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RBI monetary policy: Rates kept unchanged for continued support to economy

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3 years ago

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RBI monetary policy: Rates kept unchanged for continued support to economy

The Reserve Bank of India’s Monetary Policy Committee (MPC) kept key interest rates unchanged for the tenth consecutive meeting on Thursday, maintaining an accommodative stance amid threats surrounding Omicron’s coronavirus variant.

Reserve Bank of India Governor Shaktikanta Das said in a statement after a three-day meeting of the Mumbai Committee that the repo and reverse repo rates remained unchanged at 4% and 3.35%, respectively.

“India is charting a different recovery path than the rest of the world to become the fastest growing economy,” Das said.

Das said the six-member rate committee, which has been suspended since August 2020, maintained its accommodative policy stance by a 5-1 vote, suggesting the economy needs continued support despite accelerating inflation. While maintaining his accommodative stance, he reiterated the “as long as necessary” phraseology used since October 2019.

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“Monetary policy actions will be calibrated and clearly communicated,” Das said, stressing that there would be no surprises.

The central bank has cut repo rates by a total of 115 basis points (bps) since March 2020 to soften the blow from the coronavirus pandemic and draconian containment measures. That rate is now 250 basis points below where it was at the start of the easing cycle in early 2019.

The Reserve Bank of India lowered its inflation outlook for the next fiscal year to 4.5% from 5.3% this year. The central bank expects gross domestic product growth to slow to 7.8% in the next fiscal year, down from the government’s 9.2% estimate for this year.

“Given the comfort from the inflation and growth outlook, especially the improved inflation outlook, and the uncertainty associated with omicron and global spillovers, the MPC believes that continued policy support is necessary for a durable and broad recovery,” Das said, according to Bloomberg.

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Respondents in the Feb. 2-4 Reuters poll were split on the timing of the next rise, with 17 of 32 respondents slightly more than half expecting a 25 basis point rise to 4.25% in April.

Of the remaining 15, 13 were nearly split between June and August. Only one economist said it would happen as early as the beginning of this month, while another said it would happen in October of this year.

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Oppn seeks probe into Adani charges in US: ‘Obvious protection of PM Modi’

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24 hours ago

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November 21, 2024

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Oppn seeks probe into Adani charges in US: ‘Obvious protection of PM Modi’

Following US SEC charges of bribery against Gautam Adani, opposition parties criticise PM Narendra Modi and call for a JPC investigation.

As billionaire Gautam Adani faces charges in the US for alleged bribery and fraud, the Opposition on Thursday intensified its attack on the Centre over its alleged links with the Adani Group.

Gautam Adani has been charged in the US with allegedly paying $250 million in bribes to Indian officials between 2020 and 2024 to secure favourable terms for solar energy contracts. The scheme, prosecutors said, could have earned Adani’s group over $25 billion in profits.

Congress demands JPC probe

Reacting to the charges, the Congress called for a Joint Parliamentary Committee (JPC) probe into alleged scams involving Adani’s conglomerate. The party also demanded the appointment of a “new and credible” Sebi chief to investigate Adani’s financial dealings and compliance with securities laws.

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ALSO READ- At 65.2%, Maharashtra records highest voter turnout since 1995 assembly election

Congress leader Jairam Ramesh said the US Securities and Exchange Commission’s (SEC) actions highlight the failure of Indian institutions to investigate the group. “The indictment vindicates Congress’s demand since January 2023 for a JPC into the Modani scams,” Ramesh wrote on X.

He accused Prime Minister Narendra Modi of shielding Adani and claimed Congress’s “Hum Adani Ke Hain Kaun” (HAHK) series had exposed the businessman’s alleged fraud and his ties with the PM.

The fact that it has taken a foreign jurisdiction to properly investigate Adani only shows how Indian institutions have been captured by the BJP, and how decades of institutional development have been undone by greedy and power hungry leaders, the Congress leader said in another post.

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“All of this is consistent with a long record of fraud and criminality carried out with impunity with the obvious protection of the Prime Minister,” Ramesh charged.

Other Oppn leaders join attack

Other opposition leaders joined the attack. Trinamool Congress MP Saket Gokhale questioned the BJP’s involvement in Adani’s dealings and demanded an independent judicial probe.

Aam Aadmi Party leader Sanjay Singh accused PM Modi of allowing Adani to tarnish India’s global reputation.

ALSO READ- Adani Group shares plunge after US SEC charges, Adani Green down 16%

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Adani stocks latest updates

The allegations rattled markets, with Adani Group stocks plunging. Adani Enterprises fell 20 per cent in pre-open trade, while shares of Adani Ports, Adani Green, Adani Power, and others dropped between 7 per cent and 18 per cent.

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