NEW DELHI: India Ratings on Wednesday lowered the country's growth forecast to six-year low of 6.7 per cent for the current fiscal from an earlier estimate of 7.3 per cent on account of slowdown in consumption and moderation in industrial growth among other factors. This would be the third consecutive year of subdued growth, India Ratings principal economist Sunil Kumar Sinha said here. Even on quarterly basis, he said, April-June is expected to be the fifth consecutive quarter of declining GDP growth at 5.7 per cent. Citing factors for moderation in growth, he said, it is mainly due to five reasons including a slowdown in consumption demand and manufacturing and delayed, uneven progress of monsoon so far. Besides, he said inability of Insolvency and Bankruptcy Code to resolve cases in a time-bound manner, and rising global trade tension adversely impacting exports are pulling down GDP numbers. At this pace of growth, the target of USD 5 trillion by 2024-25 seems to be a far cry, he … [Read more...] about India Ratings Cut GDP Forecast To 6.7 Per Cent For FY20
Rate cut appropriate if jobless rate rises
The Monetary Policy Committee (MPC) unanimously decided to keep repo rate unchanged at its sixth bi-monthly meeting. On December 5, all the six MPC members voted in favour of a pause, leaving repo rate unchanged at 5.15 percent.The move came as a shocker to investors as most expected the RBI to cut interest rates, which has been lowered by 135 basis points in five back-to-back cuts since February 2019.In this episode of Editor’s Take, Moneycontrol’s Shraddha Sharma talks to Deputy Executive Editor Ravi Krishnan to find why the MPC members were in favour of a pause, why the move shocked investors, and what could have happened if the RBI had decided to cut rate.Close Watch the video for more.Are you happy with your current monthly income? Do you know you can double it without working extra hours or asking for a raise? Rahul Shah, one of the India's leading expert on wealth building, has created a strategy which makes it possible... in just a short few years. You can know his … [Read more...] about Editor’s Take | Would a rate cut make any difference?
Greenland may be a remote and scarcely populated island, but, as a new study highlights, deep environmental changes happening there are having consequences for the entire globe. Although it's well known that this ice has been gradually melting over time — adding 1.3 millimeters (about .05 of an inch) to global sea levels each year — researchers have now confirmed that the melt is accelerating at an alarming rate. The new report, published on Wednesday in Nature, maps the pace of the melting ice over 350 years. It shows that melting has rapidly increased over the last few decades — it is 50 percent faster today than it was in the preindustrial era. Read more: Arctic warmer than much of Europe is a worrying sign of climate change Using drills, researchers extracted ice cores from the Greenland ice sheet 'Unprecedented' melt While we know that Earth is warming and its frozen regions are melting, so far it hasn't been clear … [Read more...] about Greenland ice sheet melting at ‘exceptional’ rate
The central bank is in no hurry to keep reducing interest rates that could end up being wasted. But it would work to ensure that the transmission turns more effective since much needs to be passed on. The Reserve Bank justified its decision pause its policy rate action by maintaining the repo rate at 5.15 per cent. This was not in line with the market consensus which expected a 25 bps (one bps is 0.01 per cent) reduction of the benchmark policy repo rate by the central bank. “Several measures already initiated by the government and the monetary easing initiated by the Reserve Bank since February 2019 are gradually expected to further feed in the real economy” said RBI governor Shaktikanta Das at its post policy media briefing on Thursday. “ The impact of external benchmarking by bank will further play out in the coming days and months” The central bank expects that the forthcoming union budget will also provide better insight into further measures to be … [Read more...] about RBI to see full pass through of previous rate cuts before taking any action
The Reserve Bank of India (RBI) defied expectations by keeping its policy rate unchanged at 5.15% even as it downgraded its growth projection for the year to 5% — an indication, experts said, that the central bank either understands the limited role of monetary interventions in reviving growth or wants to wait till banks pass on the earlier cuts or both. They added that RBI may have also turned cautious because of a recent spike in inflation. The move surprised many, with the consensus opinion ahead of the policy being that RBI would continue to ease interest rates to revive growth. Gross Domestic Product (GDP) growth for the three months ended September came in at 4.5%, the lowest since March 2013.Still, RBI, which has thus far cut rates by 1.35 percentage points since February 2019, hinted that it did have room to cut rates in the future if required. RBI’s monetary policy committee (MPC) cut policy rates for five consecutive meetings till … [Read more...] about RBI holds rate,slashes growth forecast to 5%
Aditi NayarContrary to expectations, the Monetary Policy Committee (MPC) kept the repo rate unchanged at 5.15 percent in the December 2019 policy review, in a unanimous decision. The sharp upward revision in the CPI inflation projections outweighed the concerns related to economic growth.Moreover, the delayed and incomplete transmission of the cumulative repo rate cuts of 135 bps, particularly to bank lending rates and small savings schemes, as well as the measures to support growth that may be announced in the upcoming Union Budget, prompted the Committee to pause. Nevertheless, the MPC reiterated that the stance will remain accommodative as long as it’s necessary to revive growth, which suggests that a further rate cut should not be ruled out.Close The sharp rise in the retail inflation in October 2019, led by the temporary flare-up in vegetable prices, as well as an increase in prices of protein items and sugar which may prove to be more enduring, has been accompanied by a … [Read more...] about Monetary Policy | Inflation, transmission issues took rate cut off the table