RBI Monetary Policy News Live Updates: Cryptocurrency is a big threat to India’s macro economic stability, says Das

Russia ready to normalise relations with UK, says Lavrov

‘For durable recovery’: RBI’s MPC retains rates, accommodative stance

Ministry of Health issues revised guidelines for international arrivals, to come in effect from 14th Feb

As we had expected, the MPC and RBI maintained a full status quo, on the stance, repo rate and reverse repo rate, with no change in the voting patterns of the six members. The tone of the policy review appeared sanguine on domestic inflation and cautious on growth, with a view to not sacrificing the latter in a futile attempt to control imported inflation.

– Aditi Nayar, Chief Economist at ICRA

In our assessment, we are not behind the curve; our domestic economic factors are different from rest of world.

– RBI Governor Shaktikanta Das

As far as cryptocurrencies is concerned, the RBI stance is very clear. Private cryptocurrencies are a big threat to our financial and macroeconomic stability. They will undermine RBI’s ability to deal with issues related financial stability. I think it is my duty to tell investors that what they are investing in cryptocurrencies, they should keep in mind that they are investing at their own risk. They should keep in mind that these cryptocurrencies have no underlying (asset). Not even a tulip!: RBI Governor Shaktikanta Das

RBI Deputy Governor T. Rabi Sankar on Central Bank Digital Currency (CBDC)

I won’t spell out a particular level for government bond yields. But our actions will show what yield level we are comfortable with. One must keep in mind that NHAI is not borrowing from market in FY23, as per Budget. The government will support it with around Rs 65,000 crores. Further, I have heard that small savings collections can be higher. These factors should be kept in mind when talk of the government’s market borrowing. But let next financial year come first: Governor Shaktikanta Das

Work on Central Bank Digital Currency is ongoing. Once the law, as proposed, is amended, we can go ahead with our proofs of concept and pilot projects: RBI Deputy Governor T. Rabi Sankar

We can’t give a timeline on CBDC. But what I can say is that whatever we are doing, we are doing it very carefully and cautiously. We have to keep risks like cyber-security and counterfeiting in mind. So we are proceeding cautiously and can’t give a timeline: Governor Shaktikanta Das

Key points from RBI Governor’s presser

Here’s what RBI’s Deputy Governor Michael Patra said:

It is not a question of either fiscal or monetary policy. Fiscal action is calibrated. They (government) have expanded capital expenditure. I can see fiscal consolidation. They are on a particular roadmap. It is coordinated action between fiscal and monetary policy. It is not like we pass on the baton to another, says RBI Governor

Our inflation projections are benchmarked to international crude oil prices. We have examined various senarios of where oil prices could be: Governor Das

The way we handle the government borrowing, that reflects the RBI’s approach. Now, the yield curve has gone up, yes. Perhaps, I don’t know, the market was judging that the inflation trajectory would be much higher. But we have given our inflation trajectory today… The way we deal with G-Sec auctions, that reflects the thinking of the Reserve Bank: Governor Shaktikanta Das

Inclusion in global bond indices can work in both ways. This is precisely the reason the RBI and the government is taking a very calibrated approach on this: Governor Shaktikanta Das

We have constant interactions with the bond market. Whether they have an inherent reluctance (to bid at weekly G-Sec auctions), you have to ask them… At least me and my colleagues have not seen any sign of “discomfort”: Governor Shaktikanta Das

We expect a smooth re-balancing of liquidity conditions. Our actions have been very seamless and not caused any volatility. So I do not see any undue volatility in money markets: RBI Deputy Governor Michael Patra

Main points from Shaktikanta Das’ presser

Monetary policy has to be supportive to ensure growth is sustainable

– RBI Governor

The repo and reverse repo rate represent a particular stance. At the current juncture, when stance continues, there is no reason to make any changes or tamper with rates, says Das

Inherent growth momentum is positive, says RBI Governor

The somewhat comfortable inflation trajectory provides RBI space to withdraw monetary support only gradually and reduces the need of any sudden tightening actions. We expect the RBI to support growth and raise the repo rate only by the August policy once there are greater signs of a more even recovery.

