RBI Slashes Repo Rate by 25 Basis Points, Changes Stance to 'Neutral'

RBI cuts repo rate in first policy review under new governor

RBI cuts repo rate in first policy review under new governor

Brexit uncertainty had been "weighing more heavily" on firms since November, he said.

The Eurozone growth forecast was also cut to 1.3 per cent, down from the 1.9 per cent predicted in November.

In its quarterly health check, the Bank has cut its growth forecast for the economy in 2019 from 1.7% to 1.2%, placing the blame on a slowing global economy, as well as Brexit uncertainty.

Barry McAndrew, ‎fixed income senior portfolio manager at State Street Global Advisors, EMEA, said: "The committee seem happy to wait for some clarity on Brexit negotiations and the economies response to it, before making their next move".

Ricky Knox, CEO of Tandem Bank, says, "Irrespective of whether we have a no-deal Brexit, the United Kingdom economy is slowing, just look at the problems with British vehicle manufacturing".

"There are still as nearly as a wide of range of possibilities as there were the morning after the referendum", Carney said after the Bank's policymakers voted unanimously to keep rates at 0.75 percent, as expected.

It might end up as a no-deal Brexit which would be bad for the United Kingdom economy, or it might be postponed and that would push uncertainty further down the road.

"This sent sterling to a two week low around $1.29 ahead of today's announcement from the BoE, and it fell a further third of a cent in the immediate aftermath".

And banks are reluctant to cut deposit rates in the fiscal year's last quarter, as they are keen to shore up their books while not losing hefty deposits.

More news: Manchester City winger Leroy Sane's record vs. Chelsea
More news: Trump says North Korea talks productive, summit will be in Hanoi
More news: LaVar Ball rips Luke Walton, claims son Lonzo better than LeBron James

This is being driven by sharp falls in business investment, as well as a drop in consumer spending and signs of a weaker United Kingdom housing market.

Although it did hold out the hope of a recovery later this year if an orderly deal is negotiated by the March deadline.

"The shift in stance of monetary policy to neutral provides flexibility and the room to address challenges to sustained growth in the Indian economy over the coming months as long as inflation outlook remains benign", said Das.

It said the United Kingdom economy is set to grow by just 1.2 percent this year instead of 1.7 percent as predicted just three months ago.

2019 GDP forecast revised lower at 1.2% against 1.7% previously.

On the flip side, growth could slump to a potential 0.8% in 2019 should uncertainty persist and financial conditions tighten.

Most economists polled by Reuters expect interest rates to rise later this year if Brexit goes smoothly.

"These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of plus/minus 2 per cent, while supporting growth", RBI said.

The surprise move came nearly a week after Modi's administration unveiled an expansionary budget, which included US$13 billion of help for consumers ahead of the poll that's due by May, and days after a top adviser to the prime minister said the RBI should cut rates.

Recommended News

  • Supreme Court blocks Louisiana abortion clinic law

    Supreme Court blocks Louisiana abortion clinic law

    Going from that title, you might find it hard to guess that the Court just handed down a ruling in favor of abortion access. A stay means a compelling possibility exists that a majority will ultimately decide a lower-court decision was in error.
    Jehovah's Witness in Russian Federation  sentenced to six years amid crackdown

    Jehovah's Witness in Russian Federation sentenced to six years amid crackdown

    Amnesty International has said that it considers Christensen and other Jehovah's Witnesses on trial as prisoners of conscience. Embassy, which expressed its concern and urged Russian Federation to respect individual's religious freedom.
    R. Kelly announces tour of Australia, New Zealand, Sri Lanka

    R. Kelly announces tour of Australia, New Zealand, Sri Lanka

    The embattled American entertainer announced on social media Tuesday that he'll be going to Australia, New Zealand and Sri Lanka. Kelly apparently has fans riding for him in overseas markets despite the heinous crimes he's been accused of committing.
  • News The Mazda MX-5 30th Anniversary Is Very Orange, Very Awesome

    News The Mazda MX-5 30th Anniversary Is Very Orange, Very Awesome

    Based on the 2.0-litre GT model, the MX-5 30th Anniversary Edition has 135kW of power and 205Nm of torque to its name. You could say that the special edition is for fans who feel like they have been friends with the Miata forever.

    Venezuelans not ‘beggars,’ give humanitarian aid to Colombians — Maduro

    Some Maduro critics say the Venezuelan people would welcome a USA led regional effort to force the entrenched leader from power. Maduro's government has accused Guaido, who has galvanized Venezuela's opposition, of attempting to stage a USA -directed coup.
    Disney+ Will Get Third-Party Shows to Obliterate Netflix

    Disney+ Will Get Third-Party Shows to Obliterate Netflix

    According to Iger, Captain Marvel will be the first movie from the company that will stream only on Disney +. It looks like Disney doesn't share the opinions of Rogue One scriptwriter Gary Whitta after all.
  • Virginia Will Elect GOP to Top Posts in 2020

    Virginia Will Elect GOP to Top Posts in 2020

    The fourth in the line of succession, should all three men resign, is the Republican speaker of the House of Delegates, Kirk Cox. The next day, in a news conference, he denied being in the photo, and defied growing calls for him to resign as governor.
    Ghana Intensifies Fight Against Female Genital Mutilation

    Ghana Intensifies Fight Against Female Genital Mutilation

    Complications include severe pain, hemorrhaging, sepsis, urethra damage, painful sexual intercourse and other sexual dysfunction.
    Albert Finney, five-time Oscar nominee, dead at 82

    Albert Finney, five-time Oscar nominee, dead at 82

    Actor David Morrissey was among the first to pay tribute to Finney on Instagram and Twitter writing: "One of the true great". Albert's other memorable roles include Winston Churchill in The Gathering Storm where he won a Golden Globe and a BAFTA.
  • 3 killed as 8-storey building collapses in Turkey | newkerala.com #98772

    3 killed as 8-storey building collapses in Turkey | newkerala.com #98772

    Speaking to reporters at the site, Soylu said rescue work has been ongoing for 31 hours in an effort to reach more survivors. At least three people have been found dead in the rubble, and 13 people - including the two children - have been rescued.
    Ariana Grande's new album explained in GIFs

    Ariana Grande's new album explained in GIFs

    Ariana responded to a question on Twitter from a fan who asked her just how she's feeling now that her tape has been released. However, Variety reports that Grande initially offered to perform " 7 rings ", which was turned down by the Academy.

    Google blocked 100m spam Gmail messages using AI

    TensorFlow also provides the flexibility to train and experiment with different models in parallel. TensorFlow protections complement Google's machine learning and rule-based protections.

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.