RBI Cuts Repo Rate For Fifth Time This Year: Highlights

RBI policy review: The Reserve Bank of India has now cumulatively lowered interest rates by 135 bps this year.

RBI Cuts Repo Rate For Fifth Time This Year: Highlights

Monetary policy review: The RBI cut the repo rate for the fifth time so far this year

The Reserve Bank of India (RBI) on Friday lowered the repo rate by 25 basis points – or 0.25 percentage point - to 5.15 per cent with immediate effect. The RBI's move was in line with the expectations of most economists. The central bank's Monetary Policy Committee maintained an “accommodative” stance, which rules out any increase in the key interest rates for now. All but one member of the Committee - chaired by Governor Shaktikanta Das - voted to reduce the key rate by 0.25 percentage point whereas the decision on policy stance was unanimous, the central bank said in its fourth bi-monthly statement of the current financial year. The RBI Governor said the central bank will continue with the accommodative stance "as long as growth momentum stays as is and till growth is revived". Economists read the commitment to remain accommodative for as long as necessary to push growth as a strong signal of further monetary easing. The RBI has now cumulatively lowered interest rates by 135 bps this year, but said that "transmission has remained staggered and incomplete". (Also read: Rate-sensitive shares gain ahead of RBI monetary policy decision)

Here are highlights of the RBI's fourth bi-monthly monetary policy review of the current financial year (2019-20): 

Oct 04, 2019 16:56 (IST)
Sensex, Nifty Finish Week Nearly 3% Lower
Domestic stock markets suffered finished the week with an overall loss of nearly 3 per cent. The Sensex fell 1,149.24 points during the week, marking a decline of 2.96 per cent. The broader Nifty index gave up 337.65 points - or 2.93 per cent - during this period. The financial markets remained closed on October 2. 
Oct 04, 2019 16:56 (IST)
Sensex, Nifty Finish Week Nearly 3% Lower
Domestic stock markets suffered finished the week with an overall loss of nearly 3 per cent. The Sensex fell 1,149.24 points during the week, marking a decline of 2.96 per cent. The broader Nifty index gave up 337.65 points - or 2.93 per cent - during this period. The financial markets remained closed on October 2. 
Oct 04, 2019 16:54 (IST)
Banking Stocks Lead Losses
HDFC Bank, ICICI Bank and Kotak Bank were the top drags on Sensex.
Top percentage losers on the 50-scrip index were Zee Entertainment, Grasim, UltraTech Cement, JSW Steel and Titan, closing between 3.46 per cent and 6.42 per cent lower. 

Oct 04, 2019 16:48 (IST)
Sensex Ends 434 Points Lower As Markets Extend Losses To Fifth Day
The Sensex ended 433.56 points - or 1.14 per cent - lower at 37,673.31 and the Nifty settled at 11,174.75, down 139.25 points - or 1.23 per cent - from its previous close. Both benchmark indices closed lower for a fifth straight session. 
Oct 04, 2019 15:00 (IST)
Banking Stocks Worst Hit After RBI Action
The stock markets reversed direction after the RBI announcements, with the S&P BSE Sensex index falling as much as 703.62 points from an intraday high of 38,403.54 touched in morning to hit 37,699.92 on the downside in afternoon trade. The broader NSE Nifty benchmark moved in a range of 217.55 points, hitting 11,314.00 and 11,182.75 at the strongest and weakest levels of the day respectively.
The Nifty Bank sectoral index - comprising shares of 12 majors banks in the country - fell as much as 2.62 per cent after the release of the RBI decisions. (Catch market updates here)
Oct 04, 2019 14:52 (IST)
Overall Rate Reduction Of 135 Basis Points To Take Time To Filter In: Shaktikanta Das
In a customary press briefing after the conclusion of the three-day meeting of the Monetary Policy Committee, the RBI Governor spoke on a number of topics.
Here are some of the highlights of what he said:

