rbi leaves key rates unchanged, passes economic revival buck to … · 2017-12-07 · 12/7/2017 rbi...
TRANSCRIPT
-
12/7/2017 RBI leaves key rates unchanged, passes economic revival buck to Centre - The Financial Express
http://www.financialexpress.com/economy/rbi-leaves-key-rates-unchanged-passes-economic-revival-buck-to-centre/964189/ 1/8
Home / Economy
Recommended by
Coverfox
Buy Term InsuranceBefore Turning 30:
m.kotak.com
Pay NO Charges OnNon-Maintenance Of
Mansion Global
At Just 19, Kylie JennerBuys Third Home
PayPal
Check out faster withOne Touch™
TOP NEWS
RBI leaves key rates unchanged, passes economic revivalbuck to CentreBy: FE Bureau | Mumbai | Updated: December 7, 2017 6:40 AM
Wednesday’s unsurprising Reserve Bank of India
(RBI) decision to leave its policy rate and neutral
stance unchanged while mildly raising its inflation
Holds on policy rate, ups inflation outlook; with finmin, to offer a ‘reform and recap package’ for PSBs. (IEimage)
The first Tata Motors
Tigor electric vehicle
http://www.financialexpress.com/http://www.financialexpress.com/economy/http://www.outbrain.com/what-is/default/enhttps://www.coverfox.com/term-insurance/articles/five-reasons-to-buy-term-insurance-in-your-30s/?utm_source=outbrain&utm_medium=$origsrcid$&utm_campaign=003a243bde776eff2f907575103e4ef1ca&utm_title=Top+Reasons+to+Buy+Term+Insurance+in+Your+30s&network=outbrain&category=termarticlehttp://0g4hy.voluumtrk.com/9b949ea2-502b-4b7d-aa49-d347f87b5dd3?ad_id=00e3783bc3e2ae30db1ca34dc73013728c&ad_title=title&doc_title=Pay+NO+Charges+On+Non-Maintenance+Of+Balances.+Apply+Now.&publisher_name=$publisher_name$&source_id=$source_id$&doc_author={doc_author}&req_id={req_id}&referrer_publisher_name=$referrer_publisher_name$&time_stamp=$time_stamp$http://www.mansionglobal.com/articles/37014-at-just-19-kylie-jenner-buys-third-home?mod=mansion_global_articles_en_wsj_home&mod=mansiongl_edit_outbrain_Dechttps://ad.doubleclick.net/ddm/trackclk/N426203.3027775OUTBRAININDIA/B20490254.209807258;dc_trk_aid=409580346;dc_trk_cid=95638808;dc_lat=;dc_rdid=;tag_for_child_directed_treatment=?utm_term=$publisher_name$http://www.financialexpress.com/author/fe-bureau/http://www.financialexpress.com/tag/rbi/https://www.facebook.com/sharer.php?u=http%3A%2F%2Fwww.financialexpress.com%2Feconomy%2Frbi-leaves-key-rates-unchanged-passes-economic-revival-buck-to-centre%2F964189%2Fhttps://twitter.com/share?url=http%3A%2F%2Fwww.financialexpress.com%2Feconomy%2Frbi-leaves-key-rates-unchanged-passes-economic-revival-buck-to-centre%2F964189%2F&via=FinancialXpress%20&text=RBI%20leaves%20key%20rates%20unchanged%2C%20passes%20economic%20revival%20buck%20to%C2%A0Centrewhatsapp://send?text=http%3A%2F%2Fwww.financialexpress.com%2Feconomy%2Frbi-leaves-key-rates-unchanged-passes-economic-revival-buck-to-centre%2F964189%2F%3Futm_source%3Dwhatsapp%26utm_medium%3Dsocial%26utm_campaign%3DWhatsappShare : RBI%20leaves%20key%20rates%20unchanged%2C%20passes%20economic%20revival%20buck%20to%C2%A0Centrehttp://www.financialexpress.com/industry/the-first-tata-motors-tigor-electric-vehicle-rolls-out-from-sanand/964158/
-
12/7/2017 RBI leaves key rates unchanged, passes economic revival buck to Centre - The Financial Express
http://www.financialexpress.com/economy/rbi-leaves-key-rates-unchanged-passes-economic-revival-buck-to-centre/964189/ 2/8
forecast for the second half of this fiscal has put the
task of spurring the economic recovery, of which
there is scant evidence so far, more in the hands of a
fiscally stressed government. Announcing the
Monetary Policy Committee’s decision to keep the
repo rate at 6% in the wake of a “sharp uptick in
momentum” of retail inflation, RBI governor Urjit Patel said: “We have a neutral stance,
which means that depending on the data flow (on growth/inflation) in the coming
