BANK RESERVE RATES
Rupee drops to all-time low on India growth worries, dollar strength
The Indian rupee hit a lifetime low of 84.7425 against the dollar on Tuesday amid concerns over India's slowing growth and the U.S. dollar's rally. The rupee's decline, influenced by weak GDP data and reduced foreign exchange reserves, raises concerns about continued economic challenges and investor sentiment.
Rupee remains one of the best-performing Asian currencies: MoS Finance
The Indian Rupee remains strong among Asian currencies despite facing depreciation pressures due to a stronger US Dollar and geopolitical tensions. This stability reflects India's resilient economic fundamentals. The Reserve Bank of India monitors global developments and intervenes to ensure orderly market function. FDI inflows have seen a decline from $43 billion in 2019-20 to $10.1 billion in 2023-24.
India 10-year bond yield hits 2-month low on growing policy easing bets
Indian government bond yields are dipping due to weaker-than-expected economic growth data. The 10-year yield fell to 6.7090%. The Reserve Bank of India is expected to make a monetary policy decision this week, with some anticipating a rate cut. India's economic growth slowed significantly in the third quarter, which has influenced these financial movements.
Dollar faces crunch week for US rates, yen holds gains
The currency market showed caution as the dollar started the week modestly. Key events like the upcoming U.S. rate cuts, the Bank of Japan's potential rate hike, and the European Central Bank's expected rate cut will shape market trends. U.S. payroll data and speeches by Fed officials are crucial, while political uncertainties in France add to the market's concerns.
Rate cut is unlikely but RBI may signal it's ready to act
The Reserve Bank of India's Monetary Policy Committee is expected to focus on faltering economic growth rather than inflation during its December 4-6 meeting. Despite calls for lower interest rates, the RBI's commitment to controlling inflation and promoting financial stability may prevent a rate cut, even as growth targets face challenges.
Growth seen at 6.1-6.8% for FY25 on 7-quarter Q2 low
India's economic growth forecasts for fiscal year 2025 have been cut by economists due to a slowdown in expansion. GDP is expected to grow 6.1-6.8%, down from an earlier forecast of 7.2%. Key factors include low consumption, weak investment demand, and reduced urban wage growth. Government spending and healthier agricultural production may support growth in the second half.
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RBI may continue status quo on interest rate, moderate GDP growth forecast: Experts
The RBI is expected to maintain the current benchmark interest rate due to high inflation exceeding the set limit. This decision will be announced on December 6, 2024. Experts believe rate cuts may only be possible in February if inflation decreases. Growth forecasts may also be revised due to disappointing GDP figures.
Time to cut interest rate to spur GDP growth, says economist Charan Singh
Charan Singh, CEO of EGROW Foundation, expressed disappointment in India's second-quarter GDP growth of 5.4%, urging faster corrective measures and interest rate reductions. He emphasized India's higher growth potential, suggested the inflation target be between 2-6%, and encouraged private sector involvement to boost economic growth, highlighting the government's role as a visionary for the next 25 years.
Yen hits six-week high, dollar dips for month-end
The yen surged to a six-week high against the dollar as faster-than-expected inflation in Tokyo fueled speculation of a Bank of Japan interest rate hike. The dollar fell 1.27% against the yen and is on track for a significant weekly loss. The euro gained slightly, while Bitcoin climbed 2.39%, inching closer to its record high.
Cost of fresh rupee loans rises 17 basis points in October
In October, fresh rupee loans disbursed by scheduled commercial banks became costlier, with the weighted average lending rate rising to 9.54%, up by 17 basis points from September. However, the cost of fresh deposits decreased to 6.44%. The lending rate on outstanding rupee loans stayed at 9.90%.
China Central Bank injects $111 billion liquidity as bond supply surges
China has increased its cash injection into the banking system to ensure sufficient liquidity amid a rise in local government bond sales. The People's Bank of China conducted 800 billion yuan of reverse repurchase agreements in November, expanding efforts to ease funding pressure and avoid a liquidity squeeze as banks absorb higher debt supply.
Rupee pinned near record low but supported by likely cenbank intervention
The Indian rupee remains flat near its all-time low due to foreign portfolio outflows. The Reserve Bank of India's interventions have limited the currency's losses. Foreign investors sold $1.4 billion of local stocks on Thursday. The rupee has weakened by 0.5% in November but outperformed most Asian peers which declined by as much as 2%.
Rupee flat, wedged between month-end dollar bids and likely RBI intervention
The Indian rupee held steady against the US dollar. RBI intervention likely supported the currency. Importers and foreign banks sought dollars. The rupee traded near the 84.50 level. Asian currencies saw mixed performance. The US dollar index recovered slightly. Forward premiums for dollar-rupee rose. US bond yields declined. The RBI is expected to hold interest rates next week.
Euro jump, rising yen put brakes on the dollar
The euro surged to a four-month high following hawkish comments from an ECB policymaker, while the yen strengthened on rate hike bets. The dollar retreated ahead of the U.S. Thanksgiving holiday. Meanwhile, the Brazilian real plummeted to a record low on tax cut concerns.
