth rate was moderate, it was fastest in almost 4 years. The author of the report, Pollyana De Lima commenting on it said, “The pick-up in service sector growth seen mid-way through the first quarter (FY) suggests that GDP could expand at a faster rate should growth momentum be maintained in June, though ...
GDP growth likely to slip to 6.7% in the March quarter: Nomura
The Dollar Business Bureau India's GDP growth is likely to slip to 6.7% in the January-March quarter from 7%, but could gradually recover to 7.7% in 2018, predicted the Japanese financial services major Nomura. The gradual recovery to 7.7% could happen due to higher consumption- as a result of state pay hikes, lower lending rates and remonetisation and public spending, the report stated. "In our view, the recovery in industrial production should gather momentum through 2017 supported by ongoing remonetisation, release of pent-up consumption demand, lower lending rates, higher public capex and impending pay hikes for state government employees." Making a mention of the after-effects of demonetisation, Nomura said that the soft industrial activity that was seen in February was due to the ...
The week that was: oil, sugar and core sector growth
By Abin Daya It is very rare that you will find a month in which all the 8 core sector industries have had positive growth. No, it did not happen in Feb 2017; but it happened a year back – in Feb 2016! Before that it happened in 2010 – that too, three months in a row! In the case of Feb 2016, what made the month even more special was that 4 out of 8 core sector industries grew in double digits! Understandably, when something like that happens, you expect a significantly high rate of growth for the sector. Core sector grew at 9.4% in Feb 2016. Compare that with the core sector performance a year later, in Feb 2017. Such a ...
The week that was: oil, sugar and core sector growth
By Abin Daya It is very rare that you will find a month in which all the 8 core sector industries have had positive growth. No, it did not happen in Feb 2017; but it happened a year back – in Feb 2016! Before that it happened in 2010 – that too, three months in a row! In the case of Feb 2016, what made the month even more special was that 4 out of 8 core sector industries grew in double digits! Understandably, when something like that happens, you expect a significantly high rate of growth for the sector. Core sector grew at 9.4% in Feb 2016. Compare that with the core sector performance a year later, in Feb 2017. Such a ...
RBI may cut repo rate by 25 basis points in Feb: HSBC
PTI With uncertainty over implementation of GST, rising crude oil prices and the challenging 4% CPI in medium-term, Reserve Bank of India (RBI) may cut repo rate for the final time by a 25 basis points in the February policy, says a report. “We hold on to our expectation of a 25 basis points rate cut in February, but caution that this would likely bring the easing cycle to an end, given the pressures in the horizon implementation of the GST bill, rising oil prices, implementation of government employees housing allowance, and the challenging 4% CPI target for the medium term,” HSBC said in a report today. RBI has set an objective for achieving consumer price index (CPI) inflation ...
Growth outlook for current fiscal lowered sharply from 7.6% to 7.1% : Anuj Puri, JLL
The Dollar Business Bureau With RBI belying expectations of a rate cut, India Inc today expressed disappointment saying a rate cut was needed to provide a fillip to the flagging industrial economy and stimulate consumption that has been hit by demonetisation. Reacting to the uncut rate, Anuj Puri, JLL India, Chairman & Country Head said, "Contrary to a wider perception that the policy rate will be cut by at least 25 basis points, India’s RBI has kept the repo rate unchanged at 6.25%. However, the growth outlook for the current fiscal year 2016-17 has been lowered sharply from 7.6% y/y projected earlier to 7.1% y/y at the moment. For the real estate sector, which is currently reeling under pressure from the recently-announced demonetization ...
FPIs withdraw Rs.6k cr from Indian debt markets in Oct
The Dollar Business Bureau Foreign investors have withdrawn around Rs.6,000 crore from the country’s debt markets in the first two weeks of October, after investing a huge amount in the month of September. On the other hand, foreign portfolio investors (FPIs) have invested Rs.180 crore in the Indian stock markets during the given period. Siddhant Jain, Chief Operating Officer (COO), SAS Online said that the recent cut in the repo rate by Reserve Bank of India (RBI) is one of the factors that resulted in the outflow. Due to downward pressure on the yields of bond, debt did not look attractive. In addition, new RBI Governor Urijit Patel's dovish stand and flexibility to further reduce rates if required has supported the outflow, he added. The Reserve Bank, on October 4 in its ...
