‘No room for RBI to cut rates despite sharp fall in inflation’
Inflation measured by the Consumer Price Index (CPI) eased to 4.59% in December, more than what the market expected, compared with 6.93% in November. Core inflation, which does not factor in food and oil prices softened to 5.2% against 5.4% earlier.
RBI eyes cooling inflation as it defends targeting framework
Consumer price index figures due Tuesday are expected to show a 5 per cent incre...
RBI to keep rates on hold due to sticky inflation: Morgan Stanley
“We expect RBI to keep rates on hold as it continues to maintain its accomm...
Second wave of COVID-19 could hamper nascent recovery: RBI Governor
The reconstituted MPC, which met from October 7 to 9, had decided to keep the benchmark lending rates unchanged in view of the hardening of retail inflation.
Inflation target should be higher, wider: Experts
They proposed a higher headline inflation target of 5-6% accompanied by a core inflation target. This way, the monetary policy committee (MPC) could focus on either of those depending on the situation, and keep prices under control without hampering economic growth.
Drop in core inflation belies hope of demand growth
High food inflation along with lower core inflation do not indicate demand growth, says Jahangir Aziz.
Retail inflation expected to stay close to targeted level by last quarter of FY21: RBI Governor Shaktikanta Das
The RBI has kept the retail inflation target of 4% with a bias of plus/minus 2 per cent. CPI inflation is projected at 6.8% in Q2 of 2020-21. Subsequently, large favourable base effects are expected to pull it down to 5.4% in Q3, and 4.5% confidence intervals for headline inflation in Q4 of 2020-21 are 3.2-5.9% and 2.4-6.6%, respectively, RBI said in the policy statement.
View: RBI needs flexibility, monetary policy cannot become a game of whack-a-mole
The presence of myriad supply constraints, both temporary and permanent, often means that there are periodic spurts in some prices that pushes up headline inflation. These supply problems could show up in items as diverse as onions and healthcare. Flexibility must remain the cornerstone of the new framework.
Concerns over policy benchmark surface again with sticky consumer price index
Although monetary policy cannot rein in the food prices spiral, lowering of rates does impact savers, especially seniors who largely rely on interest income for a living. Higher food is making living costlier for consumers across the spectrum and therefore may not easily be ducked as input for policy making.
Inflation shock will hit bonds hardest in India, Russia, Mexico
The fixed-income securities of the three countries appear the most vulnerable to any surge in consumer prices, according to a Bloomberg study of 10 emerging markets.
Indian economy may shrink by 16.5 per cent in Q1: SBI report
However, they believe the rural recovery is unlikely to support such pace in subsequent quarters as overall, the per capita monthly expenditure in urban areas is at least 1.8 times of rural areas and rural wage growth in real terms might still be negative.
View: Despite headlines, inflation is actually a lot higher than you think
Covid-19 has overhauled our spending patterns entirely, not least because of social distancing rules. We’re laying out less on transportation, restaurants and hotels, and splurging on food, because — like it or not — we’re all home chefs now.
Focus on inflation over growth at next policy review meet: Viral Acharya to RBI
While many analysts are expecting a rate cut of 0.25 per cent to accommodate for growth, some have opined that the price rise situation may result in the RBI going for a pause.
Factory output shrinks 55.5% in April; Full retail inflation data not out
The ministry of statistics & programme implementation withheld the headline retail inflation figure for May but official data showed retail food inflation rose 9.28 per cent on year last month. It had also withheld the headline inflation number for April on the grounds that the data wasn’t reliable because of the lockdown.
Next rate cut depends on how teary-eyed onion leaves RBI
RBI was widely expected to cut interest rates at last week's policy, which would have made it into a sixth consecutive cut in as many policy reviews in 2019 to boost the sagging growth, that has dipped to a six-year low. "We advise investors to track onion prices to time the next rate cut by RBI," Bank of America Securities said.