RBI Monetary Policy Committee to announce interest rate decision today. Check out the latest news, developments, and analysis!
Aurodeep Nandi, India Economist & Vice President, Nomura on RBI Policy
The RBI’s 50bp hike was largely in line with market expectations, that was divided between it and a 35bp hike. Very importantly, with the RBI retaining the policy stance of “withdrawal of accommodation”, the implicit message is that rates are yet to reach neutral territory, and that more rate hikes are warranted – a view that we agree with. The RBI continues to signal that all options are on the table, which is a prudent strategy given the elevated levels of uncertainties on both, growth as well as inflation.
NTPC declares complete commissioning of 296 MW Fatehgarh Solar
PV Project
NTPC has successfully completed the commissioning of fifth part capacity of 48.8 MW out of 296 MW Fatehgarh Solar PV Project at Jaisalmer, Rajasthan. The commercial Operations of the fifth part commenced on August 5. Now, full capacity of 296 MW has been commissioned. With this, standalone installed and commercial capacity of NTPC has become 54818 MW, while group installed and commercial capacity of NTPC has become 69183 MW.
Anuj Puri, Chairman – ANAROCK Group
A rate hike was expected, but the expectation was for a maximum of 35 bps. The hike by 50 bps is definitely on the higher side, and home loan lending rates will now edge further into the red zone.
This is the third consecutive rate hike in the last two months and finally marks the end of the all-time best low-interest rates regime – one of the major factors that drove housing sales across the country since the pandemic. This whammy comes along with the inflationary trends of primary raw materials, including cement, steel, labour, etc., that have recently led to a rise in property prices. Together, these factors – rising home loan rates and construction costs – will impact residential sales that did reasonably well in the first half of 2022. As per ANAROCK Research, approx. 1.85 lakh units were sold in H1 2022 across the top 7 cities.
The repo rate now stands at 5.4%, thus reaching the pre-pandemic levels. While inflation has partially eased as compared to the surge in April, it continues to be above the RBI’s target.
Market update at 11.00 AM
Benchmark indices continue to trade higher with Sensex up 247.42 points or 0.42% at 58546.22, and the Nifty was up 62.45 points or 0.36% at 17444.45.Source : BSE
Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank on RBI Monetary Policy
The MPC decisions have been in line with our expectations. Given the increasing external sector imbalances and global uncertainties the need for front loaded action was imperative. We continue to see 5.75% repo rate by Dec 2022.
RBI retains the real GDP growth projection for 2022-23 at 7.2 per cent
The real GDP growth projection for 2022-23 is retained at 7.2 per cent, with Q1 at 16.2 per cent; Q2 at 6.2 per cent; Q3 at 4.1 per cent; and Q4
at 4.0 per cent, and risks broadly balanced. RBI projects the real GDP growth for Q1FY24 at 6.7 per cent.
Benchmark 10-year government bond yield jumped 10 basis points to 7.25%
Benchmark 10-year government bond yield jumped 10 basis points to 7.25% as RBI Governor Shaktikanta Das said further withdrawal of monetary accommodation is warranted due to elevated inflation. The more-than-priced in 50 basis point hike in repo rate too dampened sentiment.
#RBIPolicy | India has witnessed portfolio outflows of $13.3 bn in FY23 so far (till August 3). Debt service ratio declined from 8% in March 2021 to 5.2% in March 2022, says @RBI Governor, @DasShaktikanta #RBI #CreditPolicy #MPC pic.twitter.com/5jv4TdeBI9
— CNBC-TV18 (@CNBCTV18Live) August 5, 2022
Easy Trip in pact with SpiceJet to sell air tickets in Thailand:
RBI MPC hikes repo rate by 50 bps:
India’s rate-setting panel on Friday hiked the key lending rate, the repo rate, by 50 basis points (bps), taking the policy rate back to the late-2019 levels. One bps is one-hundredth of a percentage point. With the latest hike from the six-member Monetary Policy Committee (MPC), the repo rate now stands at 5.4 percent. Repo is the rate at which the central bank lends short-term funds to banks. Changes in this rate typically gets transmitted to the broader banking system.
Most economists had predicted a 25-50 bps rate hike in the backdrop of a consistently high retail inflation that is hurting the common man. Already, the MPC had hiked the repo rate by 90 bps so far in this rate cycle.
Market update at 10 AM: Benchmark indices continues trading in the green with Sensex up 255.48 points or 0.44% at 58554.28, and the Nifty adding 69.50 points or 0.40% at 17451.50.
