GJ Town India

The MPC decided to reduce the policy repo rate by 25 basis points   The Monetary Policy Committee (MPC) met on 5th, 6th and 7th of this month. The Governor’s Statement after the MPC meeting contains not only the resolution of the MPC with regard to the policy rate and stance but also other announcements and measures, which have a bearing on the monetary and regulatory policies.   In this backdrop, the MPC, after a detailed assessment of the evolving macroeconomic and financial developments and the economic outlook, decided unanimously to reduce the policy repo rate by 25 basis points from 6.50 per cent to 6.25 per cent. Consequently, the standing deposit facility (SDF) rate shall be 6.00 per cent and the marginal standing facility (MSF) rate and the Bank Rate shall be 6.50 per cent.  The MPC also decided unanimously to continue with the neutral stance and remain unambiguously focussed on a durable alignment of inflation with the target, while supporting growth. RB...

Gold ETFs show resilience amid global economic shifts   Recently, the World Gold Council published their Gold ETF Commentary for the September 2024. The Report said, once again, the region saw FX hedging related inflows, albeit at a slower pace than August, driven mainly by continued strength in local currencies against the dollar.   Asian funds attracted US$175mn in September, extending the region’s inflow streak to 20 months. India again saw strong inflows, driven by factors not too dissimilar from previous months. At the same time, the strong gold price momentum and elevated geopolitical risk were contributors.   Increasing net longs were mainly contributed by money managers – their net positions reached 793t as of September, 8% higher than the end-August level and 84% above the H1 average of 430t. Similar to previous months, gold’s eye-catching performance and investors’ rising bets on the Fed’s future rate cuts were main drivers. In the context of Fed Rat...

The risk of global shocks remains! Colin Shah   In a Monetary Policy Statement, 2023-24 Resolution of the Monetary Policy Committee (MPC), on the basis of an assessment of the current and evolving macroeconomic situation, the MPC at its meeting decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50 per cent. The standing deposit facility (SDF) rate remains unchanged at 6.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent. The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns with the target, while supporting growth.  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 +/- 2 per cent, while supporting growth.    On the RBI policy perspective, Colin Shah, MD, Kama Jewelry expressed that, “the RBI's decision to ho...