0

0

0

0

0

0

0

0

0

RBI policy highlights: Enough liquidity will be made available to support growth, financial markets, says Guv Shaktikanta Das

Mini

RBI Monetary Policy LIVE Updates: The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) kept the repo rate unchanged in the fourth bi-monthly policy meet for the financial year 2021-22, governor Shaktikanta Das said on Friday. The MPC voted unanimously to keep policy rates unchanged while it voted 5:1 to maintain an 'accommodative' stance .With no change this time as well, the repo rate currently stands at 4 percent. The reverse repo rate has been maintained at 3.35 percent.Catch all RBI policy-related updates here:

RBI policy highlights: Enough liquidity will be made available to support growth, financial markets, says Guv Shaktikanta Das
  • Thank you, readers! That's all from CNBC-TV18.com's live coverage on RBI policy on October 8. Stay tuned for other updates on our website: CNBCTV18.com.

    You can follow us on Twitter: @CNBCTV18Live @CNBCTV18News

    And on FacebookLinkedInInstagram and Telegram

    Download our mobile app for Android and iOS platforms

  • Raghvendra Nath, Managing Director, Ladderup Wealth Management on RBI policy

    “On expected lines, RBI has kept the policy rates unchanged and has maintained its accommodative stance. The key drivers behind the policy review announcement today have been controlled CPI inflation, which RBI expects shall moderate in the coming quarters, and the RBI’s support to the Economic recovery. The RBI continues to maintain high liquidity in the banking system which has helped in keeping interest rates at moderate levels across all categories of lending. We are already seeing the benefits of low interest rates, in housing demand; in retail credit growth and thereby consumption as well as in improved profitability of corporates. We also expect that interest rates shall remain unchanged for the next 3 to 6 months as Economic growth shall continue to dominate the policy objectives. From Equity markets standpoint, it spells quite well as pick up in aggregate demand shall lead to better corporate profitability. Fixed income investors, however, have to tone down their expectations of returns as interest rates may continue to remain low for the foreseeable future.”

  •  Nutan Gaba - Chief Financial Officer - HomeFirst Finance on RBI's announcement
    -

    "As expected, RBI continued its status quo on the policy rates with an accommodative stance. Given the normal monsoon season and resulting in robust production, Inflation is likely to remain steady. This also would mean that low-interest rates, as well as liquidity support. The policy also highlighted liquidity support to MSMEs as well as sectors affected by the pandemic. This is positive for the affordable housing customers and will support home buying aspirations across segments."

  • Rajeev Radhakrishnan, CIO - Fixed Income, SBI Mutual Fund on RBI's announcements


    "Given the recent RBI market actions, the outcome of the Policy was along expected lines with the central bank continuing its hesitant steps towards normalization of liquidity. In this endeavour the GSAP auction as expected was the first casualty with the RBI not announcing any incremental GSAP. At the same time, the Governor’s statement attempted to soothe markets by not projecting any of these measures as unwinding of accommodation and promising measures such as OMO/Twist/GSAP If market conditions warrant. While additional measures to absorb liquidity under 14D VRRR have been announced along with additional 28D VRRR as and when required, the measures taken currently do not address a durable absorption of the quantum of surplus liquidity. In the absence of durable absorption, it is unlikely that the short end rates would directionally  move closer to the policy rates. Market direction is expected to remain volatile as the overhang of additional measures would remain. Even as the near term domestic CPI prints may provide some relief, external factors such as commodity prices and unwinding of monetary accommodation globally could counter balance that."

  • Rohit Poddar, Managing Director, Poddar Housing and Development Ltd on RBI's MPC announcement

    “The RBI’s decision to maintain the repo rate unchanged at 4%, point towards the road to economic recovery. It is good to see that overall economic activity in the country has evolved and inflation has remained lower than the anticipated numbers.  Expected gradual improvement in the domestic conditions and the successful drive of vaccination campaign will boost consumer sentiments and improvise aggregate demand in the country. We are evidently in a much better place compared to the last year owing to the proactive measures taken by the government which is resulting into achieving stability in the economic fundamentals of the country. Furthermore, this will positively impact the housing sales in the upcoming festive season and the RBI is confident of enabling economic growth with the measures taken.”

