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As retail inflation eases, RBI cuts repo rate by 25 bps, loans likely to get cheaper



As retail inflation eases, RBI cuts repo rate by 25 bps, loans likely to get cheaper

[vc_row][vc_column][vc_column_text]This is the first cut in repo rate – the rate at which the RBI lends to banks – since October 2016. MPC headed by RBI governor Urjit Patel stressed on need to reinvigorate private investments, clear infra bottlenecks and provide big thrust to Pradhan Mantri Awas Yojana.

On the basis of an assessment of the current and evolving macro-economic situation at its meeting today, the Monetary Policy Committee (MPC) of the Reserve Bank of India decided to reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 6.25 per cent to 6.0 per cent with immediate effect. Consequently, the reverse repo rate under the LAF stands adjusted to 5.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 6.25 per cent.

Following are excerpts from the bi-monthly monetary policy:

The decision of the MPC is consistent with a neutral stance of monetary policy 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 +/- 2 per cent, while supporting growth.

The main considerations underlying the decision are set out in the statement below:

Since the June 2017 meeting of the MPC, impulses of growth have spread across the global economy albeit still lacking the strength of a self-sustaining recovery. Among the advanced economies (AEs), the US has expanded at a faster pace in Q2 after a weak Q1, supported by steadily improving labour market conditions, increasing consumer spending, upbeat consumer confidence helped by softer than expected inflation, and improving industrial production. Policy and political risks, however, continue to cloud the outlook. In the Euro area, the recovery has broadened across constituent economies on the back of falling unemployment and a pickup in private consumption; political uncertainty has receded substantially. In Japan, a modest but steady expansion has been taking hold, underpinned by strengthening exports, accelerating industrial production and wage reflation.

Among emerging market economies (EMEs), growth has regained some lost ground in China in Q2, with retail sales and industrial production rising at a steady pace. Nonetheless, tightening financial conditions on account of deleveraging financial institutions and slowdown in real estate could weigh negatively. The Russian economy has emerged out of two years of recession, aided by falling unemployment, rising retail sales and strong industrial production.

The modest firming up of global demand and stable commodity prices have supported global trade volumes, reflected in rising exports and imports in key economies. In the second half of July, crude prices have risen modestly out of bearish territory on account of inventory drawdown in the US, but the supply overhang persists. Chinese demand has fuelled a recent rally in metal prices, particularly copper. Bullion prices fell to multi-month lows on improved risk appetite but remain vulnerable to shi ifts in the geopolitical environment. Notwithstanding these developments, inflation is well below target in most AEs and is subdued across most EMEs

International financial markets have been resilient to political uncertainties and volatility has declined, except for sporadic reactions to hints of balance sheet adjustments by systemic central banks . In the currency markets, the US dollar weakened further and fell to a multi-month low in July on weak inflation and uncertainty around the policies of the US administration. The Euro, which has remained bullish, rallied further on upbeat economic data.

On the domestic front, a normal and well-distributed south-west monsoon for the second consecutive year has brightened the prospects of agricultural and allied activities and rural demand. By August 1, rainfall was 1 per cent above the long period average (LPA) and 84 per cent of the country’s geographical area received excess to normal precipitation. Kharif sowing has progressed at a pace higher than last year’s, with full-season sowing nearly complete for sugarcane, jute and soyabean. The ini tial uncertainty surrounding sowing of pulses barring tur and rice in some regions has also largely dissipated. Sowing of cotton and coarse cereals has exceeded last year’s levels but for oilseeds, it is lagging. Overall, these developments should help achieve the crop production targets for 2017-18 set by the Ministry of Agriculture at a higher level than the peak attained in the previous year. Meanwhile, procurement operations in respect of rice and wheat during the rabi marketing season have been stepped up to record levels – 36.1 million tonnes in April-June 2017 – and stocks have risen to 1.5 times the buffer norm for the quarter ending September.

Many challenges ahead for the economy

Industrial performance has weakened in April-May 2017. This mainly reflected a broad-based loss of speed in manufacturing. Excess inventories of coal and near stagnant output of crude oil and refinery products combined to slow down mining activity. For electricity generation, deficiency of demand seems to remain a binding constraint. In terms of uses, the output of consumer non-durables accelerated and underlined the resilience of rural demand. It was overwhelmed, however, by contraction in consumer durables – indicative of still sluggish urban demand – and in capital goods, which points to continuing retrenchment of capital formation in the economy. The weakness in the capex cycle was also evident in the number of new investment announcements falling to a 12-year low in Q1, the lack of traction in the implementation of stalled projects, deceleration in the output of infrastructure goods, and the ongoing deleveraging in the corporate sector. The output of core industries was also dragged down by contraction in electricity, coal and fertiliser production in June, owing to excess inventory and tepid demand.

But there’s some reason for optimism too

On the positive side, natural gas recorded an uptick in production after a prolonged decline and steel output remained strong. The 78th round of the Reserve Bank’s industrial outlook survey (IOS) revealed a waning of optimism in Q2 about demand conditions across parameters, and especially on capacity utilisation, profit margins and employment. The manufacturing purchasing managers’ index (PMI) moderated sequentially to a four-month low in June and the future output index also eased marginally. I n July, the PMI declined into the contraction zone with a decrease in new orders and a deterioration in business conditions, reflecting inter alia the roll out of the GST; however, both new export orders and the future output index rose, reflecting optimism in the outlook.

On inflation and prices:

Prices of food and beverages, which went into deflation in May 2017 for the first time in the new CPI series, sank further in June as prices of pulses, vegetables, spices and eggs recorded year-on-year declines and inflation moderated across most other sub-groups. There are now visible signs, however, of the usual seasonal price spikes, even if with a delay and especially in respect of tomatoes, onions and milk.

