Experts | Business Upturn

RBI will likely maintain there position on interest rate: Experts

News Desk — Sat, 10 Jun 2023 20:16:39 +0000

Despite the fact that the Reserve Bank of India (RBI) did not adjust the interest rates, those who are hoping for a decrease in the repo rate, which is the interest paid by banks for the cash borrowed from the central bank, are not likely to be encouraged by the indicators that are emerging.

Many industry professionals are of the opinion that the greater focus on bringing inflation down to the RBI’s objective of 4 percent may imply that any rate reduction if they are to occur at all, would occur later than the majority of people had expected up to this point.

The Chief Economist of Deutsche Bank, Kaushik Das, said in an interview with CNBC-TV18 that those individuals anticipating the beginning of the rate decrease to begin in October would be left disappointed. There is a general agreement that this year’s growth will be 6 percent, whereas RBI predicts 6.5 percent. However, if RBI’s projections come true, the timing for a rate reduction will be pushed back, and it is likely that RBI won’t begin lowering interest rates until April of the following year. “For the time being, we are in the midst of a protracted and extended pause,” he said.

There are more besides Das. Even Amandeep Chopra, Group President and Head-Fixed Income, UTI MF, and Ashwini Kumar Tewari, MD-Risk Compliance & Sarg, at the State Bank of India, were of the opinion that the earliest one can anticipate a drop in benchmark lending rates by the RBI is in February of 2024. This is because they believe that the RBI would have to collect more data before making a decision.

Repo rates are used as a benchmark for determining the interest rates on bank loans. These rates are used for anything from house to car and business loans. Therefore, the Reserve Bank of India (RBI) will have to take the initiative to lower banks’ interest rates.

The cautious remark was instigated by Governor Das, who, in his talk after the most recent monetary policy review, said that it is essential to keep an “Arjuna’s eye” on inflation. This statement provided the impetus for the cautious comments. This is a reference to a story from the Mahabharata, which is a portion of Indian mythology. In this story, the ability of the protagonist Arjuna to strike his target has become a benchmark for resolve, focus, and excellent marksmanship.

The fact that Das has frequently cited the objective of 4 percent for retail inflation, while at the same time failing to underline the 2 percent wiggle space (i.e. up to 6%) that the inflation targeting framework affords him, is being interpreted as a hint that the Reserve Bank of India is becoming more hawkish than the market had anticipated.
As a result of the comments provided by the Governor of the RBI, the optimism that was present in the Indian equities markets in the morning gave way to a sell-off in the afternoon.

The Nifty 50 and the Sensex both saw significant declines after reaching their daily peaks. The Nifty Bank index, which tracks the performance of the country’s largest financial companies, was trading more than 200 points lower than it had been earlier in the day. The index had been on track to break its previous record high. A severe dent was made in real estate stock prices, which are very susceptible to changes in lending rates.

Can RBI achieve its FY24 GDP target? Here’s what economists say

News Desk — Sat, 10 Jun 2023 19:40:52 +0000

The rate-setting committee of the Reserve Bank of India (RBI), known as the Monetary Policy Committee (MPC), hasn’t surprised anyone by keeping its finger on the pause, keeping the policy repo rate at 6.5 percent, and sticking to its stance of withdrawal of accommodation. This indicates that the RBI believes there is still too much liquidity in the system, and that the central bank needs to keep it tight to check inflation.

In spite of this, several financial experts anticipated that the MPC would vote differently on the attitude, even if it didn’t change to neutral, since the inflation rate has been falling. “While the monetary policy committee might vote unanimously to keep rates unchanged, the decision to extend the stance could see a split as the doves would prefer to close the door on further tightening as inflation beats a retreat,” Radhika Rao, an economist at DBS Bank, said in a note dated June 5 that “while the committee might vote unanimously to keep rates unchanged, the decision to extend the stance could see a split.”
A neutral position will suggest that the RBI can increase, stop, or cut at a future stage, as prompted by the data and transmission delays, an economist from Deutsche Bank AG named Kaushik Das told Bloomberg. “A neutral stance will signal that the RBI can hike, pause, or cut at a future stage.”

Why not just be impartial?
Following a series of incremental increases in the repo rate over the course of almost an entire year, the MPC decided to put a hold on further rate increases at their meeting in April. Jayanth Varma, who is one of the most vociferous rate-setters in the group, raised doubts on this matter, despite the fact that five of the organization’s members had chosen to continue concentrating on the withdrawal of housing. Nothing has changed in that regard. The same five members voted once again to stay focused on removal of accommodation in order to ensure that inflation gradually matches the objective while supporting growth. Varma once again raised misgivings on this aspect of the resolution.

A change in posture would have heightened expectations of a pivot in the near future, but it does not seem probable that there will be a rate decrease anytime soon given the unpredictable influence that weather may have on food prices. According to Rao of DBS Bank, the action taken by central banks across the world demonstrates vigilance on inflation as well as financial stability threats. This is in response to the Australian meteorological bureau’s decision to increase the likelihood of an El Nino event occurring.

ICMR suggests to wait 6 weeks for Surgery after COVID infection

Himanjali Mahanta — Mon, 31 May 2021 08:31:56 +0000

Experts from the Indian Council of Medical Research (ICMR) and the National Council Taskforce have advised: “Recovered Covid patients opting for non-urgent or elective surgeries are being asked by surgeons to go for repeat RT-PCR/ antigen tests as part of pre-operative protocols.”

The experts have also said to repeat Covid tests within 102 days of recovery and citing the presence of “non-viable dead-virus parties” that stay in the body for a while.

Surgeons should consider performing a non-urgent surgery on a Covid-recovered patient only after six weeks of recovery to ensure faster healing and convalescence post-surgery, said experts. “At present, Covid reinfection is confirmed only after 102 days of diagnosis hence it is advisable to delay surgeries till this time has lapsed,” said infectious diseases expert Sanjay Pujari.

Doctor Pujari also stressed the importance of a preoperative evaluation of Covid recovered patients well ahead of surgery with a special focus on the cardiopulmonary systems.

Also, “Residual symptoms such as fatigue, shortness of breath, and chest pain are common in patients who have had Covid. These symptoms can be present for more than 6o days after diagnosis,” said doctor Pujari while emphasizing the need for a preoperative risk assessment as per the guidelines issued by the American Society of Anesthesiology.

President of Poona Surgical society, Sanjay Kolte said, “Retesting recovered patients within 102 days from Covid diagnosis is a waste of time and leads to anxiety. Importantly, Surgeons should adopt universal precautions while performing elective surgery rather than insisting on RTPCR reports.”