  • Ashwani Bhatia, Managing Director at State Bank of India (SBI) on RBI policy announcements

    "The rates to my mind appeared to have bottomed out but the good part about the policy is it is extremely balanced, no surprises. The fact that they have announced the calendar also gives you some path about what they are thinking for the next two-three months. So with the calendar till December is welcome. It would give you some hint that perhaps they are looking to taper down on the liquidity but by and large very accommodative. It is a stance that was maintained, no hawkishness and I love the fact that he governor talked about the boat just coming to the shores but there is a journey beyond the shore also. I would be very positive as far as this policy is concerned, no surprises, inflation under control, wonderful measures and he is still giving growth the chance"

  • Shaktikanta Das, RBI Gov: MPC remains watchful of inflation; endeavour is to go close to 4% CPI mark

    Key points

    Growth has revived in certain segments 

    Still slack in growth, still have an output gap

    Watching out for growth signs to become entrenched 

    Let there not be any doubt about RBI's commitment to inflation

    Extraordinary situation last year needed unconventional measures 

    We don't want to rock the boat when we have reached the shores

    Conscious of our commitment to growth, and of our role as an inflation targeting mandate 

  • Upasna Bhardwaj, Senior Economist at Kotak Mahindra Bank:-
    "The MPC outcome of status quo on rates and stance was overall in line with expectations. RBI revised projections of CPI inflation are now in sync with our expectations. Going ahead we expect RBI to continue to tweak liquidity gradually through higher quantum and tenure of VRRRs. The December policy should set the tone for the reverse rate hike to begin the normalization of the policy corridor".

  • Michael Patra, RBI DG

    Will wait to see recovery getting strongly entrenched
    RBI has all the adequate instruments; issue is of timing and calibration

  • Shaktikanta Das, RBI Gov: Govt is discussing with authorities, index providers to clarify issues on global bond inclusion
    Talks in advance stage; hopeful global bond index inclusion should happen in the next few months

  • Rajeshwar Rao, RBI DG: Key points

    We have addressed the issue of climate risk internally
    We are joining various working group set up under NGFS
    NGFS is Network of Central Banks and Supervisors for Greening the Financial System

  • Don't want to rock the boat when shore is near, says Guv Shaktikanta Das
    RBI governor Shaktikanta Das said our crisis measures need to be in sync with macroeconomic development. But this syncing process will be "gradual, calibrated, and non-disruptive."
    RBI policy highlights: Enough liquidity will be made available to support growth, financial markets, says Guv Shaktikanta Das
  • MK Jain, RBI DG:
    Banks have resilient capital & liquidity buffers
    We have seen that stress remains moderate among banks
    RBI constantly engaged with banks on any stress build-up

  • Shaktikanta Das: Laid out roadmap to absorb Rs 6 trillion of liquidity by December

    There is no sudden intervention; overall approach is one of gradualism 

    Have laid out a roadmap to absorb Rs 6 lk cr of liquidity by December 

  • RBI Governor Shaktikanta Das briefs the media; says we don't imitate what other central banks are doing

    Key points:

    At the moment, GSAP is not required
    Going forward GSAP, Op Twist, OMOs are on the table if needed
    Total quantum under the fixed rate Reverse Repo window is about Rs 4-4.5 trn
    Quantum expected under the fixed rate Reverse Repo by Dec is Rs 2-3 trn

  • Shaktikanta Das, RBI Governor 

    We analyse the overall global and domestic situation

    Overall policy cannot be linked to only one-set of factors like stock or asset prices

    Have said enough liquidity will be made available to support growth, financial markets

    Studied growth and inflation factors, taken policy call based on those

  • Jimeet Modi, Founder and CEO Samco Group: The RBI has been a juggler of many balls in the past year and till now, never have they once faltered on any front. In fact they have managed to hold fort despite the pandemic. For the eighth consecutive time, the MPC has stuck to its accommodative stance and maintained a balanced policy with no change in repo or reverse repo rate. The Committee has derived comfort from the declining inflationary tendencies and have lowered the inflation forecast for FY22 from 5.7% earlier to 5.3% now. It seems their strategy going forward is a classic textbook one with liquidity management, the first check on their agenda, followed by a hike in reverse repo. The liquidity VRRR auction calendar till December is a welcome move which definitely gives further clarity on the liquidity tapering front. If the Fed’s stance in Nov goes as expected, then December could be the time the RBI finally begins to reduce the gap between the repo and reverse repo rates. In sum and substance, this times policy didn’t throw any curveballs, hence was well received by the market.

