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Shares of rate sensitive sectors were trading mixed after the Reserve Bank of India’s (RBI’s) monetary policy committee (MPC) unanimously decided to keep repo rate unchanged at 6.5 per cent. This is the third time the RBI MPC has decided to press the pause button on the repo rate hikes.
The RBI, however, asked banks to provide incremental cash reserve ratio (CRR) on deposits done with Rs 2000-currency notes.
Shaktikanta Das, governor of the RBI, in his statement, said that it has been decided that with effect from the fortnight beginning August 12, 2023, scheduled banks shall maintain an incremental cash reserve ratio (I-CRR) of 10 per cent on the increase in their net demand and time liabilities (NDTL) between May 19, 2023 and July 28, 2023
He also announced a revised retail inflation projection for FY24 at 5.4 per cent from 5.1 per cent earlier. In the second quarter, the consumer price inflation-based (CPI) inflation is expected to be 6.2 per cent, followed by 5.7 per cent in Q3, and 5.2 per cent in Q4.
At 11:01 AM, Nifty Bank and Nifty Financial Services index were down 0.65 per cent as compared to 0.50 per cent decline in the Nifty 50 index. Nifty PSU Bank and Nifty Auto index were also down 0.40 per cent each, while Nifty Realty index was up 0.07 per cent.
Among individual stocks, ICICI Bank, Kotak Mahindra Bank, HDFC Bank, and AU Small Finance Bank from the private banks’ pack, and Tata Motors, Maruti Suzuki India and Hero MotoCorp from the automobiles’ sector slipped 1 per cent. However, Indian Overseas Bank, Punjab & Sind Bank, and Uco Bank from the PSU banks’ space, and Brigade Enterprises, Sobha, DLF, Indiabulls Real Estate from realty segment were trading higher by up to 1 per cent.
“The implementation of ICRR measure is intended to absorb the surplus liquidity generated by various factors referred to earlier including the return of Rs 2,000 notes to the banking system. This is purely a temporary measure for managing the liquidity overhang,” the statement said.
While inflation has moderated, the job is still not done. Inflationary risks persist amidst volatile international food and energy prices, lingering geopolitical tensions and weather related uncertainties.”I reiterate our commitment to align CPI inflation to the 4 per cent target on a durable basis. We do look through idiosyncratic shocks, but if such idiosyncrasies show signs of persistence, we have to act,” the governor said in his statement.
The RBI, however, asked banks to provide incremental cash reserve ratio (CRR) on deposits done with Rs 2000-currency notes.
Shaktikanta Das, governor of the RBI, in his statement, said that it has been decided that with effect from the fortnight beginning August 12, 2023, scheduled banks shall maintain an incremental cash reserve ratio (I-CRR) of 10 per cent on the increase in their net demand and time liabilities (NDTL) between May 19, 2023 and July 28, 2023
He also announced a revised retail inflation projection for FY24 at 5.4 per cent from 5.1 per cent earlier. In the second quarter, the consumer price inflation-based (CPI) inflation is expected to be 6.2 per cent, followed by 5.7 per cent in Q3, and 5.2 per cent in Q4.
At 11:01 AM, Nifty Bank and Nifty Financial Services index were down 0.65 per cent as compared to 0.50 per cent decline in the Nifty 50 index. Nifty PSU Bank and Nifty Auto index were also down 0.40 per cent each, while Nifty Realty index was up 0.07 per cent.
Among individual stocks, ICICI Bank, Kotak Mahindra Bank, HDFC Bank, and AU Small Finance Bank from the private banks’ pack, and Tata Motors, Maruti Suzuki India and Hero MotoCorp from the automobiles’ sector slipped 1 per cent. However, Indian Overseas Bank, Punjab & Sind Bank, and Uco Bank from the PSU banks’ space, and Brigade Enterprises, Sobha, DLF, Indiabulls Real Estate from realty segment were trading higher by up to 1 per cent.
“The implementation of ICRR measure is intended to absorb the surplus liquidity generated by various factors referred to earlier including the return of Rs 2,000 notes to the banking system. This is purely a temporary measure for managing the liquidity overhang,” the statement said.
While inflation has moderated, the job is still not done. Inflationary risks persist amidst volatile international food and energy prices, lingering geopolitical tensions and weather related uncertainties.”I reiterate our commitment to align CPI inflation to the 4 per cent target on a durable basis. We do look through idiosyncratic shocks, but if such idiosyncrasies show signs of persistence, we have to act,” the governor said in his statement.
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