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RBI likely to hold interest rate at monetary policy review

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Reserve Bank of India RBI

Mumbai, Feb 5: With the annual retail inflation rate breaching the five per cent mark in December and going over the RBI’s median level of four per cent, the central bank is widely expected of keep its key interest rate on hold for the fourth time in succession at its final bi-monthly monetary policy review of 2017-18 slated for Wednesday.

On the other hand, there are even concerns among sections of the industry that the RBI could opt for a rate hike given the inflationary push of Budget 2018-19 last week with Finance Minister Arun Jaitley proposing higher minimum support prices for farmers in the next fiscal in the last full budget by the government before the general elections early in 2019.

“The RBI should not over-react to the high yield pressures of the bond market, along with the government promising a substantial revision in the Minimum Support Price (MSP) for farmers, and refrain from going in for any hike in the benchmark policy lending rates when the Monetary Policy Committee meets on February 7,” industry chamber Assocham said in a statement.

Presenting the Union Budget, Jaitley on February 1, announced that the MSP for notified kharif crops will be 1.5 times the input cost, and also stepped up total budgetary allocation for the sector for next fiscal by about five per cent.

At the fiscal’s penultimate policy review in December 2017, the RBI maintained the status quo on its key lending rate for the third time in succession at six per cent, citing concerns on the rising trajectory of inflation.

The Reserve Bank Of India also raised the inflation forecast for the remainder of the current fiscal to 4.3-4.7 per cent.

The continuing rise in food and fuel prices pushed India’s annual retail inflation rate over the five per cent mark in December 2017, to 5.21 per cent, from 4.88 per cent in November 2017.

Credit ratings agency Crisil said in a note that the low-base effect causing the acceleration in retail inflation from July to November 2017, faded away in December.

“Yet, CPI (consumer price index) inflation printed at a 17-month high, driven by higher inflation in housing, food (especially vegetables) and personal care and effects – factors that still warrant caution on the part of the RBI,” it said.

“Accordingly, we also expect the Monetary Policy Committee (MPC) to keep policy rates on hold for the remainder of this fiscal,” it added.

According to Vinod Nair, Lead of Research, Geojit Financial Services, higher-than-expected fiscal deficit target for fiscal 2019 of 3.3 per cent, rising inflation and yield may push RBI to be more “hawkish” on interest rates in the upcoming monetary policy review.

According to A. Prasanna Economist at ICICI Securities, “the probability of rate hikes in the next fiscal year has gone up materially”.

Kotak Institutional Equities Senior Economist Suvodeep Rakshit said: “The RBI will be cautious on risks of revenue slippages, increase in food subsidy (possibly through higher MSP) and overall expenditure quality, and possible fiscal slippages.”

“Further, higher crude prices and global macro conditions will weigh on the RBI. We expect the RBI to remain on a pause mode. However, the tone will likely be more hawkish with the probability of rate hikes in FY2019 increasing,” he added.

In the budget, Jaitley also made a significant announcement of fiscal slippage with implications for pushing inflation, revising upwards the government’s fiscal deficit target for 2017-18 to 3.5 per cent of the GDP, or the equivalent of Rs 5.95 lakh crore.

The higher target came in place of the 3.2 per cent – or Rs 5.46 lakh crore – for the current fiscal announced earlier.

While holding its repo, or the short term lending rate for commercial banks, in December 2017, the RBI said: “The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of four per cent while supporting growth.”

From the government’s perspective, sounding a clear note of caution on rising crude oil prices pushing inflation, Chief Economic Advisor (CEA) Arvind Subramanian has toned down his earlier vocal expectation of a RBI rate cut.

In an interview with a news channel following the release of the Economic Survey 2017-18 authored by him, Subramanian said that with retail inflation edging past the RBI’s median target of four per cent, the “cycle has turned”.

IANS

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This Diwali get discount on Maruti Suzuki up to Rs 55,000

India’s largest carmaker company, Maruti Suzuki is all set for this festive season. It has rolled out Diwali offers to customers on elect Arena and NEXA models including the Wagon R, Swift, Brezza, Baleno, Ciaz and S-Cross.

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India’s largest carmaker company, Maruti Suzuki is all set for this festive season. It has rolled out Diwali offers to customers on elect Arena and NEXA models including the Wagon R, Swift, Brezza, Baleno, Ciaz and S-Cross.

The discount on Arena model will be available till October 16, on the other hand, discounts on other models will be available till October 20. Customers will get up to Rs 55,000 discount if they buy the car this season.

Alto: Customers will get benefits up to Rs 41, 000 on Maruti’s Alto. Both petrol and CNG variants are available with these offers. Maruti Alto’s price ranges from Rs 2.94 lakh to Rs 4.36 lakh.

