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Indian Express
30-06-2025
- Business
- Indian Express
External risks to India's growth momentum require deft handling
In recent assessments of the world economy, agencies such as the World Bank and the International Monetary Fund have lowered their expectations of global growth this year, with trade policy shocks and geopolitical tensions affecting economic momentum. The IMF has, for instance, projected world growth at just 2.8 per cent in 2025, down 50 basis points from its assessment in January. The World Bank has pegged growth to slow down even further to 2.3 per cent this year, with most economies expected to witness a deceleration compared to last year. In the midst of this marked deterioration, the Indian economy is broadly expected to maintain its growth momentum. The RBI had pegged growth for the year at 6.5 per cent, in line with the pace last year. In the recent State of the Economy report, economists at the RBI note that the high-frequency indicators for May point towards economic activity being 'resilient'. There are several points to note. For one, the agricultural sector appears to continue to fare well. According to the report, conditions have been 'largely favourable' for good sowing in the ongoing kharif season. This bodes well for rural demand. The finance ministry's monthly review also says that 'rural demand has strengthened further, supported by a healthy rabi harvest and a positive monsoon outlook'. Alongside, capacity utilisation in the manufacturing sector remains 'above its long-period average', and other high-frequency indicators such as E-way bills, toll collections and digital payments also point towards 'strong growth'. But the performance of some other non-agri indicators suggests that, overall, it's a mixed trend. The index of industrial production rose by just 2.7 per cent in April, and the eight core sectors — coal, steel and cement, among others — grew by only 0.8 per cent during April-May. According to a note from ICRA, eight key indicators saw a deceleration in the same period. These include electricity generation, two-wheeler production, port cargo traffic and domestic airline passenger traffic. The RBI report notes that there are signs of moderation in urban demand. The finance ministry's report also acknowledges 'signs of softening in areas like construction inputs and vehicle sales'. Exports are another area of concern. Merchandise exports are up only 3 per cent in the year so far. Excluding petroleum, growth is better. But an uncertain trade environment and weak global demand hang heavy. As per the IMF, world trade is expected to grow at just 1.7 per cent this year, down 1.5 percentage points from its earlier assessment. The finance ministry's report also says the 'external challenges could potentially impact India's growth trajectory'. This will call for deft handling.
Mint
26-06-2025
- Business
- Mint
RBI asks all banks to ensure 50 bps rate cuts are passed on to customers swiftly
Weeks after slashing its repo rate by 50 basis points, the Reserve Bank of India in a report suggested that all banks should swiftly bring down their interest rates to ensure speedy transformation of the policy. According to an article published in the central bank's June bulletin, the RBI stressed that the financial conditions remained favourable for facilitating an efficient transmission of rate cuts by banks. It may be noted that since the RBI cut rates in February and April, most banks have passed down the same to their customers. SBI, Bank of Baroda, and HDFC Bank are among the lenders that have already passed on the benchmark lending rate-linked interest rate to borrowers by the same margin within days of the RBI cutting repo rate by a jumbo 50 bps on June 6. 'Financial conditions remained conducive to facilitate an efficient transmission of rate cuts to the credit market,' as per an article on 'State of the Economy' in the Reserve Bank's June 2025 Bulletin. The RBI had in June also announced a reduction in the cash reserve ratio (CRR) by 100 bps to 3 per cent of net demand and time liabilities (NDTL) in a staggered manner during the latter half of the year. The reduction in CRR would release primary liquidity of about ₹ 2.5 lakh crore into the banking system by December 2025. "Besides providing durable liquidity, it will reduce the cost of funds for banks, thereby facilitating monetary policy transmission to the credit market," the article added. The central bank, however, said that the views expressed in the Bulletin article are those of the authors and do not represent the views of the Reserve Bank of India. The article noted that the 50-bps cut in the policy repo rate during February-April 2025 reflected in banks' repo-linked external benchmark-based lending rates (EBLRs) and marginal cost of funds-based lending rate (MCLR). Consequently, the weighted average lending rate (WALR) on fresh and outstanding rupee loans of banks declined by 6 bps and 17 bps, respectively, during the period February-April 2025. On the deposit side, the weighted average domestic term deposit rates (WADTDRs) on fresh and outstanding deposits moderated by 27 bps and 1 bp, respectively, during the same period. According to the article, during the current easing cycle (February-April 2025), the decline in the WALR on fresh rupee loans was marginally higher for public sector banks (PSBs) as compared to private sector banks (PVBs). For outstanding loans, the transmission was higher for PVBs. In case of deposits, PSBs reduced their fresh term deposit rates by a higher magnitude as compared to PVBs.
