{"id":3991,"date":"2019-12-05T13:39:51","date_gmt":"2019-12-05T13:39:51","guid":{"rendered":"https:\/\/kuvera.in\/blog\/?p=3991"},"modified":"2021-12-15T11:13:52","modified_gmt":"2021-12-15T11:13:52","slug":"no-policy-sixer-from-rbi","status":"publish","type":"post","link":"https:\/\/kuvera.in\/blog\/no-policy-sixer-from-rbi\/","title":{"rendered":"No Policy Sixer from RBI!"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_40 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" area-label=\"ez-toc-toggle-icon-1\"><label for=\"item-69e06a9f545ea\" aria-label=\"Table of Content\"><span style=\"display: flex;align-items: center;width: 35px;height: 30px;justify-content: center;direction:ltr;\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/label><input  type=\"checkbox\" id=\"item-69e06a9f545ea\"><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/kuvera.in\/blog\/no-policy-sixer-from-rbi\/#RBI_keeps_the_repo_rate_unchanged_at_515\" title=\"RBI keeps the repo rate unchanged at 5.15 %\">RBI keeps the repo rate unchanged at 5.15 %<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/kuvera.in\/blog\/no-policy-sixer-from-rbi\/#Some_highlights_from_RBIs_announcements\" title=\"Some highlights from RBI\u2019s announcements:\">Some highlights from RBI\u2019s announcements:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/kuvera.in\/blog\/no-policy-sixer-from-rbi\/#Impact_-_on_banks_economy_and_consumers\" title=\"Impact \u2013 on banks, economy and consumers\">Impact \u2013 on banks, economy and consumers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/kuvera.in\/blog\/no-policy-sixer-from-rbi\/#Interested_in_how_we_think_about_the_markets\" title=\"Interested in how we think about the markets?\">Interested in how we think about the markets?<\/a><\/li><\/ul><\/nav><\/div>\n<h4><span class=\"ez-toc-section\" id=\"RBI_keeps_the_repo_rate_unchanged_at_515\"><\/span>RBI keeps the repo rate unchanged at 5.15 %<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>Both the market and market participants were in for a surprise (shock for some) when the Reserve Bank of India (RBI) in the much anticipated Monetary Policy Committee (MPC) meeting today announced its decision to keep the Repo-rate unchanged at 5.15 %. (The MPC is a six-member committee formed by the Government of India in 2016 for deciding on RBI\u2019s policy rates like Repo-rate, reverse-repo rate, liquidity adjustment facility etc)<\/p>\n<p>The Repo-rate had been cut consecutively five times during the last five such policy review meetings this year.<\/p>\n<p>Repo-rate stands for &#8220;Repurchasing option&#8221; or &#8220;Repurchasing agreement&#8221;. It is the rate at which Indian banks borrow from the RBI. The rate at which RBI lends the money is called the &#8216;repo-rate&#8217;. It is a tool which can be used by the RBI for regulating inflation, money supply and liquidity in the system.<\/p>\n<p>The RBI Governor Shaktikanta Das today said<\/p>\n<p>&nbsp;<\/p>\n<blockquote><p>&nbsp;<\/p>\n<p>Can&#8217;t mechanically reduce policy rate every time; expect faster transmission of earlier rate cuts hereon.<\/p>\n<p>&nbsp;<\/p><\/blockquote>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Some_highlights_from_RBIs_announcements\"><\/span>Some highlights from RBI\u2019s announcements:<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>1\/\u00a0 The RBI\u2019s MPC would continue with its <strong>&#8216;accommodative stance&#8217;<\/strong> for growth revival and also so that inflation remains in check and stays at low levels<\/p>\n<p>2\/\u00a0 The October-March CPI projection has been raised from 3.5 &#8211; 3.7 % to <strong>5.1 &#8211; 4.7\u00a0 %.<\/strong> October CPI was higher than expected. Inflation is expected to rise in the near term but to eventually come down in Q1-Q2 of 2020.