months and quarters (we) will determine…the policy.” Most analysts saw no change in
the February review either, even though the MPC’s commentary was less hawkish than
bond markets expected — it said risk to inflation are “evenly balanced”. The yield on the
benchmark 10-year bond fell 3 basis points on Wednesday to 7.03%. For the RBI’s
projection of 6.7% gross value added (GVA) growth — which it maintained in the latest
bi-monthly review despite Q2 expansion coming in lower than projected in the October
review — to pan out, expansion should be close to 7.6% in the second half, an
assumption many analysts find a bit exaggerated. Listing out near-term factors like HRA
to government staff and global oil prices that will influence inflation, the MPC said, “On
the whole, inflation is estimated in the range of 4.3-4.7% in Q3 and Q4 of this year,”
against an average 4.2-4.6% in the October review.
The finance ministry, which would clearly
have liked a rate cut, said: “The MPC
recognised that inflation remains firmly
under control, retaining its inflation
projection for the second half of FY 2018 and
assessing that the risks to this projection are
evenly balanced. For that reason, it has
maintained a neutral policy stance.”
Although the surplus liquidity in the system
continued to decline in October-November,
the MPC did not cut the cash reserve ratio
either — Patel said there wasn’t any drying
rolls out from Sanand
Magnitude 5.1
earthquake jolts Jammu
and Kashmir, no
casualties reported
Budget 2018: Industry representatives want lower corporate tax from FM Arun Jaitley
http://www.financialexpress.com/industry/the-first-tata-motors-tigor-electric-vehicle-rolls-out-from-sanand/964158/http://www.financialexpress.com/india-news/magnitude-5-1-earthqake-jolts-jammu-and-kashmir-no-casualties-reported/964285/http://www.financialexpress.com/budget/budget-2018-industry-representatives-want-lower-corporate-tax-from-fm-arun-jaitley/964163/http://www.financialexpress.com/
-
12/7/2017 RBI leaves key rates unchanged, passes economic revival buck to Centre - The Financial Express
http://www.financialexpress.com/economy/rbi-leaves-key-rates-unchanged-passes-economic-revival-buck-to-centre/964189/ 3/8
out of liquidity yet while deputy governor Viral Acharya saw “slightly surplus” liquidity
by March. The surplus in the reverse repo markets is currently hovering above Rs 1 lakh
crore and analysts don’t expect the central bank to persist with aggressive open market
debt sales to drain out cash. The MPC saw a few factors that it believes augurs well for
growth: An increase in capital raised from the primary market, which bucked a trend of
sluggishness of the past several years; the likely enhancement of “allocative efficiency”
after large stressed borrowers are referenced to insolvency resolution process and
public sector banks’ recapitalisation. Stressing that public sector banks (PSBs) are
offered “a reform and recap package” rather than a mere recap package that could sow
the seeds of “another boom and bust cycle of lending”, Patel said the RBI was working
with the department of financial services in the finance ministry to determine the
amount of recapitalisation bonds to be placed on each PSB’s balance sheet and the
component of external fund-raising. “Recapitalisation bonds will be front-loaded for
banks that have managed their balance sheet strength more prudently and can use the
injected capital to lend besides providing for legacy asset losses,” the governor said. The
banks, he asserted, would receive government equity contribution based on their
“resolve and progress” towards reforms in a significant and time-bound manner and
become “slim and trim” by implementing better-focused strategies and selling non-core
assets.
