FLEXIBLE INFLATION TARGETING
RBI focus is on clarity in communication since it adopted flexible inflation targeting: Deputy governor Michael Patra
The Reserve Bank of India (RBI) is prioritizing clear communication in its monetary policy, aligning with global practices. While the RBI emphasizes transparency, it refrains from providing specific forward guidance on inflation. Research indicates that the RBI's communication tone significantly influences market expectations, particularly during periods of monetary policy tightening.
Fed governors stake out competing views of inflation risk
Federal Reserve Governors Michelle Bowman and Lisa Cook expressed differing views on future monetary policy. While Bowman urged caution due to persistent inflation, Cook expressed confidence in continued easing of price pressures. Their perspectives highlight the factors influencing the Fed's decision on a potential interest rate cut at its December meeting.
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.
Wholesale inflation quickens to 2.36% in October over rising food prices
India's wholesale price index rose to 2.36 percent in October. Food prices increased, pushing retail inflation to a 14-month high. The Reserve Bank of India held its benchmark interest rate steady. The central bank maintained its inflation forecast for the fiscal year at 4.5 percent. Food price volatility remains a concern for inflation and economic stability.
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No monetary policy overreaction, please
A new article argues that major economies overreacted with their monetary policies after the pandemic, negatively impacting emerging markets like India. While acknowledging the global inflation challenges, the author suggests that India's central bank skillfully managed the situation with a balanced approach, emphasizing the importance of data-driven decisions and clear communication for stable economic growth.
Inflation worries trump lone vote to boost growth, highlights RBI MPC's minutes
Nagesh Kumar advocated for a rate cut to revive demand and investment amid economic uncertainty during the early October MPC review. Despite Kumar's argument for normalization, five members, including RBI Governor Shaktikanta Das, voted to maintain the repo rate, citing inflation concerns.
India cannot risk another bout of inflation: RBI Governor Das
India's central bank, led by Governor Shaktikanta Das, opts for a flexible approach to monetary policy. The Reserve Bank of India maintains the benchmark interest rate at 6.5%, shifts its stance to 'neutral,' and prioritizes price stability amid inflation concerns and global uncertainties.
Inflation to align to the 4 percent target by FY'25-26: Michael Patra
Inflation is projected to align with the 4 percent target in the coming fiscal, according to Reserve Bank deputy governor Michael Patra. He mentioned climate change and digitisation as future challenges to monetary policy. Patra noted that inflation, which peaked at 7.8 percent in April 2022, is expected to average 4.5 percent in 2024-25.
Wholesale inflation quickens to 1.84% in September driven by food price surge
India's wholesale inflation rose to 1.84% in September from 1.31% in August, driven by changes in the Wholesale Price Index covering primary articles, fuel, and manufactured products. The RBI¡¯s MPC retained the repo rate and adjusted inflation projections, maintaining a neutral stance amidst varied inflation and growth trends.
Market expects RBI to kickstart easing with a shallow cut in December
The RBI has shifted to a 'neutral' policy stance, increasing expectations of a rate cut in December. Most financial institutions anticipate a 25 basis point cut. Market participants will closely monitor inflation and growth indicators. The RBI's decision provides flexibility for potential rate easing as inflation remains within legal limits.
Ghodey Pe Sawaar: RBI is in a long-term war
RBI inflation horse: India's central bank has shifted its stance to neutral, balancing inflation and growth. Governor Shaktikanta Das emphasized vigilance due to ongoing global risks. Despite some easing, inflation remains a significant challenge, influenced by geopolitical tensions and high food prices. The RBI remains focused on maintaining its targets.
RBI MPC: What mutual fund experts say on the rate pause?
RBI kept repo rate unchanged at 6.5%. Debt MFs may benefit, equity markets positive long term. Experts expect rate cut in next year.
RBI monetary policy pragmatic; should cut rate in coming months, say experts
The Reserve Bank of India has kept its key interest rate unchanged at 6.5% and shifted its policy stance to 'neutral'. This indicates a possible rate cut in the coming months. The decision aims to balance inflation control with sustained growth, while taking into account geo-political and economic factors.
RBI MPC shifts gear to 'neutral' while retaining repo rate at 6.5%; A look at inflation, GDP targets
Repo Rate: The RBI's Monetary Policy Committee maintained the repo rate at 6.5% due to robust domestic growth and concerns over inflation despite a slight dip in Q1 FY2025 growth. The stance shifted to 'neutral' focusing on growth, cautious of potential geopolitical risks impacting inflation.
ET Analysis: Leave the food inflation target index well alone
Governor Shaktikanta Das stressed not to modify the existing inflation targeting framework, which aims for a 4% inflation rate. He pointed out food inflation's significant role in the consumption basket and cautioned that ignoring it may risk the hard-won stability in price levels. The existing framework ensures the credibility of economic stability.
RBI can't ignore the costs of everyday items as PM Modi's economic adviser suggested
Food Inflation: India's chief economic adviser has suggested excluding volatile food prices from inflation targeting, sparking skepticism among economists. They argue it's impractical to ignore essential consumer costs. Food makes up half of India's consumer basket, impacting inflation. Experts advocate for revisiting CPI weights, improving food infrastructure, and maintaining a flexible inflation targeting regime. Some economists support the proposal, emphasizing the need for policy interventions to control food inflation and stimulate weak domestic demand.
Don't obsess on inflation targets
In my capacity, I stress the importance of preparing for the AI revolution and managing public funds wisely to navigate economic uncertainties. Governments must prioritize debt sustainability and structural reforms to ensure long-term prosperity and stability.
As India develops, problem of high food inflation will get less severe: RBI MPC member Ashima Goyal
Stressing that the share of food in the household budget is high in India, RBI Monetary Policy Committee (MPC) member Ashima Goyal said policy needs to focus on increasing agricultural productivity, since stable agricultural prices are important for non-inflationary growth.
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