Maruti S-Presso: Customers will get benefits up to Rs 48,000 on this car. The S-Presso’s will be available in petrol and CNG. The S-Presso is priced from Rs 3.70 lakh to Rs 5.13 lakh.

Maruti Celerio: Customers will get benefits up to Rs 53, 000. The Celerio is priced from Rs 4.41 lakh to Rs 5.68 lakh. The Celerio X ranges between Rs 4.90 lakh and Rs 5.67 lakh.

Maruti Wagon R: Get benefits up to Rs 40,000. These offers are applicable to both the petrol and CNG variants of the Wagon R. Maruti’s tall boy hatchback is priced from Rs 4.45 lakh to Rs 5.94 lakh.

Maruti Swift: Maruti is offering discounts on both the MT and AMT variants of the Swift. Maruti Swift is priced from Rs 5.19 lakh to Rs 8.02 lakh. Get a discount up to Rs 40,000.

Maruti Swift Dzire: Get a discount up to Rs 44,000. Maruti has priced the Dzire from Rs 5.89 lakh to Rs 8.80 lakh.

Maruti Vitara Brezza: The Vitara Brezza is priced from Rs 7.34 lakh to Rs 11.40 lakh. Benefits of up to Rs 45,000 on Maruti’s sub-4 metre SUV.

Maruti Baleno: All variants of the Baleno are offered with these benefits. It’s priced from Rs 5.63 lakh to Rs 8.96 lakh. Get benefits up to Rs 33, 000.

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All new Hyundai i20 to launch in November, check features here

The all-new Hyundai i20 is scheduled to launch in India next month. Hyundai India has released the first set of the new i20’s sketches, showcasing what the car set to arrive in India will look like.

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The all-new Hyundai i20 is scheduled to launch in India next month. Hyundai India has released the first set of the new i20’s sketches, showcasing what the car set to arrive in India will look like. It looks identical to the global-spec model with a few changes here and there.

In a statement, Hyundai Motor India Limited stated, “Deriving its futuristic and dynamic characteristics from ‘Sensuous Sportiness’, the all-new i20 brings harmony between four fundamental elements: Proportion, Architecture, Styling, and Technology. The all-new i20 is designed to evoke an emotional Human – Machine interface representing the persona of Modern Tech Savvy, Ambitious and Sophisticated customers. Set to recreate benchmarks of the premium hatchback segment, the all-new i20 showcases an energetic new avatar and a serene ambience on the inside.”

The design of the all-new Hyundai i20 in India is similar to the model for international markets. Based on the newly-released sketches, the upcoming car in India will get a different response. The rear appears to be unchanged, it is the same as one of the models available in markets across the globe.

New Hyundai i20 is expected to be offered with a choice between three engine options: 1.0-litre turbocharged petrol, 1.2-litre petrol, and a 1.5-litre diesel. For transmission, the upcoming Hyundai car in India will most probably get a choice between a manual transmission, an IVT, an iMT, and a seven-speed dual-clutch automatic based on the selected engine.

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2020 lockdowns to drive new forms of automation: Report

Document extraction, robotic process automation (RPA) from anywhere, drones and various employee robots will proliferate.

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The ‘great lockdown of 2020 will make the drive for automation in 2021 both inevitable and irreversible and remote work, new digital muscles and pandemic constraints will create millions of pragmatic automations, according to a new report.

Document extraction, robotic process automation (RPA) from anywhere, drones and various employee robots will proliferate.

“In 2021, up to 30 per cent of organisations will ramp up their focus on quality by better planning and testing automation before deploying it to production or exposing it to employees,” said the Forrester report on automation.

Three times as many information workers will work from home all or most of the time, while many companies will institute hybrid models in which workers come to the office less often.

“As a result of the pandemic, new forms of automation will support one in four remote workers either directly or indirectly by 2022”.

Direct support in the form of giving a bot to individual workers to support their daily journey will be rare.

However, indirect support will blossom, as intelligent automation handles employee benefits questions and supports document, customer service, and line-of-business tasks that are often invisible to the home worker, the findings showed.

Recent rapid growth in the consumer drones industry has sparked momentum in the commercial drone market.

While social distancing is a factor in drone usage, two forces will accelerate adoption in 2021.

“First, governments are crafting better regulations to facilitate drone adoption and commercialization, with Amazon Prime Air gaining FAA approval for drone deliveries and India driving drone pilot training with new policies,” according to the report.

Second, the rapid evolution of computer vision and 5G will enable real-time drone intelligence over ultra-reliable, low-latency communications.

Like machine learning, RPA will become an embedded feature of many platforms by the end of 2021.

“But rushed and haphazard automation exposes systems and the business to serious risk, so the lack of focus on automation quality is alarming, the report warned.

It can lead to monumental failures that not only damage a company’s reputation and customer trust but also limit broader public trust in automation (specifically AI) as a result of media scrutiny, it added.

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