Fuel inflation declined for the second month in succession as international prices of liquefied petroleum gas (LPG) fell and price increases moderated in the case of coke, and firewood and chips.

Administered prices of LPG and kerosene are set to rise with the calibrated reduction in subsidy.[/vc_column_text][/vc_column][/vc_row]

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Rapido to introduce cab services soon

The company intends to introduce Rapido taxis in Delhi-NCR as early as next week, according to sources.




Rapido, the two- and three-wheeler ride-hailing platform with the quickest growth, is getting ready to introduce the taxi service on a wide network shortly. According to reports, Rapido’s planned facility will offer a service comparable to that of Ola and Uber.

According to the report, a daily choice would be made to provide passengers with a flawless travel experience. The brand hasn’t yet disclosed the precise launch information, though.

The company is currently testing out a taxi service in Hyderabad and is receiving positive feedback from users. According to reports, the company is testing the service at an advanced stage and may expand the network to further locations once it receives more positive feedback.

The company intends to introduce Rapido taxis in Delhi-NCR as early as next week, according to sources.

A statement from Rapido that read, the company is thrilled to share that our test run for Rapido Cabs in Hyderabad is off to a fantastic start. The dynamic market of the city has welcomed us with open arms, and the encouraging feedback is quite encouraging. We sincerely hope to expand our cutting-edge services to further cities and are dedicated to keeping you fully updated on our progress as we forge ahead.

Additionally, the article mentioned that Rapido wants to work with Zingbus, a company based in Gurugram, to integrate intercity bus ticketing into its app.

Meanwhile, for the previous eight years, Rapido has been providing bike taxi services. Since its founding in 2015, the organisation has expanded its network to encompass over 100 communities across the country, and it has received overwhelmingly positive feedback. Following its popularity, the brand expanded to include the 3-wheeler category with the same service.

Based on information found on Tracxn, Rapido has raised $324 million in total. Swiggy, an online meal delivery business, spearheaded the company’s $180 million fundraising effort in April of last year.

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BSE Sensex, Nifty fall due to tension in Middle East

The 30 share Bombay Stock exchange fell 407.19 points in the early trade. The Nifty fell 142.7 points. Asian Paints, IndusInd Bank, Titan, Tata steel and State Bank of India were the major stock which lagged behind.



BSE Sensex, Nifty falls due to tension in Middle East

The BSE Sensex, Nifty fell on early trade on Monday as rising tensions in the middle east has set off a risk off in the market. According to market analysts investors preferred to remain on the sidelines and did not take any big risks as Hamas-Israel conflict has caused huge uncertainity for the markets.

The 30 share Bombay Stock exchange fell 407.19 points in the early trade. The Nifty fell 142.7 points. Asian Paints, IndusInd Bank, Titan, Tata steel and State Bank of India were the major stock which lagged behind. But Sun Pharna, Hindustan Unilever, Infosys, Wipro, TCS, Tech Mahindra and HCL technologies did not go according to the market trend and traded in the positive territory.

The BSE had gone up 364.06 points or 0.55 percent to settle at 65,995.63 points on Friday. The Nifty had gone up 107.75 points to settle at 19,653.50. The Hamas-Israel conflict has caused a huge uncertainity in the market. VK VijayaKumar, chief investment strategist at Geojit Financial services said No one knows how this war is going to evolve.

He said the war is not going to cause disruption to the oil supplies, the situation will change if Iran is drawn to the war. As Iran is a major Hamas supporter. Vijayakumar said this can cause disruption in oil supplies which will further lead to increase in crude oil prices. He said it is a time to remain cautious in the market.

The manufacturing data and industrial production for the month of August are going to be announced on October 12. Inflation rate for September will be announced after the Wholesale price index (WPI) data on October 13.The Reserve Bank of India had left its key interest rate unchanged. RBI signaled to keep liquidity tight by using bond sales to bring prices closer to market.

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First look of Air India’s aircraft following changes to the logo and design revealed | See here

Air India uploaded images of its A350 aircraft parked in a paint shop in Toulouse, France, on X, formerly known as Twitter. This winter, the jet will touch down in India.



Air India

Prominent airline Air India posted the first image of its aircraft on Saturday after changing its name, logo, and livery after being acquired by the Tata Group.

Air India uploaded images of its A350 aircraft parked in a paint shop in Toulouse, France, on X, formerly known as Twitter. This winter, the jet will touch down in India.

Here is the majestic A350 in our new livery for the first time, as seen in Toulouse’s paint shop. This winter, our A350s start returning home… @Airbus, tweeted Air India.

As part of its rebranding effort, Air India earlier in August announced its new logo and colour palette.

The new logo, which features a more stylized style and a new colour scheme of red, white, and purple, is a contemporary interpretation of the airline’s well-known Maharaja mascot.

The strong red lettering of Air India is still present in the new colour scheme but is in a different font. Air India is written in white in a red area on the underside of the aircraft as part of the colour scheme.

According to the airline, the new livery and design of the aircraft incorporates a pattern that is inspired by the chakras and a colour scheme of deep red, aubergine, and gold highlights.

The airline’s previous logo, which depicted a red swan embellished with the recognisable orange Konark Chakra, has been replaced.

Tata Sons Chairman N Chandrasekaran stated the new logo signifies limitless possibilities at the time of unveiling it.

In January 2022, Tata Sons bought Air India through Talace Private Limited, an entirely owned subsidiary. Later, it was revealed that Air India and Vistara, a different Tata Sons division, will be combined to form a more cohesive organisation. By March 2024, this merger is expected to be finished.

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