More Stories

Informist, Wednesday, Nov. 6, 2024

 

--RBI Das: Oct CPI print may be even higher than Sept number

--CONTEXT:RBI Governor Shaktikanta Das at Business Standard BFSI Summit 2024

--RBI Das: Next course on policy needs to be taken very seriously

--RBI Das: Not under any pressure from mkts to go for rate cuts

--RBI Das: Should not assume change in stance's next step is rate cut

 

NEW DELHI – Reserve Bank of India Governor Shaktikanta Das on Wednesday again pushed back against expectations of an interest rate cut next month, saying it would be wrong to assume that a change in stance by the Monetary Policy Committee would be followed by a reduction in the repo rate at the immediate next meeting.

 

"I think the message was very clear, that look, we have to be very cautious in our future course of action. It should not be assumed that we have done this (changed stance), so therefore, the next step is a rate cut; change in stance does not mean that next step is a rate cut at the very next meeting. It is not so," Das said at financial daily Business Standard's BFSI Insight Summit in Mumbai.

 

On Oct. 9, the MPC left the repo rate unchanged at 6.50% for the 10th meeting in a row, but unanimously voted to change its stance to neutral from withdrawal of accommodation, sparking hope of the first rate cut in four and a half years at the December meeting. However, days later, headline CPI inflation for September came in at a nine-month high of 5.49%, mostly due to a low base. Das subsequently warned that talk of a rate cut at the current juncture was premature and risky, leading to several economists pushing back their rate cut calls.

 

"If there was some amount of misinterpretation, I have to see why... It is not so much misinterpretation, but I think market expectations...which sometime try to pressurise central banks. But we are not under any pressure to go for the next step," Das said Wednesday.

 

The MPC will meet next on Dec. 4-6.

 

The Indian central bank chief, whose term ends on Dec. 9, went on to warn that CPI inflation for October would also be "very high", perhaps higher than that in September. In such a situation, he said the next course on monetary policy needed to be taken very seriously.

 

CPI inflation data for October will be released at 1600 IST on Nov. 12, with the statistics ministry on Tuesday announcing that it was advancing the publication of the monthly price increase measure by 90 minutes. Some economists are of the opinion that headline retail inflation may have risen to as high as 6% last month. According to the RBI, CPI inflation will average 4.8% in Oct-Dec, up from 4.2% the previous quarter.  End

 

Reported by Siddharth Upasani

Edited by Avishek Dutta

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2024. All rights reserved.