Key takeaways from the minutes of the Monetary Policy Committee (MPC)

The Monetary Policy Committee (MPC) minutes leading up to the credit policy were published by the RBI on 22nd February 2017. The MPC minutes are critical because they give a deep insight into the thinking of the 6 MPC members and the evolution of the monetary stance of the RBI. While the RBI in its Feb 08th policy chose to maintain status quo on rates, the big news was that the RBI had shifted its monetary stance from “Accommodative” to “Neutral”. Here are the key takeaways from the minutes of the MPC meeting… Continue reading

Monetary Policy Announcement and its broader implications

The Monetary Policy announced by the RBI on 08th February was largely along expected lines. One needs to understand the context in which the policy was announced. On the one hand, the Indian economy is just about emerging from the cash shortfall caused by the demonetization. On the other hand, inflation continues to stay under control and IIP and core sector are showing green-shoots of recovery. The global scenario is the bigger question mark. BREXIT is raising serious questions over the sustainability of the common currency model while the UK still does not have clarity on its trade strategy post BREXIT. Above all, the US is increasingly making protectionist noises even as Indian companies are already under pressure due to recent measures like H1-B visa restrictions, immigration checks and a likely border tax on outsourcing. It is in this highly charged atmosphere that the Monetary Policy was announced by the RBI… Continue reading

Why the Decision of the MPC to Not Cut Rates was a Good Decision

The markets were largely disappointed by the decision of the Monetary Policy Committee (MPC) to maintain status quo on rates. The expectation was for a 25-50 bps cut in rates. However, the choice of the MPC not to cut rates was a good decision in retrospect. Here is why… Continue reading

5 Factors that will drive the Policy Stance of Monetary Policy Committee

The RBI Monetary Policy Committee (MPC) will commence its 2-day meeting on 05th December which will conclude on 06th December. The outcome of the deliberations will be captured on December 07th in the form of the Monetary Policy. This policy becomes interesting in a variety of ways. Apart from the global circumstances under which this policy is being announced, the domestic liquidity shortfall will also be a significant factor. Continue reading

Key takeaways from the December 2016 Monetary Policy

The RBI monetary policy announced on December 07th 2016 had an element of surprise in that it maintained status quo on repo rates. Considering the low levels of inflation, weak growth and the side effects of demonetization, the markets were expecting a rate cut in the range of 25-50 bps. However, the RBI chose to err on the side of caution.. While the details of the deliberations of the Monetary Policy Committee (MPC) will be available on December 21st, there was virtual unanimity on the decision to maintain status quo on rates. Here are the key highlights of the monetary policy announcement… Continue reading

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