August 21, 2017

RBI makes first rate cut of 2017

03 August 2017, 09:30 | Virginia Santiago

Economists expect the Reserve Bank of India to cut the repo rate by 25 basis points

Economists expect the Reserve Bank of India to cut the repo rate by 25 basis points

The repo rate - the rate at which the central bank lends to commercial banks - now stands at 6.0 percent - a 6½ year low - from a 6.25 percent earlier.

Thus, RBI has constituted internal study group to study the various aspects of the MCLR system from the perspective of improving the monetary transmission and exploring linking of the bank lending rates directly to market determined benchmarks.

Meanwhile, the RBI has constituted an internal group to study the marginal cost of lending rate (MCLR) system for commercial banks created to improve monetary policy transmission, RBI Deputy Governor Viral Acharya said on Wednesday.

Further, there has been a sharp fall in "services" inflation over the a year ago or so with significant contribution from house rents, tuition fees, mobile charges, etc. Most banks will cut their deposit rates and also their lending rates. This cut down on central bank money lending rate is 6 per cent from 6.25 per cent. Chandrajit Banerjee, Director General, CII said, "CII feels that a steeper cut in interest rate would have been more in consonance with market realities". The repo rate slash shall make the loans cheaper for the consumers.

"The trajectory of inflation in the baseline projection is expected to rise from current lows", Patel said. "Premature action at this stage risks disruptive policy reversals later and the loss of credibility." he said.

Arsene Wenger says Alexis Sanchez is staying at Arsenal
Speaking to 24 Horas in Chile, Bravo is quoted as saying today, "If he decides to go, we'll wait for him with open arms at City". In the early game, Leipzig beat Benfica 2-0 thanks to goals from Marcel Halstenberg and Marvin Compper.

According to NDTV, "Weak consumer spending as well as lower food prices have kept inflation below the RBI's mid-term target of 4 per cent for the past eight months".

RBI believes that from here on, retail inflation has only one direction: upwards.

Inflation in Asia's third largest economy has missed forecasts for the last six to seven months, noted DBS economist Radhika Rao. The arguments for the cut were much as expected: (1) lower inflationary pressures with easing food prices, (2) lower core (headline inflation excluding food and fuel products) inflation, and (3) smooth roll out of GST. India's Economic Affairs Secretary Subhash Chandra Garg called the rate cut an "important step" to ensure sustained growth for stable, moderate inflation.

"Many people in the advanced economies are saying we should have been at 4 per cent (inflation rate), and not be at 2 per cent, which was a mistake".

"Fair number of pieces of the jigsaw are already in place", he added.

Other News

Trending Now

Hero iPad steers Apple to surprisingly strong results
But more importantly, its forecast for the current September quarter - when the next, big iPhone launch is expected - is strong. Service revenues , which cover everything from the App Store to Apple Pay, reached a record $7.3 billion (up from $6 billion).

Samsung Galaxy Note 8 press render surfaces
And although the images don't say what's hiding inside, they tell us everything we need to know about the smartphone's exterior. Now, in the latest report , it appears Samsung's foldable smartphone , the Galaxy X, has received Bluetooth certification.

Dow tops 22000 as Apple rallies; euro strengthens
The euro, coming off its best month since March 2016, reached a new 2 1/2-year high against the ailing dollar. Automaker Ford (F.N) fell 2.41% and General Motors (GM.N) lost 3.39% after they reported lower monthly sales.

Pakistani lawmakers elect Shahid Khaqan Abbasi as interim prime minister
The Sharif name has already proven to be remarkably resilient. "Everybody wants the (prime minister's) chair". There was no immediate confirmation of when the vote would take place. "He'll step up to the plate".

Dujana, ruthless terrorist with a weakness for women
The protesters resorted to heavy stone-pelting on government forces who retaliated with teargas, pellets and also bullets. Dujana had been frequenting the house of his wife and was believed to have other women friends as well.

Tesla says Model S, Model X deliveries power quarterly revenue surge
With so much fanfare surrounding Tesla's long-awaited Model 3 launch, news of the company's solar roof has fallen by the wayside. Musk has said Tesla is earning good margins on the small number of Model S and Model X vehicles it has sold.

IL thrill rides to face tests for permits
Wristbands for fair rides that open Monday at 4 p.m. run $18 and a discounted $12 on Wednesday's family night. All the rides at the State Fair are thoroughly checked before they are made available to the visitors.

Breastfeeding can boost economies and save children's lives
During breastfeeding, antibodies and other germ-fighting factors pass from a mother to her baby and strengthen the immune system. By six months, only 34% of UK babies are receiving any breast milk, compared with 49% in the United States and 71% in Norway.

'Bachelorette Men Tell All': Kenny King's daughter steals the show
The insider said, "somehow, Rachel didn't manage to make the flight for some reason". " The Bachelorette " season 13 airs Mondays. Of the Bachelorettes , season one's Trista and Ryan Sutter are still together, even after her health scare earlier this summer.

Pioneering scientists edit genes in embryos to stop inherited diseases
That doesn't mean that we shouldn't have a public debate about the ethical implications - it is hugely important that we do . It is directed to a specific location in the DNA and performs a cut-and-paste function, not unlike word-processing software.