  • Anand Bagri, Head - Domestic Markets of RBL Bank: "Markets was expecting RBI to be much hawkish. I think the RBI has done a very good job in preparing the markets about the eventual normalization of the policy that would happen. So the liquidity as we move towards the December policy, I think the call fixing, the overnight rates would move closer to 375- 380 levels which are hovering around 350-360 levels now. So we are expecting maybe a 15 basis point reverse repo hike in the December policy. With further taking away of liquidity between the December to February quarter, we would possibly see that the call fixing is closer towards the repo rate. So possibly a stage would be set for a reverse repo hike in the February policy."

  • Surendra Hiranandani, Chairman and Managing Director, House of Hiranandani: "RBI’s decision to continue with the accommodative stance by keeping the interest rates unchanged is a welcome move for the sector. The decision will induce optimism, encourage buyers’ confidence and propel pent-up housing demand. The pandemic has reinstated the importance of homeownership. Low interest rates amidst the festive season, positive market sentiment and receding Covid-19 cases, together create a favorable condition for home-buying. To benefit from one of the best home-buying periods, homebuyers must immediately translate their plans into action and avoid prolonging them further."

  • View on Monetary Policy by Upasna Bhardwaj, Senior Economist at Kotak Mahindra Bank:
     "The MPC outcome of status quo on rates and stance was overall in line with expectations. RBI revised projections of CPI inflation are now in sync with our expectations. Going ahead we expect RBI to continue to tweak liquidity gradually through higher quantum and tenure of VRRRs. The December policy should set the tone for the reverse rate hike to begin the normalization of the policy corridor".

  • RBI Monetary Policy: Here's full text of Governor Shaktikanta Das' speech
    RBI Governor Shaktikanta Das on Friday announced various monetary policy measures. However, the apex bank has kept key policy rates, including repo rate and reverse repo rates, unchanged.
    RBI policy highlights: Enough liquidity will be made available to support growth, financial markets, says Guv Shaktikanta Das
  • Santosh Meena, Head of Research, Swastika Investmart Ltd.
    "The credit policy is neutral to positive for the market as the market was already expecting that interest will remain unchanged but the market is cheering on fact that there is no change in stance while ending GSAP is a little negative surprise but the governor's comment that he is ready to resume GSAP if there will be a requirement. The governor is confident about growth and didn't show much worry about inflation therefore the market is witnessing a bullish momentum post policy. I believe this event will have a few hours effect on the market however market will focus on global cues. We are outperforming despite a rise in US bond yields, the dollar index, and Crude oil prices. Bank Nifty is showing bullish momentum post the policy but it has a critical supply zone in the 38000-38300 area and if it manages to take out this zone then we can expect a short-covering rally towards the 39000 level otherwise it may see selling pressure where 20-DMA of 37500 will be immediate support."

  • Anuj Puri, Chairman - ANAROCK Group:
    As expected, RBI maintained the monetary policy pause, keeping the repo rate unchanged at 4% and reverse repo rate at 3.35%. In short for homebuyers, the low home loan interest rates regime will continue in the market and help foster housing demand during the ongoing festive season. Notably, this is a period when housing sales usually surge on the back of attractive offers by developers and lending banks. The green shoots of economic revival coupled with the prevailing low interest rates will be conducive for the residential sector in the short to mid-term. ANAROCK Research indicates that we may see at least 10-15% growth in housing demand in the ongoing. festive period (Oct.-Dec) across the top 7 cities against the preceding quarter. In Q3 2021, the top 7 cities saw total housing sales of nearly 62,800 units – already the best quarterly sales since the pandemic. If ANAROCK's predictions are accurate, the ongoing festive quarter will see at least a 35-40% yearly rise in overall housing sales across the top 7 cities as against the same period in 2020. In Q4 2020, the top 7 cities saw total housing sales of nearly 50,900 units.

