RBI Monetary Policy LIVE UPDATES: Rupee surged, oil price softened but GDP growth slowed since last policy meet

RBI Monetary Policy LIVE UPDTAES: The RBI will hold its fourth monetary policy meet, in which it is expected to keep the repo rate unchanged.RBI Monetary Policy LIVE UPDATES: The RBI will hold its fourth monetary policy meet, in which it is expected to keep the repo rate unchanged.

RBI Monetary Policy December 2018 LIVE UPDATES: The Reserve Bank of India (RBI) is expected to keep the repo rate unchanged at 6.5% as inflation moderated, oil price came back $60 a barrel-level and rupee strengthened since the last monetary policy meet. It will, however, be interesting to see if the RBI changes its stance back to ‘neutral’ as inflation remained largely below the central bank’s forecast.

In the last MPC, the RBI’s decision to not hike the repo rate took everyone by surprise as the market was bracing for it as an intervention amid the rupee rout. RBI governor Urjit Patel defended the decision by saying that the central bank’s mandate is inflation targeting. He also said that the change in stance from ‘neutral’ to ‘calibrated tightening’ meant that the rate cut was off the table.

In October, the Reserve Bank of India (RBI) took a surprising decision of not hiking the repo rate from 6.5%, which spooked the market. Defending the decision, governor Urjit Patel said it at least thrice in the post-policy press conference that the mandate of the central bank is to target inflation.

The Reserve Bank of India will probably keep interest rates unchanged on Wednesday, with the decision itself likely to be a sideshow to Governor Urjit Patel’s press conference — his first since an acrimonious debate with the government over the central bank’s autonomy.

The rupee depreciated by 26 paise to 70.75 against the US dollar in early trade Wednesday ahead of RBI Monetary Policy meeting. Read Full story

Top economists Arvind Virmani, Surjit Bhalla, Indranil Sen Gupta, Charan Singh and others on Tuesday took part in Shadow Monetary Policy Meeting held by EGROW Foundation. The economists suggested the following:

  • Revise the stance from calibrated tightening to neutral
  • Reduce the Repo rate
  • Enhance liquidity in the economy
  • Consider reducing CRR
  • Revisit the concept and conditionality of PCA

Since the previous policy announcement, the rupee has appreciated against the US dollar and moved above the psychologically crucial mark of 70. Global crude oil prices too have softened significantly, slipping below USD 60 per barrel from USD 86.  India’s economic growth slowed to 7.1 per cent in the September quarter after peaking to an over two-year high in the first three months of this fiscal.

Sensex drops further ahead of RBI policy meet, cracks 260 points; Nifty slips below 10,800 Follow market LIVE blog

Inflation readings over the past few months have been undershooting RBI’s estimates by over 50 basis points, says Upasna Bhardwaj, economist, Kotak Mahindra Bank. Read full story

The central bank had held its October Monetary Policy Committee (MPC) meeting of FY19 against the backdrop of the sharp depreciation in the rupee, rising crude oil prices, intense pressure on current account deficit (CAD) and liquidity issues.

Source: Financial Express