According to Patel, the MPC did not consider shifting the stance because nothing
between October to December was significant in terms of the macro outcome that would
warrant it. “Moderation in inflation excluding food and fuel observed in Q1 of 2017-18
has, by and large, reversed. There is a risk that this upward trajectory may continue in
the near term,” he said. The central bank also cautioned that farm loan waivers by select
states, partial roll-back of excise duty and value-added tax in the case of petroleum
products, along with a decrease in revenue on account of reduction in goods and
services tax (GST) rates for several goods and services may result in fiscal slippage with
attendant implications for inflation. Following the MPC decision, rating agency Crisil
maintained its inflation forecast for FY18 at an average of 4%. “… there could be room
for a rate cut if the downside risks to growth materialise, and inflation undershoots the
MPC’s growth forecast for the second half. The base case scenario is of MPC staying on
hold this fiscal.” Sonal Varma, MD and chief economist at Nomura, said both growth and
-
12/7/2017 RBI leaves key rates unchanged, passes economic revival buck to Centre - The Financial Express
http://www.financialexpress.com/economy/rbi-leaves-key-rates-unchanged-passes-economic-revival-buck-to-centre/964189/ 4/8
inflation are headed higher, but she expects rates to be on hold through 2018 as the RBI
has a sufficient real rate cushion to absorb higher inflation. “Although there could be
some downside risk to the RBI’s FY18 GVA growth projection, we believe that growth is
headed higher, supported by ongoing remonetisation, resolution of GST-related issues
and large bank recapitalisation,” Varma wrote. “Inflation will range between 4-4.5% for
the rest of the year and hence we would rule out any rate cut this financial year,” CARE
Ratings said. “Our GDP growth estimate is 6.7-6.8% which will be slightly lower than RBI
implied GDP growth rate of 6.8-6.9% (given differential of 0.2% between GDP and GVA).”
PROMOTED STORIES
Recommended by
VNI forecast: M2M connectionsincrease globallycisco
Buy Term Insurance BeforeTurning 30: ExpertsCoverfox
Watch Bhoomi - A Father &Daughter Story starring SanjayDutt.Amazon Prime Video
Post Your CommentYour email address will not be published.
Your Comment
Characters Remaining: 1000
Name Email
SIGN-IN Facebook Google Plus
http://www.outbrain.com/what-is/default/enhttp://r1.zemanta.com/r/u1gqv5fsrp4w/outbrain/31513/1327090/?_r_outbrainpubid=$source_id$https://www.coverfox.com/term-insurance/articles/five-reasons-to-buy-term-insurance-in-your-30s/?utm_source=outbrain&utm_medium=$origsrcid$&utm_campaign=003a243bde776eff2f907575103e4ef1ca&utm_title=Top+Reasons+to+Buy+Term+Insurance+in+Your+30s&network=outbrain&category=termarticlehttps://www.primevideo.com/region/eu/detail/0LTRVPK0YP9Z2WBGZ4UELX1KAJ/ref=dvm_web_3pd_in_pl_s_600005102_Bhoomi_Generic_T1?utm_term=$publisher_name$
-
12/7/2017 RBI leaves key rates unchanged, passes economic revival buck to Centre - The Financial Express
http://www.financialexpress.com/economy/rbi-leaves-key-rates-unchanged-passes-economic-revival-buck-to-centre/964189/ 5/8
DON'T MISS
SUBMIT
Captcha here
No Comments.
