RBI Policy Review

Rates on hold, more easing possible

The Reserve Bank of India (RBI) Governor Raghuram Rajan arrives for a news conference after the bi-monthly monetary policy review in Mumbai, August 4, 2015. REUTERS/Shailesh Andrade

The Reserve Bank of India kept its policy rate on hold at 7.25 percent on Tuesday, as widely expected, while leaving the door open to ease further depending on the inflation outlook and how swiftly banks lower their lending rates.  Full Article 

A broker reacts while trading at his computer terminal at a stock brokerage firm in Mumbai, June 29, 2015. REUTERS/Danish Siddiqui/Files
Expert Views

Reaction to the RBI's monetary policy decision

"The rates have been kept on hold as expected. The RBI has marked down the inflation expectations and therefore it is good news. It means the RBI is recognising that some of the risk that they saw in June are mitigating. In the near-term, we expect the RBI to remain on hold due to U.S. Federal Reserve's decision," said R. Sivakumar, head of fixed income, Axis Asset Management.  Click for more expert views 

A money lender counts Indian rupee currency notes at his shop in Ahmedabad, May 6, 2015. REUTERS/Amit Dave/Files
Rate Cut Timing

RBI not ruling out mid-policy rate cut - Rajan

The Reserve Bank of India is not ruling out acting outside its regular policy reviews and is awaiting further data, Governor Raghuram Rajan said. "There was more need to move fast in the early stages of the turnaround, we will take all the information into account and decide whether at times it warrants moving in-between policy cycles or it doesn't," Rajan said.  Full Article 

The Reserve Bank of India (RBI) Governor Raghuram Rajan gestures while replying to a question during a news conference after the bi-monthly monetary policy review in Mumbai December 2, 2014. REUTERS/Danish Siddiqui/Files
Allaying Fears

Govt doesn't want to curb RBI's powers: official

The finance secretary dismissed reports that the government was trying to curtail the central bank's powers on monetary policy. The comments came days after the finance ministry published a draft parliamentary bill that would reduce the RBI's independence to set interest rates. Rajiv Mehrishi said it was not right to conclude that the government was trying to clip the central bank's wings.  Full Article 

The Reserve Bank of India (RBI) Governor Raghuram Rajan speaks during a news conference after the bi-monthly monetary policy review in Mumbai, August 4, 2015. REUTERS/Shailesh Andrade

More funds may be withdrawn via bond sales

Reserve Bank of India Governor Raghuram Rajan said the central bank could continue to withdraw liquidity via open market operation bond sales, while saying any hike in foreign debt limits would only come after the U.S. Federal Reserve raises U.S. rates. Foreign investors have nearly exhausted their $25 billion allocation of government bonds.  Full Article 

Reserve Bank of India (RBI) Governor Raghuram Rajan speaks at a news conference after the bi-monthly monetary policy review in Mumbai, June 2, 2015. REUTERS/Danish Siddiqui

Rajan says comfortable with pace of disinflation

Reserve Bank of India Governor Raghuram Rajan said on Tuesday the central bank was "comfortable" with the pace of disinflation, although it would monitor rainfall in August "very carefully." He also said the central bank was looking at how inflation expectations at households were changing, rather than the levels themselves.  Full Article 

Monetary Policy Committee

What Governor Rajan Said

  • On WPI and CPI: Can't keep shifting from one index to another based on what is comfortable
  • On SLR: This is evolving issue, we have to move towards that level where banks need to be freed up from captive SLR investment
  • On Monetary Policy Panel: Institutionalizing policy of monetary policy vital given inflation mandate; details of monetary policy committee will be made public when the govt feels comfortable
  • On New Banks: Hope to announce at least one set of bank licences before end of August

RBI Statement