News Worms
News Worms


Rupee strengthens to a new two-year high

Rupee strengthens to a new two-year high

Traders said the RBI's decision to lower the policy rate, the first since October 2016, failed to boost sentiment, PTI reported.

"The market was optimistic about a cut and a 25 basis point cut is on expected lines and I am expecting two more cuts of 25 basis points each this year".

Governor Urjit Patel and three others voted in favor of the decision, while one member sought 50-basis point reduction and another voted for status quo.

Meanwhile, the 10-year benchmark bond yield closed at 6.46 percent, 3 basis points higher than its previous close.

As the trajectory of inflation in the baseline projection is expected to rise from current lows, the MPC made a decision to keep the policy stance neutral and to watch incoming data.

New Delhi has kept an inflation target of 4 percent, with room for a 2 percent increase or decrease.

The MPC noted that some of the upside risks to inflation have either reduced or not materialized.

The central bank attributed its prediction on factors such as planned pay hikes for government employees, a recovery in food prices, and the impact on prices from the launch of a national goods and services tax on July 1. The controversial policy was blamed for putting the brakes on India's economic expansion. So it was not surprise that markets looked underwhelmed after RBI's 25 bps rate cut.

"We look at the policy rate cut as a knee-jerk reaction to the current growth-inflation dynamics".

It should also be seen as an indicator of expectations of consistent fall in inflation that could lead to a fall in lending rates in the near future. "There are bigger problems in the economy". Madan Sabnavis, chief economist at CARE Ratings, had expected the key interest rate to remain unchanged. The government welcomed the move and called it "an important step necessary to converge toward the appropriate real monetary conditions for sustained growth consistent with India's potential and for stable, moderate inflation".

follow

editors' picks

August 03, 2017
Dow Jones passes 22000 for a new record high
Apple's figures, which were to unveil its quarterly accounts after the close, were particularly expected. The aeronautics manufacturer dropped 1.25% Tuesday but is up 53.8% since the beginning of the year.

August 03, 2017
Majority of voters believe White House is in chaos
The telephone poll surveyed 1,125 voters, and had a margin of error of plus or minus 3.4 percentage points. The findings mark Trump's lowest approval rating and highest disapproval rating in the Quinnipiac poll .

August 03, 2017
IBM scientists capture record-breaking 330TB of uncompressed data in tiny cartridge
In creating the new tape-based storage, IBM used its reading and writing technology with Sony's latest tape. Areal recording density is the amount of information that can be stored on a given area of surface.

August 03, 2017
Teenager jumps out of a plane in San Francisco
The passenger has been taken into custody by law enforcement. "People were yelling, 'Tell the flight attendants". Other passengers said the teen appeared fidgety and anxious during the seven-hour flight from Panama City .

August 02, 2017
Nintendo's SNES Classic Edition pre-orders will go live this month
In post to Nintendo's Facebook page, the company says that retailers will begin offering pre-orders at the end of this month . Whether people will actually be able to get their hands on one is a whole other matter, however.

August 02, 2017
Turkey opens trial of almost 500 defendants over failed coup
Fighter planes taking off from the base on in July 2016 bombed several locations in Ankara , including the parliament building. More than 50,000 people have been arrested over suspected links to Gulen, with hundreds of soldiers sacked or incarcerated.

August 02, 2017
With Scaramucci's firing, can John Kelly bring stability to the White House?
Nevertheless, Scaramucci began Monday believing he could weather the storm surrounding him, three people who talked to him said. Scaramucci would still have to work in the same West Wing as Bannon. "They'll all be fired by me", Scaramucci continued.

August 02, 2017
U.S. diplomats ordered to leave as Trump signs sanctions on Russian Federation
The New York Times notes Russian diplomatic missions in the us don't usually hire Americans. Critics say Putin's government often uses that justification to suppress political dissent.

August 02, 2017
Trump Personally Dictated Misleading Statement About Son's Meeting With Russian Lawyer
During a press briefing on Monday (local time ), White House press secretary Sarah Huckabee Sanders said Mr Trump didn't mean it. The Times also reported on July 11 that the president had signed off on his son's statement.

August 02, 2017
Government Launch Bid For European Medicines Agency To Relocated To Dublin
More than 20 European cities will battle to become the new homes to two EU agencies which will leave London because of Brexit . Cities interested in the banking authority include Brussels, Dublin, Frankfurt, Paris, Prague, Luxembourg, Vienna and Warsaw.