Donald Trump moves US embassy to Jerusalem: India's position on Palestine isindependent, consistent, says MEA
Babri Masjid-Ram Janambhoomi row: Did SC do right? Find out here
Rahul Gandhi fires Gabbar Singh jibe at PM Modi, claims BJP snatched farmers' land
Gujarat elections 2017: Here is how Ayodhya became most debated topic in poll boundstate
Infosys Chairman Nandan Nilekani seeks to reclaim past glory with this big move
Gujarat Assembly Elections 2017: First phase of campaigning ends today, PM Modi to talkwith BJP workers
GST payments: As revenue falls, CBEC takes this big step against taxpayers
http://www.financialexpress.com/india-news/donald-trump-moves-us-embassy-to-jerusalem-indias-position-on-palestine-is-independent-consistent-says-mea/964287/http://www.financialexpress.com/india-news/donald-trump-moves-us-embassy-to-jerusalem-indias-position-on-palestine-is-independent-consistent-says-mea/964287/http://www.financialexpress.com/india-news/babri-masjid-ram-janambhoomi-row-did-sc-do-right-find-out-here/964113/http://www.financialexpress.com/india-news/babri-masjid-ram-janambhoomi-row-did-sc-do-right-find-out-here/964113/http://www.financialexpress.com/elections/gujarat-assembly-elections-2017/rahul-gandhi-fires-gabbar-singh-jibe-at-pm-modi-claims-bjp-snatched-farmers-land/964274/http://www.financialexpress.com/elections/gujarat-assembly-elections-2017/rahul-gandhi-fires-gabbar-singh-jibe-at-pm-modi-claims-bjp-snatched-farmers-land/964274/http://www.financialexpress.com/elections/gujarat-assembly-elections-2017/gujarat-elections-2017-here-is-how-ayodhya-became-most-debated-topic-in-poll-bound-state/964255/http://www.financialexpress.com/elections/gujarat-assembly-elections-2017/gujarat-elections-2017-here-is-how-ayodhya-became-most-debated-topic-in-poll-bound-state/964255/http://www.financialexpress.com/industry/infosys-chairman-nandan-nilekani-seeks-to-reclaim-past-glory-with-digital-push/964241/http://www.financialexpress.com/industry/infosys-chairman-nandan-nilekani-seeks-to-reclaim-past-glory-with-digital-push/964241/http://www.financialexpress.com/elections/gujarat-assembly-elections-2017/gujarat-assembly-elections-2017-first-phase-of-campaigning-ends-today-pm-modi-to-talk-with-bjp-workers/964205/http://www.financialexpress.com/elections/gujarat-assembly-elections-2017/gujarat-assembly-elections-2017-first-phase-of-campaigning-ends-today-pm-modi-to-talk-with-bjp-workers/964205/http://www.financialexpress.com/economy/gst-payments-as-revenue-falls-cbec-takes-this-big-step-against-taxpayers/964172/http://www.financialexpress.com/economy/gst-payments-as-revenue-falls-cbec-takes-this-big-step-against-taxpayers/964172/
-
12/7/2017 RBI leaves key rates unchanged, passes economic revival buck to Centre - The Financial Express
http://www.financialexpress.com/economy/rbi-leaves-key-rates-unchanged-passes-economic-revival-buck-to-centre/964189/ 6/8
BUSINESS GALLERY
TECHNOLOGY GALLERY
Donald Trump recognizes Jerusalem as Israel capital: UK, France reject US move; EU, UNcriticize; here are 10 developments
UDAY: Going to get tough for discoms, Centre may not allow losses over 15 pct to be passedon to consumers
Delhi smog: Red Alert as traffic pollution likely to effect newborn, here is how
PM Modi to unveil Dr Ambedkar International Centre in Delhi on Thursday; checkspectacular photos
Bhuvneshwar Kumar reception; From Virat Kohli, MS Dhoni to Rohit Sharma, see whoall attended
Most Instagrammed Indian locations of 2017: Connaught Place on 2nd, Taj Mahal on 3rd;check who tops the list
