Highlights

Good Articles to Share

Author: Tan KW   |   Latest post: Fri, 22 Feb 2019, 11:00 AM

 

India central bank surprises with a rate cut, changes stance to neutral

Author:   |    Publish date:


MUMBAI: India's central bank on Thursday unexpectedly lowered interest rates and, as anticipated, shifted its stance to "neutral" from "calibrated tightening" to boost a slowing economy after a sharp fall in the inflation rate.
 
The monetary policy committee (MPC) of the Reserve Bank of India cut the repo rate by 25 basis points to 6.25 percent, as predicted by only 21 of 65 analysts polled by Reuters. Most polled respondents expected the central bank to only change the stance, to neutral.
 
Four of six members of the MPC voted to cut the rates, while all six voted for a change in the stance.
 
"Investment activity is recovering but supported mainly by public spending on infrastructure," the MPC said in a statement. "The need is to strengthen private investment activity and buttress private consumption."
 
Rupa Rege Nitsure, chief economist at L&T Financial Services, called the central bank moves "the perfect policy response in the current circumstances."
 
Indian shares pared gains while 10-year bond yields slid 5 basis points after the surprise rate cut.
 
The Indian rupee weakened to 71.69 to the dollar immediately after the announced but strengthened soon after to 71.42.
 
The NSE index was up 0.04 percent at 11068.05 while the 10-year benchmark government bond yield fell to 7.51 percent from Wednesday's close of 7.56 percent.
 
India's last rate cut, to 6.00 percent, was in August 2017.
 
Thursday's cut is welcome news for Prime Minister Narendra Modi's government, which wants to boost lending and lift growth as it faces elections by May.
 
The ruling Bharatiya Janata Party is already in an election mode. In its budget on Feb. 1, the government doled out cash to farmers and tax cuts to middle-class families, at the cost of a wider fiscal deficit and larger borrowing.
 
Economic growth fell to a worse-than-expected 7.1 percent in the July-September quarter from 8.2 percent, dragged down by slower consumer spending and farm growth, below analysts forecast for a 7.4 percent increase.
 
- Reuters 
Share this

  Be the first to like this.
 


FEATURED EVENT
 

163  411  489  1096 

ActiveGainersLosers
Top 10 Active Counters
 NameLastChange 
 IWCITY 0.64+0.05 
 SAPNRG 0.32-0.005 
 AAX 0.27-0.02 
 VS 0.99-0.03 
 SAPNRG-WA 0.1050.00 
 HSI-C3W 0.425-0.015 
 DNEX 0.335+0.01 
 SEACERA 0.3550.00 
 TATGIAP 0.10+0.01 
 HSI-H4Y 0.1650.00 

SPONSORED POSTS

1. Investment Bloggers Day 2019 MQ Trader Announcement!

TOP ARTICLES

1. PANTECH(5125) OR ALL-TECHNOLOGY STOCK IN THE OIL AND GAS SUPER BOOM TIME, CALVIN TAN RESEARCH THE INVESTMENT APPROACH OF CALVIN TAN
2. Why a second Special Dividend and more - Airasia Windfall Profit
3. The Bonuses of Airasia Windfall Profit
4. DIALOGUE (O&G Stock) : Will This Be Another QL RESOURCES DUTCH LADY OR NESTLE, Calvin Tan Research THE INVESTMENT APPROACH OF CALVIN TAN
5. This company got 5G network prospect + Mahathir factor, ready to punch all the way into glorious moment again Target Invest - We Target, We Invest
6. Price of Airasia Windfall Profit
7. FPI - Earnings dragged by higher operating cost (HLIB maintain BUY rating with TP of RM2.22) FPI 2大因素前景看好台灣聯友今年再 尋突破
8. CIMB's downward revision on Bumi Armada is weird - felicity Good Articles to Share
Partners & Brokers