IF THE RBI’S RECENT CREDIT policy is anything to go by, talk of whether the central bank is really an independent institution is proving just that, mere talk, considering that the RBI walked the path on its mandate of inflation-targeting keeping aside economic-growth considerations for the moment.
Against the wide expectations of bankers, economists and industry stalwarts, the Monetary Policy Committee (MPC), headed by RBI Governor Urjit Patel, did not let its guard down against inflation. The RBI in its announcement on 8 February kept the repo rate or the lending rate status quo at 6.25 percent.
After the demand-squeezing effect of demonetisation, a rate cut was seen as a kick-starter to the economy. A 25 basis point rate cut would have spurred more dips in rates, which could have brought back demand for automobiles and housing.
Well, RBI is doing no such thing and, to top it, the central bank has altered its policy commentary from ‘accommodative’ to ‘neutral’, which came as a shocker to the financial markets. The impact on bond markets was knee-jerk. The 10-year government securities (G-sec), which dipped to 6.4 percent post-demonetisation, climbed to 6.7 percent, back to its pre-demonetisation levels (See chart: Back To Square One).
The RBI has had an ‘accommodative’ stance on interest rates for some time now implying a general downward bias in interest rates. The rates have been on a downward trajectory for the past two years, since January 2015, with cumulative cuts of 175 basis points till date.
“Markets were expecting a rate cut, but the full impact of the demonestation is still unclear,” say Kuntul Sur, Partner, Risk and Regulatory, PwC India. “This is an apolitical move and I don’t see any influence whatsoever.”
Diese Geschichte stammt aus der February 06, 2017-Ausgabe von Businessworld.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent ? Anmelden
Diese Geschichte stammt aus der February 06, 2017-Ausgabe von Businessworld.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent? Anmelden
Is Leadership Without Hierarchies Possible?
LEADERSHIP IN THE current era is more challenging than ever before.
The Rise and Evolution of Coffee Culture in India
AS A BANGALORE native, South Indian filter ‘Kaapi’ has always been a significant part of our tradition.
The Daily Ground Goes Desi
Success in Tier-2 and Tier-3 cities hinges on several key factors, with one of the most important being the ability to offer high-quality products at an accessible price point
Cracking The Indian Code
TARUN JAIN, CEO of Tim Hortons India believes in creating an experience at cafes by blending global quality, local flavours and affordability
Making Coffee the New Chai in India
Affordable, great-tasting coffee made fast-abCoffee is reshaping how India drinks coffee
Scripting A New Era Of Coffee In India
From a bootstrapped startup to international expansion, NOTHING BEFORE COFFEE is brewing its way to the top by challenging the giants of the coffee industry with innovation, personalisation, and sustainability
"Driven By A Younger Demographic, Coffee Culture Is On The Upswing"
SUNIL D'SOUZA, Managing Director and CEO of Tata Consumer Products, discusses the company's strategic growth in India's booming coffee market, focusing on premiumisation, innovation, and expanding consumer experiences both at home and in cafés, in this exclusive conversation with BW Businessworld's Tarannum Manjul
Fresh Brew, Big Ambitions
From startups to stores, Beanly's Samayesh Khanna and Rahul Jain elevate India's coffee culture by making freshly brewed coffee a daily delight
"On Track To Become India's Top Café Chain"
In an exclusive interview, RAJAT AGRAWAL, CEO of Barista Coffee, shared insights on the company's current market position, expansion strategies, and its response to growing competition
"Ensuring A Seamless Coffee Experience Outside The Cafe Is The Next Big Thing To Watch Out For"
In an exclusive conversation with BW Businessworld's Resham Suhail, Third Wave Coffee CEO RAJAT LUTHRA and its Co-founder AYUSH BATHWAL delve on how they are navigating the competitive landscape, going beyond retail and tapping changing consumer preferences