  • Suvodeep Rakshit, Senior Economist, Kotak Institutional Equities: "The RBI policy, as expected, remained cautious and in a wait-and-watch mode. Even as it increased the quantum under the 14-day VRRR auctions and opened the option of 28-day VRRR auctions, it adequately sounded out on its dovishness and the need to ensure liquidity conditions remain comfortable. We do not see the RBI in a hurry to normalise liquidity conditions as well as the reverse repo rate in the near term. We continue to see February policy as the earliest period of review for  the RBI to narrow the policy rate corridor by raising the reverse repo rate."

  • RBI policy reaction: Lincoln Bennet Rodrigues, Chairman & Founder, The Bennet and Bernard Company, known for luxury holiday homes in Goa

    "RBI maintaining status quo on key policy rates was expected given the inflationary concerns in recent months and also maintaining financial stability and boost demand during the ongoing festive season. Residential demand is reviving in the pandemic context and this needs to be fostered. We have already seen early signs of improvement in economic activity following the easing of restrictions post the peaking of the second wave. Given the upcoming festive season, which is considered auspicious by a large number of Indians to make big-ticket purchases, the timing of a reduction in interest rate by banks recently couldn't have been better and will lead to a substantial increase in sales. The low-interest rate regime is going to be a game-changer for the whole real estate sector especially at a time when the economy is on a recovery trail. For any investor, it’s a time of great opportunity and for the end-customer, it’s a good time to buy. While the impact of Covid 19 has been high on specific segments, the luxury and second home sentiment has not been impacted as much. We hope that the government continues to pay attention to the requirements of the sector, which is one of the largest employers in the country. We would also like to see measures to enhance demand in the real estate sector by lowering of stamp duty and registration charges in the near future. The sector is set to become a large driver of the economy with its contribution to GDP projected to increase from the current 7 percent to 13 percent by 2025. Overall, we hope the government takes measures which strengthen the real estate sector and affirms robust infrastructure growth."

  • RBI increases IMPS limit to Rs 5 lakh from Rs 2 lakh
    The Reserve Bank of India on Friday increased the daily limit of immediate payment service (IMPS) to Rs 5 lakh from current Rs 2 lakh. Introduced in 2010, IMPS is a 24X7 service to transfer money real-time. It allows transferring of funds instantly within banks across India, which is not only safe but also economical.

  • Reactions on MPC decision

    Anand Nevatia, Fund Manager-TRUST Mutual Fund: "A 5-1 vote on stance clearly reflects that majority of MPC still comfortable and convinced with accommodative stance. A “favourable than anticipated” inflation trajectory and downward revision of CPI at 5.30% has allayed any fears of near term rate hikes. The Governor has assured the markets of ample liquidity while announcing higher VRRRs to absorb the excessive systemic liquidity. The absence of GSAP has impacted markets negatively especially at the longer end of the curve. The CPI readings will be low for the next couple of months. Inflationary expectations could lead to the underperformance of longer maturity bonds. Easy liquidity will support the performance of funds up to maturity of 3 years.”

  • RBI extends special 3-year LTRO of Rs 10,000 cr for SFBs till December 31
    The special 3-year long-term repo operation (LTRO) of Rs 10,000 crore for small finance banks (SFBs) has been extended till December 31 and made available on-tap, Reserve Bank of India (RBI) governor Shaktikanta Das said on Friday. READ MORE

  • RBI to discontinue GSAP, but stands ready with instruments like operation twist
    The Reserve Bank of India (RBI) on Friday said that the need for undertaking further G-SAP operations does not arise. The central bank, however, said it stands ready with instruments like operation twist. RBI further proposed to take 14-day VRRR options in a fortnightly manner.

  • Here are other non-policy measures announced by RBI today
    Sandbox on prevention of financial frauds added to cohorts
    On-tap application for participation in regulatory sandbox for continuous innovation in fintech
    Will continue with interim enhancement of WMA limit for states & UTs for another six-months upto March 31, 2022
    Bank lending to NBFCs for priority on-lending to extended for 6-months upto March 31, 2022
    To introduce internal ombudsman scheme for NBFCs with higher customer interface

RBI Monetary Policy LIVE Updates:
The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) kept the repo rate unchanged in the fourth bi-monthly policy meet for the financial year 2021-22, governor Shaktikanta Das said on Friday. The MPC voted unanimously to keep policy rates unchanged while it voted 5:1 to maintain an 'accommodative' stance .
With no change this time as well, the repo rate currently stands at 4 percent. The reverse repo rate has been maintained at 3.35 percent.