– Sakshi Gupta, senior economist at HDFC bank in Gurugram

MPC Highlights

It looks like interest rates on home loans, car loans are unlikely to go higher this year, says SBI chairman Dinesh Kumar Khara.

It seems the RBI gauged that markets need to be assuaged over material tightening of financial conditions ahead as global dynamics change, and decided to stay put

– Madhavi Arora, lead economist, Emkay Global Financial Services

Impact on loans

Markets cheer as Das refuses to “rock the boat”

Consistency maintained in Budget as well as monetary policy. Expect bond yields to cool down further post monetary policy announcement

– SBI chairman Dinesh Kumar Khara

Rupee slips 21 paise to 75.05 against US dollar in early trade

Growth and inflation outlook

MPC Meet: Key points

Closing Remarks

E RUPI digital voucher cap raised

Overall system liquidity in large surplus even though it has moderated, says Das

RBI would continue to insulate domestic economy from global spillovers

– RBI Governor Das

Breaking| Limit for inflows under the Voluntary Retention Scheme hiked to Rs 2.5 lakh crore from Rs 1.5 lakh crore. Move will provide additional sources of capital for domestic debt markets, including government securities.

VRR and VRRR of 14 day tenor – will operate as main liquidity management tool

Capacity utilisation is rising, aiding in investment demand. RBI maintains CPI inflation forecast of 5.3 percent for FY22. RBI forecasts FY23 CPI inflation at 4.5 percent. RBI forecasts Q1FY23 CPI at 4.9 percent, Q2 at 5 percent, Q3 at 4 percent and Q4 at 4.2 percent. CPI is in-line with expectations and food prices easing to add to the optimism, Hardening crude oil prices is a major upside risk. Transmission of costs remains muted on slack in demand. Banks should strengthen governance and risk management, says Governor Shaktikanta Das

Big worry: Bonds take a hit

Decoded: Inflation target

Inflation Target

The real GDP growth is projected at 7.8% for FY 2022-23: RBI Governor Shaktikanta Das

We have made effort to limit disruption to economic activity. While CPI edged higher, it is along expected lines. Core inflation remains elevated and headline inflation is expected to peak in Q4FY22, and turn moderate in H2GY23. Continued policy support is warranted for durable, broad-based recovery, says RBI Governor Shaktikanta Das

Reserve Bank of India keeps repo rate unchanged at 4%, maintains accommodative stance; reverse repo rate remains unchanged at 3.35%

India to grow at fastest pace in world, says RBI Governor

Pandemic holds world economy hostage once again, sas Shaktikanta Das

MPC should focus on disconnection between market rates and policy rates, inflation outlook, especially with rising oil price

– Soumyajit Niyogi, associate director at India Ratings

Borrowing Loads

MF industry is hoping the RBI will up investing threshold for international schemes. The prime focus of markets is that as long as the currency is behaving, the RBI won’t be under huge pressure to ease aggressively, says Christopher Wood.

Here’s what ET Poll says

This time, the monetary policy is expected to take a call on growth in particular as the budget is sanguine about the same. This stance will be a pre-requisite for the commencement of the plans for liquidity normalisation.

– Madan Sabnavis, chief economist at Bank of Baroda

RBI MPC maintained status quo in its December meeting. How have key metrics changed since then?

Markets would be looking forward to assurance and support from RBI to ensure that the massive borrowing program goes through smoothly

– Anand Nevatia, fixed-income fund manager at Trust Mutual Fund

Markets Update

Current status

Two key concerns are likely to weigh in — the future of fiscal-monetary policy coordination in light of an expansionary budget in India and the potential impact of imminent rate hikes and quantitative tightening by the U.S. Fed

– Aastha Gudwani, economist at Bank of America

Meanwhile, a missive from Deloitte

Growth Pangs

Before the budget, I was looking at a 20 basis point hike in the reverse repo rate in the February meeting, but now the risk is that they will push it out to the next meeting.

– Pranjul Bhandari, HSBC