India unexpectedly cuts key rate, changes stance to neutral

Home auto loans set to be cheaper as RBI Governor Shaktikanta Das cuts interest rates by 0.25

Home auto loans set to be cheaper as RBI Governor Shaktikanta Das cuts interest rates by 0.25

He sees upside risks to inflation, which may prevent the central bank to cut rates this time around.

The Monetary Policy Committee (MPC) on February 7 changed its stance to neutral from calibrated tightening as expected, but what came as a surprise to the Street was a rate cut of 25 bps which most global brokerages think is just the beginning of easy monetary policy cycle.

The ruling Bharatiya Janata Party is already in an election mode. The MPC has also made a decision to change the monetary policy stance from "calibrated tightening" to "neutral".

India's last rate cut, to 6.00 percent, was in August 2017.

Commenting on the RBI rate cut, Ankur Dhawan- Chief Investment Officer-PropTiger.com, said "Industry was expecting a bigger rate cut than announced".

The rate cut is in the right direction given that the inflation footprint has been benign for some time. "It also signals a commitment to a symmetric policy to achieve its 4 per cent inflation target - a departure from the RBI's previous one-sided, conservative stance that aimed to keep inflation below the target."- Abhishek Gupta, Bloomberg Economics.

"The central bank's commentary on inflation and growth support a dovish outlook for the policy", said Shashank Mendiratta, an economist with IBM in New Delhi, adding "The macro backdrop as such supports the RBI's stance".

Sala: Nantes launch legal bid to force Cardiff to pay £15m
Cardiff are "surprised" that Nantes have made the demand while recovery attempts are still being carried out. Cardiff will honor the deal but have been reluctant to make a payment until they know " all the facts ".

India's core inflation was pegged at around 5.7 percent in December.

Some economists said Das, a seasoned bureaucrat, is likely to promote growth and aid the fragile financial sector, as inflation is comfortable at present, in December dropping to an 18-month low of 2.19 percent.

Economic growth fell to a worse-than-expected 7.1% in the July-September quarter from 8.2%, dragged down by slower consumer spending and farm growth, below analysts forecast for a 7.4% increase.

The six-member monetary policy committee, headed by RBI Governor Shaktikanta Das, changed the policy stance to "neutral" from "calibrated tightening".

The decision "restores growth maximisation as a secondary objective of the RBI". Earlier, when Urjit Patel took charge as the RBI Governor, he shifted from the usual practice of announcement at 11 am and presented the fourth bi-monthly (his maiden) monetary policy review at 2:30 pm after the MPC meeting. "Going by the guidance, there is room for a further rate cut".

The Indian rupee weakened to 71.69 to the dollar immediately after the announced but strengthened soon after to 71.42.

Recommended News

  • Toronto Raptors Acquire Marc Gasol In Trade With Memphis Grizzlies

    Toronto Raptors Acquire Marc Gasol In Trade With Memphis Grizzlies

    Gasol has played his entire career with the Grizzlies since entering the National Basketball Association in 2008. Valančiūnas had previously weighed in on trade discussion stating that he wished to stay in Toronto.
    India opt to bowl; No Mithali in XI

    India opt to bowl; No Mithali in XI

    "Of course, this format demands aggressive batting and I'll try to display it tomorrow and in the further matches", Dhawan added. They beat India 2-0 in the 2008-09 in the sole bilateral series played on New Zealand soil till date.
    ‘Young and the Restless’ star Kristoff St. John found dead at 52

    ‘Young and the Restless’ star Kristoff St. John found dead at 52

    Mia and Kristoff St John later filed a civil lawsuit against the psychiatric facility claiming negligence in their son's death. In September, he shared a photo of the engagement ring on his Instagram account with the photo caption "She said yes".
  • BTS at the Grammy Awards as first K-pop presenter and nominee

    BTS at the Grammy Awards as first K-pop presenter and nominee

    Performers of the night at the "61st Annual Grammy Awards " include Camila Cabello , Cardi B , H.E.R. Rapper Cardi B , pop diva Lady Gaga and folk-rock singer Brandi Carlile have nabbed key nominations.
    Instagram Egg Partners with Hulu for Post-Super Bowl Event

    Instagram Egg Partners with Hulu for Post-Super Bowl Event

    Mr Godfrey has since enlisted the help of two friends Alissa Khan-Whelan, 26 and CJ Brown, 29, to help run the egg account. The spot aired on Hulu following the Super Bowl on February 3, according to TechCrunch . "We got this", the PSA read.
    Kristaps Porzingis on New York Knicks fans:

    Kristaps Porzingis on New York Knicks fans: "Stay woke"

    Knicks GM Scott Perry said the Knicks were aware of Porzingis' displeasure with the direction of the franchise in recent weeks. It could be a franchise-defining summer for the Knicks as they could also have enough cap space to go after a top free agent.
  • Blazers get Hood; send Stauskas to Cavs

    Blazers get Hood; send Stauskas to Cavs

    Baldwin, the No. 17 pick by the Memphis Grizzlies in 2016, has mostly played a deep reserve role for Portland. He tied his career-high with 24 points in a season-opening win over LeBron James and the Los Angeles Lakers .
    Apex Legends hits one million players in less than a day

    Apex Legends hits one million players in less than a day

    For more on Apex Legends , check out the official launch trailer and a gameplay deep dive trailer . Titanfall 3 is also likely in the works, although there's no word on when we'll see it.
    Pelicans reportedly 'most covet' potential trade packages from Celtics

    Pelicans reportedly 'most covet' potential trade packages from Celtics

    But the team chose to sit him Monday night, despite Davis "eagerly wanting to suit up", according to Yahoo Sports' Chris Haynes . Davis reportedly wanted to suit up after missing seven games with a finger sprain before team executives denied his efforts.
  • Democrats Cope With State Of The Union By Acting Out

    Democrats Cope With State Of The Union By Acting Out

    Schumer took to the Senate floor ahead of Trump's speech and argued for 10 minutes the current state of the country is "chaos". Meanwhile, Democrats are sending a message with their invited guests , especially those who are running in the 2020 election.
    LeBron returns, Lakers down Clippers in OT

    LeBron returns, Lakers down Clippers in OT

    Lou Williams scored 24 points off the bench to lead the Clippers, who had won 22 of their previous 25 matchups against the Lakers. LeBron James says he played more than he expected as the Lakers needed an extra period to dispose of the Clippers.
    Body found amidst plane wreckage

    Body found amidst plane wreckage

    According to Sky News , Sala's family have been informed that the plane was found this morning after an underwater search. Sala´s father Horacio spoke of his shock from his home in Progresso, Argentina , telling Cronica TV: "I can´t believe it.

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.