INDIA RATE CUT
RBI has a 3 body problem, CRR cut may be first painkiller in its prescription
India's Q2 real GDP growth slowed to 5.4%, the weakest in seven quarters, creating a dilemma for the Reserve Bank of India (RBI). As the Monetary Policy Committee (MPC) meets from December 4-6, it may shift focus from inflation management to supporting growth. Experts suggest RBI Governor Shaktikanta Das may cut the cash reserve ratio (CRR) before reducing interest rates in February.
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.
The game needs to change for world¡¯s fifth-largest economy after poor Q2 show
India's economy experienced its slowest growth in nearly two years during the July-to-September quarter, with GDP growing at just 5.4%. Declining wages, falling company profits, high inflation, and stagnant interest rates all contributed to the slowdown, challenging Prime Minister Narendra Modi's economic targets.
Stars are aligning for Indian bonds to extend rally into 2025
Indian bonds are experiencing their best year in four, driven by anticipated central bank rate cuts, robust foreign inflows from index inclusion, and strong domestic demand from pension and insurance companies. Despite challenges from a stronger dollar and higher US Treasury yields, the 10-year bond yield is projected to fall further.
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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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.
Forecasting is a really difficult business. GDP data proves it yet again
India's Q2FY25 GDP growth slowed to 5.4%, lower than expected. This highlights the unpredictability of future events, even for experts. Investors should be cautious of trend extensions and avoid blindly following predictions. Instead, focus on fundamental analysis and continuous updates of forecasts. Remember, all returns are made in the future, and making accurate forecasts is key to successful investing.
RBI to keep repo rate unchanged at meeting next week, chances of rate cut in Feb increased: Report
The Reserve Bank of India is likely to maintain its current policy rate in its upcoming meeting, despite significant GDP growth slowdown in Q2 FY25. However, a rate cut in February appears more probable following weaker-than-expected economic data. The RBI continues a wait-and-watch approach.
Q2 growth shocker puts pressure on RBI to cut rates
India's economy grew at 5.4% in the three months to September, the slowest pace in almost two years. This lag affects Prime Minister Modi's growth plans and may prompt the Reserve Bank to consider cutting interest rates. Economists expect stronger growth in the second half with government spending and rising rural consumption.
NBFCs growth to remain under pressure amid loan disbursement slowdown, tighter regulations: Report
The growth of non-banking financial companies (NBFCs) in India is expected to remain under pressure in the financial year 2025 due to a slowdown in loan disbursements and regulatory challenges, according to a report by Nomura.
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 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.
Stable inflation is important to sustain growth: RBI Guv Das
RBI Governor Shaktikanta Das reaffirmed the central bank's commitment to achieving the 4% inflation target, effectively ruling out immediate rate cuts. His comments come amidst calls for rate reductions from government officials. While acknowledging the need for growth, Das emphasized price stability as crucial for sustainable economic progress, particularly for the Global South.
RBI purchases $9.6 billion in September to curb rupee's appreciation amid Fed rate cut buzz
The Reserve Bank of India (RBI) purchased a significant $9.6 billion in September to curb the rupee's appreciation amid strong foreign investment inflows. This intervention, aimed at managing volatility, has led to the rupee being overvalued compared to its trading partners, potentially impacting export competitiveness despite recent export growth.
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.
Food price exclusion from inflation targets a flawed strategy? The heated debate in India
India's retail inflation hit a 14-month high in October, sparking debate about the country's inflation targeting framework. While some officials call for excluding volatile food prices from interest rate decisions, others emphasise the significant impact of food inflation on household budgets and overall price stability.
Morgan Stanley lowers India's growth aim for FY25; economy may expect a better Q3 show with wedding season
Morgan Stanley has revised India's FY25 growth forecast to 6.7%, down from 7%, citing weaker-than-expected second-quarter data. Despite the downgrade, the firm anticipates a rebound in the second half, fueled by government spending and improved agricultural output. Inflation is expected to moderate, prompting potential rate cuts by the Reserve Bank of India in April.
Market Wrap: IT stocks drag down Sensex, Nifty on Powell's rate comments
Indian stock markets closed lower on Monday, dragged down by IT stocks after Federal Reserve Chair Jerome Powell hinted at delayed interest rate cuts due to strong U.S. economic growth. The Sensex fell 241 points, while the Nifty slid 79 points. Tech companies like TCS and Infosys were among the top losers.
Short-term selling in India presents buy opportunities: Stefan Hofer
With Donald Trump coming in, I cannot overemphasise how much change is going to happen. Republicans retain their hold of the House, clinching full control of Congress.
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.
RBI should definitely cut interest rates, says Commerce Minister Piyush Goyal
Commerce Minister Piyush Goyal called for the Reserve Bank of India (RBI) to cut interest rates, arguing that food inflation should not be the sole factor in such decisions. He expressed his personal view, noting that inflation is expected to decline by December. Goyal also urged investors to take a long-term perspective, following recent Foreign Institutional Investor (FII) selling trends.
RBI may defer rate cut call to February as inflation's still hot
Economists predict that the Reserve Bank of India may postpone a rate cut until February. This delay is attributed to concerns about rising inflation and global market instability. The central bank is closely monitoring food inflation, particularly in edible oils and vegetables. Despite these concerns, some analysts anticipate a rate cut in December, citing slowing economic growth.
Rate cut or pricier deposits, SBI can protect NIM: Setty
State Bank of India (SBI) Chairman, CS Setty, told analysts that the bank has a 35-basis-point cushion on its lending rate, providing flexibility even if deposit rates increase. Despite potential RBI rate cuts impacting lending rates, Setty believes SBI's margins will remain stable due to a significant portion of loans linked to MCLR and adjustments in pricing for short-term loans.
Hopes of deep Fed rate cuts fading. What it means for Sensex, Nifty
The US Federal Reserve cut interest rates by 0.25%, as anticipated, while keeping an eye on the potential effects of a Trump presidency. The move prompted a relief rally in bonds and a decline in the US dollar. Analysts predict that Trump's policies will likely increase inflation, potentially leading to a slower pace of rate cuts in the future.
Rupee falls 5 paise to all-time low of 84.37 against US dollar in early trade
The Indian rupee hit a new all-time low against the US dollar due to foreign fund outflows and weak domestic equities. The US Fed's recent interest rate cut and potential future cuts are influencing the rupee's trajectory. Despite market volatility, experts predict the RBI will maintain a controlled range for the rupee against the dollar.
Muthoot Microfin to again cut lending rates, maintain NIM at 12.75-13.00%
Muthoot Microfin is lowering its lending rates for the third time this year, benefiting borrowers with a quarter-percentage point reduction. This move follows RBI's scrutiny of microfinance lenders charging high interest rates. Despite the reduction, Muthoot Microfin's net interest margin improved due to lower funding costs, reaching 12.94% in the first half of the year.
RBI rate cut on cards? The inflation 'horse' is still a concern for Shaktikanta Das
RBI Governor Shaktikanta Das cautioned against interpreting the recent shift to a neutral monetary policy stance as a signal for imminent rate cuts. Despite speculation, Das emphasized that reducing interest rates now would be risky given the "significant upside risks to inflation.
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