Show of force! US B-1B bomber flies over Korean peninsula during joint aerial drill;see photos
PM Narendra Modi most followed on Twitter list in 2017 but these men had bettergrowth percentage
Google reveals top movies, songs in India in 2017; you won’t believe who made it to the list
http://www.financialexpress.com/picture-gallery-section/business-gallery/http://www.financialexpress.com/picture-gallery-section/technology-gallery/http://www.financialexpress.com/world-news/donald-trump-recognizes-jerusalem-as-israel-capital-uk-france-reject-us-move-eu-un-criticize-here-are-10-developments/964199/http://www.financialexpress.com/world-news/donald-trump-recognizes-jerusalem-as-israel-capital-uk-france-reject-us-move-eu-un-criticize-here-are-10-developments/964199/http://www.financialexpress.com/economy/uday-going-to-get-tough-for-discoms-centre-may-not-allow-losses-over-15-pct-to-be-passed-on-to-consumers/964175/http://www.financialexpress.com/economy/uday-going-to-get-tough-for-discoms-centre-may-not-allow-losses-over-15-pct-to-be-passed-on-to-consumers/964175/http://www.financialexpress.com/india-news/delhi-smog-red-alert-as-traffic-pollution-likely-to-effect-newborn-here-is-how/964237/http://www.financialexpress.com/india-news/delhi-smog-red-alert-as-traffic-pollution-likely-to-effect-newborn-here-is-how/964237/http://www.financialexpress.com/photos/business-gallery/963934/pm-modi-to-unveil-dr-ambedkar-international-centre-in-delhi-on-thursday-check-spectacular-photos/http://www.financialexpress.com/photos/business-gallery/963934/pm-modi-to-unveil-dr-ambedkar-international-centre-in-delhi-on-thursday-check-spectacular-photos/http://www.financialexpress.com/photos/business-gallery/963534/bhuvneshwar-kumar-reception-from-virat-kohli-ms-dhoni-to-rohit-sharma-see-who-all-attended/http://www.financialexpress.com/photos/business-gallery/963534/bhuvneshwar-kumar-reception-from-virat-kohli-ms-dhoni-to-rohit-sharma-see-who-all-attended/http://www.financialexpress.com/photos/business-gallery/963455/most-instagrammed-indian-locations-of-2017-connaught-place-on-2nd-taj-mahal-on-3rd-check-who-tops-the-list/http://www.financialexpress.com/photos/business-gallery/963455/most-instagrammed-indian-locations-of-2017-connaught-place-on-2nd-taj-mahal-on-3rd-check-who-tops-the-list/http://www.financialexpress.com/photos/business-gallery/963261/show-of-force-us-b-1b-bomber-flies-over-korean-peninsula-during-joint-aerial-drill-see-photos/http://www.financialexpress.com/photos/business-gallery/963261/show-of-force-us-b-1b-bomber-flies-over-korean-peninsula-during-joint-aerial-drill-see-photos/http://www.financialexpress.com/photos/business-gallery/963116/these-two-men-overtook-even-pm-narendra-modi-on-most-followed-twitter-list-in-2017-see-how-this-happened/http://www.financialexpress.com/photos/business-gallery/963116/these-two-men-overtook-even-pm-narendra-modi-on-most-followed-twitter-list-in-2017-see-how-this-happened/http://www.financialexpress.com/photos/technology-gallery/961982/google-reveals-top-movies-songs-in-india-in-2017-you-wont-believe-who-made-it-to-the-list/http://www.financialexpress.com/photos/technology-gallery/961982/google-reveals-top-movies-songs-in-india-in-2017-you-wont-believe-who-made-it-to-the-list/
-
12/7/2017 RBI leaves key rates unchanged, passes economic revival buck to Centre - The Financial Express
http://www.financialexpress.com/economy/rbi-leaves-key-rates-unchanged-passes-economic-revival-buck-to-centre/964189/ 7/8
HINDI NEWS
Google reveals best android apps of 2017: No place for Facebook or WhatsApp; downloadthem now!