<\/p>\n<p>3\/\u00a0 The projected <strong>GDP rate<\/strong> for the economy has been reduced to <strong>5 %<\/strong> from 6.1 %\u00a0 earlier<\/p>\n<p>4\/\u00a0 The reverse repo rate stays at <strong>4.90<\/strong> <strong>%. <\/strong>Reverse-Repo rate is the opposite of repo-rate and is the rate at which RBI borrows funds from Indian banks or when banks place their excess money with the RBI. Banks are the lender here and the RBI pays interest to them.<\/p>\n<p>5\/ All six MPC members voted unanimously for keeping the rate unchanged<\/p>\n<p>6\/ India\u2019s foreign-exchange reserves stood at <strong>$ 451.7 billion<\/strong> as of December 3, 2019. This is the first time that the $ 450 billion mark has been crossed.<\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Impact_-_on_banks_economy_and_consumers\"><\/span><strong>Impact \u2013 on banks, economy and consumers<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>1\/\u00a0 The RBI wants greater transmission of rate cuts to the end customer announced during the year. This has not happened so far or has been happening in pockets and in small measure only.<\/p>\n<p>2\/ Rate of Fixed instruments is expected to go down. The savings bank rate would see a downward rate revision as well because banks will start linking their rates to the benchmarks.<\/p>\n<p>&nbsp;<\/p>\n<p>As <strong>Ben Bernanke<\/strong> famously said<\/p>\n<p>&nbsp;<\/p>\n<blockquote><p>&nbsp;<\/p>\n<p>The Federal Reserve, like other central banks, wields powerful tools; democratic accountability requires that the public be able to see how and for what purposes those tools are being used.<\/p>\n<p>&nbsp;<\/p><\/blockquote>\n<p>&nbsp;<\/p>\n<p>So, stay on track with your investments, stay updated and diversify.<\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Interested_in_how_we_think_about_the_markets\"><\/span>Interested in how we think about the markets?<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>Read more: <a href=\"https:\/\/kuvera.in\/blog\/category\/zen-and-the-art-of-investing\/\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>Zen And The Art Of Investing<\/strong><\/a><\/p>\n<p>&nbsp;<\/p>\n<p>Watch\/hear on YoutTube:<\/p>\n<p><iframe loading=\"lazy\" title=\"KUVERA in Media\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/videoseries?list=PLDSzQdT9nLmDSP3gSlDkPcUl-cfeI-KeB\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe><\/p>\n<p>&nbsp;<\/p>\n<p>Start investing through a platform that brings goal planning and investing to your fingertips. Visit\u00a0<a href=\"https:\/\/www.kuvera.in\/\"><strong>kuvera.in<\/strong><\/a>\u00a0to discover\u00a0<a href=\"https:\/\/kuvera.in\/blog\/direct-plans-better\/\"><strong>Direct Plans<\/strong><\/a> and\u00a0<a href=\"https:\/\/kuvera.in\/user\/login\"><strong>start investing today.<\/strong><\/a><\/p>\n<p>#MutualFundSahiHai, #KuveraSabseSahiHai!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>RBI keeps the repo rate unchanged at 5.15 % Both the market and market participants were in for a surprise (shock for some) when the Reserve Bank of India (RBI) in the much anticipated Monetary Policy Committee (MPC) meeting today announced its decision to keep the Repo-rate unchanged at 5.15 %. (The MPC is a [&#8230;]<\/p>\n<p><a class=\"btn btn-secondary understrap-read-more-link\" href=\"https:\/\/kuvera.in\/blog\/no-policy-sixer-from-rbi\/\">Read More&#8230;<\/a><\/p>\n","protected":false},"author":11,"featured_media":3993,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false},"categories":[91],"tags":[301,300,302,303],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>No Policy Sixer from RBI! - Kuvera<\/title>\n<meta name=\"description\" content=\"In a surprise move RBI did not cut the repo-rate a sixth consecutive time. 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