What to Expect From RBI MONETARY POLICY

As the Reserve Bank of India (RBI) is all set to meet for its bi-monthly Monetary Policy in the first week of August 2017, the market participants have been wondering if RBI chooses to cut the benchmark interest rate. There seem to be numerous good factors for the interest rate cut.

1. India CPI (Consumer Price Index) inflation data came down to 1.5% for Jun’17.
2. Food CPI came down to -2.12% in June.
3. The IIP (Index of Industrial Production) data also came down – mainly due to decline in mining activities.
4. Core CPI (ex-commodities) came in at 4% YoY.
5. Indian Rupee also appreciated since the beginning of the year.
6. Monsoon performance has been very good. Average or above average monsoon rainfall in the country may further bring down the food prices.
7. GST rates were neutral to the inflation outcome.
8. IMF (International Monetary Fund) expects India’s economy to grow at a higher level of 7.2%.

What RBI Did In Its Last Policy

RBI in its last policy meet (June 2017) had left the Repo rate unchanged at 6.25%, Reverse repo rate at 6%. Here are the rates as per RBI’s second bi-monthly Monetary Policy Statement for 2017-18 announced on 7th June 2017.

FinBlab View –

The above mention numbers and data clearly suggest that there may be a rate cut in the coming Bi-monthly Monetary Policy of RBI on 2nd of August. But still, the FinBlab view is that RBI Governer will remain silent in the up-coming policy and there is a low probability for a rate cut.

Disclaimer: The contents and data presented here are just for your information & personal use only. While much effort is made to provide the information, I ( Vishal Dalwadi ) or “Fin Blab” do not guarantee the accuracy, correctness, completeness or reliability of any information or data displayed herein and shall not be held responsible.

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What to Expect From RBI

The Reserve Bank of India (RBI) is expected to maintain silent on the key rates in its bi-monthly monetary policy announcement because of (i) Implementation of GST and (ii) Inflation.

• The proposed implementation of Goods and Service Tax (GST) from July 1, 2017, and it is likely that the RBI may wish to hang around and watch the implementation of GST and its effect on the economy before taking any action on the change in the key policy rates.
• The retail inflation number which is not all that troubling for the RBI as it has been at the level of 3% (i.e. 2.99%). Similarly, WPI inflation has also eased to a 4-month low of 3.85% in April 2017, according to the new series.

What RBI Did In Its Last Policy

RBI in its last policy meet (April 2017) had kept the Repo Rate unchanged and increased the Reverse Repo Rate. Here are the rates as per RBI’s first bi-monthly Monetary Policy Statement for 2017-18 announced on 6th April 2017.

FinBlab View –

RBI will be keen to watch on (1) The impact of GST on prices (if implemented from 1st July) and (2) How the monsoon will progress (though India Meteorological Department has predicted good monsoon this year) and other related issues to cut rates at the August 2017 meeting. But for now there in low expectation from RBI to cut rates.

Disclaimer: The contents and data presented here are just for your information & personal use only. While much effort is made to provide the information, I ( Vishal Dalwadi ) or “Fin Blab” do not guarantee the accuracy, correctness, completeness or reliability of any information or data displayed herein and shall not be held responsible.

The post RBI MONETARY POLICY MEET: JUNE 2017 appeared first on Upcoming ipos: Latest news on stocks, economy & finance.