US weekly jobless claims decline further
New U.S. jobless claims fell last week, but persistent long-term unemployment could prompt another Federal Reserve interest rate cut in December. The Fed is weighing further cuts amid slowing disinflation, with the November jobs report crucial for their decision.
High cost deposits up to 69 percent in September
Indian banks saw a rise in high-cost deposits in the September quarter. This may squeeze profit margins. Public sector banks lent more but gathered fewer deposits than private banks. Term deposits grew faster than savings accounts. Loans to private companies and working capital loans also increased. The share of loans to women borrowers continued to rise.
Rate cuts likely to optimise home affordability in next 12 months, Kolkata most affordable: Report
A JLL India study projects improved housing affordability in India by 2025, driven by potential interest rate cuts. Mumbai and Pune are expected to reach near-peak affordability, while Kolkata will likely remain the most affordable. Sales are predicted to continue rising, reaching new highs by 2025, despite affordability challenges in Delhi NCR and Bengaluru.
S&P keeps India's FY25 growth forecast at 6.8%
S&P Global Ratings maintains India's FY25 GDP growth forecast at 6.8% but lowers projections for FY26 and FY27 to 6.7% and 6.8%, respectively. High interest rates and reduced fiscal support are expected to dampen urban demand. While PMIs signal expansion, recent indicators suggest softening growth due to a construction sector downturn.
Will Elon Musk's DOGE abolish the Federal Reserve? Here are the devastating consequences if he does that
Tesla CEO Elon Musk has recently indicated that he has certain plans of abolishing the Federal Reserve altogether and his DOGE is already working on it. Eminent personalities have already shown concerns regarding this move and exclaimed that this move might end up having some devastating consequences.
Microfinance sector tightens lending norms to address asset quality stress
The Microfinance Institutions Network (MFIN) is tightening lending norms for its members to address rising bad loans. These changes include stricter limits on lending to overdue borrowers, reducing the number of lenders per borrower, and capping total indebtedness, including unsecured retail loans. These measures aim to improve the sector's resilience and financial inclusion efforts, taking effect January 2025.
S&P cuts India's growth targets for the next two fiscal years
S&P affirms India's FY25 GDP growth at 6.8%. Growth forecasts for FY26 and FY27 are lowered to 6.7% and 6.8%, respectively. High interest rates and lower fiscal impulse are cited as factors. RBI believes recent economic weakness is temporary. Private consumption and festival spending are driving demand. Food inflation remains a concern, potentially delaying RBI rate cuts.
Fed rate cuts triumph over Trump¡¯s economic policies: A defining market battle
The Federal Reserve's rate cuts are poised to shape the U.S. and global economies, potentially overshadowing the impact of Donald Trump's economic policies. Despite short-term market fluctuations, the Fed's focus on stability and addressing fiscal challenges is expected to have a more lasting influence on markets, including the USD/INR, EUR/USD, and GBP/USD.
Rupee weakens to record low pressured by foreign portfolio outflows
The Indian rupee plummeted to a historic low against the US dollar due to a mass exodus of foreign investments from the Indian stock market. This decline was fueled by a steep drop in Adani group shares following allegations of a bribery scheme and uncertainty surrounding the Federal Reserve's interest rate policy.
RBI wary of more than just food inflation: What else is a headache for Das & Co
The Reserve Bank of India is concerned about rising core inflation. Core inflation, excluding volatile items, rose to 3.8 percent in October. The central bank says rising costs are impacting consumers and businesses. The RBI's Monetary Policy Committee may consider this trend in its December meeting. The government is urging the RBI to cut interest rates to boost the economy.
Delhi versus Mumbai: How the interest rate battle is playing out
The Reserve Bank of India (RBI) has opted to maintain its key lending rate at 6.5%, marking the tenth consecutive time it has chosen not to adjust rates. This decision comes amid a backdrop of government officials advocating for rate cuts to stimulate economic growth, while the RBI prioritizes controlling inflation, which recently reached a 14-month high.
Dollar sitting pretty, yen bears wary of BOJ hawks
The dollar's value surged due to high U.S. Treasury yields and expectations of fewer interest rate cuts, making it more appealing to investors. However, concerns about potential intervention by Japanese authorities to support the weakening yen caused the dollar to retreat against it.
Shaktikanta Das to stay or leave RBI? His future and your wallets are connected
RBI Moetary Policy: The contract of Reserve Bank of India Governor Shaktikanta Das ends on December 10. The government has not announced whether Das will receive an extension. Economists are considering the impact of Das's potential departure on interest rate decisions. Some economists believe Das will receive an extension due to his handling of the economy during challenging times.
Credit deposit growth rate converging
The gap between credit and deposit growth is shrinking as both are seeing slower growth compared to last year. While credit growth is moderating due to factors like the HDFC merger and RBI measures, deposit growth is facing challenges from attractive alternative investments.
Easy with the loan tap for banks, RBI
India's banking regulator is celebrating the success of its efforts to slow loan growth, but businesses are feeling the pinch. While slower growth helps ensure financial stability, it also makes it harder for businesses to get the funding they need to grow. The Reserve Bank of India is walking a tightrope, trying to balance these competing priorities.
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