  • Impact of 135-basis-point reduction in repo rate will take time to filter in
  • Government has said it will adhere to fiscal deficit target
  • RBI has no reason to doubt government's commitment to maintain the numbers as given in Budget
  • Whatever shortfall expected because of corporate tax rate cuts, government has the option of increasing or making it up from other sources
  • RBI will not allow any co-operative bank to collapse
  • It will review cooperative banks regulations and discuss with government if required
  • Banking system remains sound and stable; no reason for unnecessary panic
  • We have announced a cadre of officers who will look after the PMC Bank issue
  • RBI to continue with accommodative stance as long as growth momentum stays as is and till growth is revived
Oct 04, 2019 14:22 (IST)
RBI To Remain Accommodative Till Growth Revived: Shaktikanta Das
RBI Governor Shaktikanta Das said the central bank will continue with the accommodative stance "as long as growth momentum stays as is and till growth is revived".
The comments from the RBI chief come at a time the economy is struggling against the lowest economic growth rate recorded in more than six years and lakhs of estimated job losses.
Oct 04, 2019 14:21 (IST)
RBI Monetary Policy: 2019-20 GDP Projection Lowered To 6.1%
The RBI lowered its economic growth projection for the current financial year to 6.1 per cent, from 6.9 per cent in August. The country's GDP is expected to grow 5.3 per cent in the second quarter and 6.6-7.2 per cent in the second half of financial year 2019-20, which ends in March 2020.
Oct 04, 2019 14:19 (IST)
Repo Rate At Lowest Level Since April 2010
The Reserve Bank of India (RBI) moved the repo rate to the lowest level recorded since April 2010. It has now cumulatively lowered interest rates by 135 bps (1.35 percentage point) so far this year, but said that "transmission has remained staggered and incomplete".
All but one member of the Monetary Policy Committee - chaired by Governor Shaktikanta Das - voted to reduce the key rate by 0.25 percentage point in the fourth bi-monthly review of 2019-20. 
Oct 04, 2019 12:31 (IST)
RBI Cuts Repo Rate By 0.25 Percentage Point, Retains "Accommodative" Stance
The RBI's Monetary Policy Committee decided to cut the repo rate by 25 basis points - or 0.25 percentage point - to 5.15 per cent - a level last seen in April 2019. The six-member MPC retains an "accommodative" stance on policy, which rules out hikes in the key lending rates for now. 
Oct 04, 2019 11:41 (IST)
RBI Monetary Policy Review: Monetary Policy Committee's Decision To Be Out Soon
The Reserve Bank of India (RBI)'s Monetary Policy Committee will shortly release its fourth bi-monthly statement of the current financial year (2019-20). The six-member Monetary Policy Committee, chaired by RBI Governor Shaktikanta Das, has so far this year reduced the key interest rates by 110 basis points (1.1 percentage point). 
Oct 04, 2019 11:16 (IST)
RBI Projects Economic Growth At 6.9 This Financial Year
In August, the RBI lowered its GDP projection for the current financial year to 6.9 per cent from 7 per cent, and underlined the need for addressing growth concerns by boosting aggregate demand.  RBI Governor Shaktikanta Das said the demand and investment slowdown was causing a dampening effect on growth. (Read more)
Oct 04, 2019 10:51 (IST)
RBI Monetary Policy: Analysts Await Commentary On GDP Growth
The government has in the past one month announced a slew of measures - from withdrawal of higher taxes on foreign investors, a mega bank consolidation plan and a reduction in corporation taxes - to push consumption and growth. India's GDP or gross domestic product expanded 5 per cent in the quarter ended June, marking the lowest pace of growth in more than six years.
Oct 04, 2019 10:48 (IST)
Need Major Revival In Demand To Support Capacity Utilization: CARE Ratings
"After all the measures taken by the government to revive the economy it may be expected that the RBI will reduce rates by 25 bps most probably," Madan Sabnavis, chief economist, CARE Ratings, told NDTV.
"For industry to react, we need to see major revival in demand that leads to better capacity utilization and hence investment. That would take time to work out," he said.
Oct 04, 2019 10:37 (IST)
RBI Monetary Policy Review: Repo Rate Likely To Be Cut By At Least 25 Basis Points
The Reserve Bank of India (RBI) is predicted to lower its key lending rate by at least 25 basis points to 5.15 per cent today, which would take cumulative cuts so far this year to 135 bps, according to news agency Reuters.
In August, the central bank reduced the repo rate by 35 basis points, following three bi-monthly reductions of 25 basis points each.
Oct 04, 2019 10:35 (IST)
“We Cannot Have Lower Interest Rates Like In Advanced Economies”: Shaktikanta Das
RBI Governor Shaktikanta Das has maintained that future rate cuts will depend on incoming data. "We cannot have lower interest rates like in advanced economies," he said last month.
The RBI in August lowered its GDP or gross domestic product growth projection for 2019-20 to 6.9 per cent from 7 per cent, underlining the need for addressing growth concerns by boosting aggregate demand.
Oct 04, 2019 10:32 (IST)
RBI Policy Statement Due At 11:45 AM

The Reserve Bank of India will release its fourth bi-monthly policy statement of financial year 2019-20 at 11:45 am. RBI Governor Shaktikanta Das is scheduled to address a press conference at noon, which will be followed by media interaction till 12:45 pm. 

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