Tag Archives: RBI

Sensex closes at 8,701, lowest since ’05

Good Evening friends, Indian Stock Market, BSE Sensex below 9000. it close at 8701. Oh God, where its going and where its going to stop?


After infusing Rs 1,85,000 crore liquidity into the banking system this month, RBI on Friday surprised the market by keeping its key rates unchanged in the mid-term review of annual monetary policy, which lowered economic growth projections to 7.5-8% for 2008-09.


Soon after the RBI announced its credit policy, markets witnessed one of the worst trading sessions following meltdown in global markets on concerns of slowing global economy and recession.


Sensex lost 1070.63 points to close at 8,701.07, down 10.96%. It is the lowest closing for Sensex since November 24, 2005.


On the other hand, Nifty ended at 2584.00, down 12.20%.


BSE Midcap closed 8.38 per cent lower and BSE Smallcap Index ended 7.66 per cent down.


DLF (-23.96%), Ranbaxy Laboratories (-17.83%), Hindalco Industries (-17.82%), Tata Motors (-16.54%), Reliance Industries (-16.44%) and Mahindra & Mahindra (-16.04%) were the worst hit.


None of the stocks in the 30-share index could survive the meltdown.


Market breadth on BSE collapsed with 2322 declines against 260 advances.


Market breadth was extremely negative on the BSE with 2322 declines and 260 advances.


With the global commodity and oil prices cooling, the central bank kept the inflation projection unchanged at 7% by end-March but emphasised that inflation continued to be a matter of concern requiring constant “vigil.”


Outlining the monetary measures, the policy said the benchmark bank rate has been kept unchanged at 6 per cent, repo rate at 8%, reverse repo at 6 per cent and CRR at 6.5%.



India Inc expects further cut in repo rate: Assocham -1

‘The survey suggests that reasonable liquidity has already been infused into financial system as thousands of India Inc’s applications are pending with banks for sourcing loans. This fear psychosis needs to be removed from banking system with constant monitoring from the RBI on banks extending loans,’ the survey report said.

According to the report, 54 CEOs expected a 100-basis-point cut, while 27 CEOs said the RBI would slash it by 50 basis points.

Of the total respondents, 63 percent maintained that the repo rate at eight percent was still at higher level when compared to the rest of the world.

They said a further rate cut would boost the industrial growth and help foster employment prospects.

‘The industrial growth this fiscal has been a worrying factor for the economy. The industrial growth as shown by the Index of Industrial Production for August has slowed down to 1.3 percent, one of the worst performances on record,’ the report said.

The central banks across the world have taken unprecedented actions by cutting their key interest rates to significantly lower levels to deal with financial crisis. The RBI has followed suit with a 250-basis-point cut in the cash reserve ratio and a 100-basis-point cut in the repo rate. 


ref: guaranteedblinds, premierinns, lifequotecenter, yahoo

India Inc expects further cut in repo rate: Assocham

Good Evening friends,

End of another busy day. Working with time frame leads towards tension. Tension of not another thing but just keeps us conscious about our responsibilities. I think I love it this way. I was reading new paper and I found that India Inc expects that RBI should cut down repo rates. This is out put of survey carried out by associated chambers of Commerce and Industry of India (Asshochem) among 105 CEOs and MDs. I read the news at yahoo india.

India Inc is hopeful that the Reserve Bank of India (RBI) would bring down repo rates to seven percent from the current eight percent and create a mechanism to monitor banks’ lending, according to an industry lobby survey.

The survey, carried out by the Associated Chambers of Commerce and Industry of india (Assocham) among 105 chief executive officers (CEOs) and managing directors, said 77 percent of the participants were of the view that the RBI would further cut repo rates, the interest charged on borrowings by commercial banks, by 100 basis points to calm down volatility in domestic markets.

The recent slash of 100 basis points in repo rate was ‘a welcome move but we expect the bank to complement the move with further rate cut in the coming policy review,’ Assocham president Sajjan Jindal said.

‘The survey suggests that reasonable liquidity has already been infused into financial system as thousands of India Inc’s applications are pending with banks for sourcing loans. This fear psychosis needs to be removed from banking system with constant monitoring from the RBI on banks extending loans,’ the survey report said.

more in next post.

Repo rate reduced to 8%

Good Morning Friends,

Repo rate reduced to 8% is going to help individual like me. Repo rate reduced to 8%, well I am the happiest person to know this. It’s going to have it’s effect on Indian economy as well as towards financial condition of stock market.


For me, reduction in repo rate going to help me in direct way. I am having a home loan and rate of interest is increasing till now. Now with Repo rate reduction, rate of interest on home loan is going to go down. Let’s see how my bank is going to reduce and how much benefit I am going to get with this action of our Prime Minister Manmohan Singh. I read this news at yahoo news.


On Monday, Prime Minister Manmohan Singh led from the front, stating there was no room for fear on the state of the Indian economy, while the government unsheathed all its weapons to keep the financial sector solvent, stock markets orderly and growth on track.


For the middle class, the big news is the home loan rate cuts—tentative at first, but bound to snowball. The government also held out the likelihood of a major expenditure boost to spur demand across sectors. Since RBI will announce its half-yearly credit policy on Friday, another tranche of rate cut is on the cards.


RBI announced a 100-basis point cut to 8% in the repo rate—the rate at which it lends to banks—soon after the stock markets opened. Since banks peg their lending rates to this benchmark, it is certain to lower rates across the board. This is the first reduction in the repo rate since 2004.


More in next post…….

RBI cancels $2 bln bond auction

Good Evening friends,

Just finish my today’s work and just preparing to go home now. Before I leave office as part of my routine habit I am reading online news and I read following news at yahoo India.

The Reserve Bank of India (RBI) on Monday cancelled a 100 billion rupee ($2 billion) bond auction after the RBI unexpectedly cut its benchmark lending rate by a full percentage point.

“In order to enable the market participants to make fresh bids, the government of India will be offering the same papers for the same amounts in auctions on a date to be announced later,” it said in a statement. 


Yahoo. guaranteedblinds, premierinns, agentswebworld

RBI allows breathing space of Rs 1,45,000cr

The official drive to restore liquidity to the banking system and hence ease the credit crunch gathered momentum on Wednesday with the Reserve Bank of India effectively infusing a further Rs 65,000 crore through cuts in the cash reserve ratio (CRR) and part payment to banks for the farm loan waiver scheme.


With this, the central bank has increased the banks’ lending resources by Rs 1,45,000 crore over the last three days, following earlier cuts in CRR that came into effect on Monday and a Rs 20,000 crore window for banks to borrow from the RBI to lend to mutual funds facing redemption pressure.


The first concrete sign that the moves are beginning to have an impact came in the form of a cut of half a percentage point in interest rates on home and education loans announced by the Punjab National Bank on Wednesday. Some other state-owned banks, which are comfortably placed in terms of liquidity, are likely to follow suit, confirmed a senior official at one of the banks.