Toyota showcases third generation humanoid robot T-HR3 that mirrors user; see pictures
Orbital ATK ready to launch cargo mission to International Space Station; see images
From Beijing to Berlin; Apple fans flock to buy iPhone X, see pics
बाबरी िव�ंस: सु�ी यािचकाकता� ने मोदी को बताया 'जांबाज िसपाही', किपल िस�ल पर जमकर बरसे
गुजरात चुनाव: लड़की के साथ हािद�क पटेल की कई और सीडी, बीजेपी के साथ जुबानी जंग बढ़ी
यूपी िनकाय चुनाव म� बीजेपी का बुरा हाल, 45 फीसदी उ�ीदवारो ंकी जमानत ज�
The Express Group The Indian Express The Financial Express Loksatta Jansatta inUth Ramnath Goenka Awards
Privacy Policy Advertise with Us Contact Us Feedback
Copyright © 2017 The Indian Express [P] Ltd. All Rights Reserved.
http://www.jansatta.com/http://www.financialexpress.com/photos/technology-gallery/958408/google-reveals-best-android-apps-of-2017-no-place-for-facebook-or-whatsapp-download-them-now/http://www.financialexpress.com/photos/technology-gallery/958408/google-reveals-best-android-apps-of-2017-no-place-for-facebook-or-whatsapp-download-them-now/http://www.financialexpress.com/photos/technology-gallery/952701/toyota-showcases-third-generation-humanoid-robot-t-hr3-that-mirrors-user-see-pictures/http://www.financialexpress.com/photos/technology-gallery/952701/toyota-showcases-third-generation-humanoid-robot-t-hr3-that-mirrors-user-see-pictures/http://www.financialexpress.com/photos/technology-gallery/929136/nasa-orbital-atk-ready-to-launch-cargo-mission-to-international-space-station/http://www.financialexpress.com/photos/technology-gallery/929136/nasa-orbital-atk-ready-to-launch-cargo-mission-to-international-space-station/http://www.financialexpress.com/photos/technology-gallery/918279/from-beijing-to-berlin-apple-fans-flock-to-buy-iphone-x-see-pics/http://www.financialexpress.com/photos/technology-gallery/918279/from-beijing-to-berlin-apple-fans-flock-to-buy-iphone-x-see-pics/https://www.jansatta.com/national/sunni-litigant-haji-mehmood-opposed-counsel-kapil-sibal-remarks-on-ayodhya-ram-mandir-dispute-and-call-pm-modi-jahbaaz-sipahi/509997/https://www.jansatta.com/trending-news/gujarat-polls-2017-another-set-videos-patidar-quota-leader-hardik-patel-two-others-girl-went-viral/510033/https://www.jansatta.com/rajya/uttar-pradesh/up-local-body-polls-almost-half-of-bjp-candidates-in-up-civic-polls-lost/509981/http://www.financialexpress.com/todays-paper/http://indianexpress.com/http://itunes.apple.com/us/app/financial-express-for-iphone/id508738603?mt=8http://itunes.apple.com/in/app/the-financial-express/id491303242?mt=8https://play.google.com/store/apps/details?id=com.financialexpress.androidhttp://www.financialexpress.com/syndication/http://epaper.financialexpress.com/https://www.facebook.com/thefinancialexpresshttps://twitter.com/FinancialXpresshttps://plus.google.com/+financialexpresshttp://expressindia.indianexpress.com/news/expressgroup/http://www.indianexpress.com/http://www.financialexpress.com/http://www.loksatta.com/http://www.jansatta.com/http://www.inuth.com/http://expressindia.indianexpress.com/ramnath-goenka-foundation/http://www.financialexpress.com/privacy-policy/http://expressgroup.indianexpress.com/advertise.htmlhttp://www.financialexpress.com/contact-us/http://www.financialexpress.com/feedback/
-
12/7/2017 RBI leaves key rates unchanged, passes economic revival buck to Centre - The Financial Express
http://www.financialexpress.com/economy/rbi-leaves-key-rates-unchanged-passes-economic-revival-buck-to-centre/964189/ 8/8