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RBI monetary policy today: What impact it will have on your money



The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) will announce its resolution under the first bi-monthly monetary policy statement for 2019-20 on Thursday. Economist and analysts expect a rate cut. The central bank is also expected to take a relook at its inflation numbers, growth target and the liquidity framework. Here is what you need to watch out in the RBI monetary policy announcement and its impact your money:

A cut in benchmark rates likely

Most economists predict a 25 basis points (bps) cut in repo rate, according to a Bloomberg survey. One bps is one-hundredth of a percentage point. Repo rate, the key policy rate, is the rate at which the central bank lends money to the banks. “Our base case expectation is of a 25 bps repo rate cut along with a dovish commentary to suggest more room to cut in the coming months,” said Arvind Chari, head –fixed income and alternatives, Quantum Advisors Pvt. Ltd.

The impact: A cut in repo rate can translate into cheaper loans. However, in the previous monetary policy, though the RBI had cut key policy rate by 25 bps to 6.25%, transmission continued to remain a problem. Considering the way floating rates are structured linked to marginal cost of funds based lending rate (MCLR), if you are an existing borrower you will not see an impact due to the reset clause. If you are a new borrower, you are likely to benefit from the rate cut.

RBI to address inflation, growth and liquidity

The apex bank’s inflation expectations continue to remain high despite low food prices. “In the last policy, RBI has estimated inflation for Q4FY19 at 2.8% which is likely to be breached on the downside, with January-February 2019 inflation at 2.3%. On the growth front, index of industrial production number, eight core data and auto sales has continued to show slack growth,” said Vinay Khattar, head of research, Edelweiss Financial Services in a note. Another concerning is liquidity in the system. “Despite RBI’s continued open market operations and the dollar-rupee swap, systemic liquidity as of March-end is in deficit. The tight liquidity is visible in high credit-deposit ratio and elevated corporate bond spreads. RBI’s commentary on liquidity should be closely watched,” said Khattar.

The impact: Despite rate cut, if the liquidity remains to be tight, you will not see any change in the deposit rate. Considering that tight liquidity is visible in high credit-deposit ratio, depositors haven’t seen a change in rates yet. If liquidity eases, you will see your FD rate fall.

Linking external benchmark rate to loans yet to happen: The RBI has in its December policy announcement had said that it is considering linking external benchmark rate such as olicy repo rate, 91 days treasury bill yield, 182 days treasury bill yield or any other benchmark market interest rate produced by the Financial Benchmarks India Pvt. Ltd to your home loan, car loans and personal loan instead of using MCLR. However, in the February policy announcement, the RBI said the proposal is under review. RBI governor Shaktikanta Das had then said it is currently under examination.

The impact: Even before the RBI’s announcement, State Bank of India, the country’s largest lender, has already linked external benchmark rate to its short-term loans and savings account above Rs 1lakh. If you loans get linked to external benchmark rate, you will see interest rate on your loans move faster than it does currently. Banks will also look at linked deposit rates to external benchmark rates.



Breaking News: Silicon Valley Bank’s Collapse Sends Shockwaves Through Financial World – Is India’s Banking System Next to Crumble?



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Are Indian Banks Ready to Face the Heat of Rising Interest Rates?

As Silicon Valley Bank (SVB) faces the heat of collapsing amidst rising domestic interest rates, Indian banks are left wondering if they are next in line. With the Indian economy still recovering from the COVID-19 pandemic, the prospect of rising interest rates could lead to a devastating blow to the country’s banking sector. Will Indian banks be able to weather the storm or will they collapse like SVB?

Indian banks have already faced a tumultuous few years with multiple frauds and defaults taking place, leaving many questioning their resilience. With the Reserve Bank of India (RBI) indicating that it may hike interest rates in the near future, the pressure on Indian banks is set to increase. The question remains – are Indian banks prepared to face the heat of rising interest rates or will they buckle under the pressure? Only time will tell.

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Delhi: Businesses can now remain open 24×7, over 300 applications cleared by L-G



Photo by Rehan Fazal on Unsplash

From restaurants to transport services and BPOs to online delivery services, all those who apply for exemptions will be allowed to operate 24×7 in Delhi starting next week, with Lieutenant Governor V K Saxena approving the proposal to exempt 314 such places to operate all day long, some of them pending since 2016, officials said.

“The L-G has directed that notification to this effect be issued within seven days. The decision of providing exemption under Sections 14, 15 & 16 of the Delhi Shops & Establishment Act, 1954, is expected to boost employment generation and promote a positive and favorable business environment that is a prerequisite for economic growth. The decision will also provide a fillip to the much desired ‘nightlife’ in the city,” said an official.

Source: IndianExpress

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Swiggy Instamart figures, Mumbaikars ordered 570 times more condoms in the last one year



Customers are also ordering medical-related things through online shopping platforms. In metros like Mumbai, Hyderabad, Delhi, and Bangalore, people are buying goods online in large numbers. People living in metro cities including Bengaluru, Delhi, and Mumbai ordered an average of 6 million eggs in the last year.

These days people are doing online shopping fiercely in the country. Through Grocery Service Platforms, the goods of need are easily reaching people’s homes. From vegetables to medicines, just a few clicks on the smartphone are reaching people’s doorsteps. According to a survey, Swiggy Instamart has provided service to more than 9 million users between June 2021 and June 2022. In metros like Mumbai, Hyderabad, Delhi, and Bangalore, people are buying goods online in large numbers.

Healthcare products orders

Customers are also ordering medical-related things through online shopping platforms. According to a survey, Mumbaikars have ordered 570 times more condoms in the last 12 months. At the same time, in 2021, Instamart received orders for about two million sanitary napkins, menstrual cups, and tampons. Apart from this, a lot of orders have also been received for grocery items.

56 lakh packets of noodles ordered

According to the survey, between April and June last year, there was a 42 percent increase in the demand for ice cream in these metro cities. It was also learned that most of the orders were placed after 10 pm. In metro cities, people have ordered 5.6 million packets of instant noodles. In Hyderabad, users ordered around 27,000 bottles of fresh juice during the summer months.

60 lakh eggs ordered

The demand for eggs has increased manifold in the last two years. People living in metro cities including Bengaluru, Delhi, and Mumbai ordered an average of 6 million eggs in the last year. According to the report, customers from Bangalore and Hyderabad ordered the maximum number of eggs for breakfast. At the same time, people of Mumbai, Jaipur, and Coimbatore have ordered the maximum number of eggs online at the time of dinner.

Demand for dairy products

There has been a huge jump in orders for both tea and coffee. According to the report, there has been an increase of 2,000 percent in its demand. At the same time, 3 crore orders of milk have come for milk. People from Bangalore and Mumbai have placed more orders in the morning. Regular milk, full cream milk and toned milk are the most ordered dairy products.

Ordering fruits and vegetables

Orders for 62,000 tonnes of fruits and vegetables have been received in the last year. With 12,000 orders, Bengaluru tops the list of organic product buyers. At the same time, Hyderabad and Bangalore together have ordered more than 290 tonnes of green chilies in 12 months. Over 2 lakh orders have been received for bathroom cleaners, scrub pads, drain cleaners, and more in the last year.

Source: Aajtak

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