Time of India
26-06-2025
- Business
- Time of India
All banks need to swiftly pass on 50-bps rate cut to customers: RBI Bulletin
The Reserve Bank of India has urged all banks to reduce their lending rates to support faster and more efficient transmission of recent policy rate cuts to borrowers, according to an article in its June 2025 Bulletin. The RBI had earlier this month cut the key repo rate by a sharp 50 basis points. The article, titled State of the Economy , stated that financial conditions remained favourable for an effective transmission of rate cuts into the credit market. "Financial conditions remained conducive to facilitate an efficient transmission of rate cuts to the credit market," the authors wrote. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like The Simple Morning Habit for a Flatter Belly After 50! Lulutox Undo Most banks have already passed on the earlier cuts from February and April to borrowers. Large lenders such as State Bank of India , Bank of Baroda and HDFC Bank had transmitted the 50 bps reduction in repo rate to their customers within days of the June 6 announcement, PTI said. The RBI had also reduced the cash reserve ratio (CRR) by 100 basis points to 3% of net demand and time liabilities (NDTL), with the cut to be implemented in a staggered manner through the latter half of the year. Live Events According to the article, the CRR reduction is expected to inject around ₹2.5 lakh crore of primary liquidity into the banking system by December 2025. "Besides providing durable liquidity, it will reduce the cost of funds for banks, thereby facilitating monetary policy transmission to the credit market," the authors wrote. The article clarified that the views expressed were those of the authors and not the official stance of the RBI. The article said that the 50-bps policy repo rate cuts between February and April had already reflected in banks' lending benchmarks, including external benchmark-based lending rates (EBLRs) and marginal cost of funds-based lending rates (MCLR). As a result, the weighted average lending rate (WALR) on fresh rupee loans fell by 6 basis points, while the WALR on outstanding rupee loans dropped by 17 basis points between February and April. On the deposit side, the weighted average domestic term deposit rates (WADTDRs) on fresh deposits fell by 27 basis points, while those on outstanding deposits saw a marginal decline of 1 basis point during the same period. The article further said that public sector banks (PSBs) had cut their WALR on fresh rupee loans by a slightly higher margin compared to private banks (PVBs). However, in the case of outstanding loans, the fall in WALR was greater for PVBs. Similarly, PSBs reduced their fresh term deposit rates more than PVBs did during this easing cycle, the article said. (with PTI inputs)
News18
26-06-2025
- Business
- News18
Stock Market Updates: Sensex Jumps 150 Points, Nifty Near 25,300; BEL, Nestle Top Gainers
Among the top movers were BEL, Bharti Airtel, Eternal, Tata Motors, Tata Steel, Maruti Suzuki, and Mahindra & Mahindra, providing support to the market. In the broader market, the Nifty MidCap index edged 0.18% higher, while the Nifty SmallCap index climbed 0.46%, indicating continued investor interest beyond frontline stocks. India's economy continues to show resilience despite global headwinds, according to the Reserve Bank of India's latest 'State of the Economy' report. The central bank highlighted that a 100 basis point cut in the repo rate to 5.5 per cent since February, along with a phased 100 bps reduction in the Cash Reserve Ratio (CRR) from September 6, will inject around Rs 2.5 trillion into the system. This is expected to ease funding costs and improve credit transmission in the broader economy. Global cues Asia-Pacific markets opened on a mixed note Thursday, with investors keeping a close watch on the ongoing ceasefire developments between Israel and Iran. Last checked, Nikkei was up 0.98 per cent, while the broader Topix popped 0.48 per cent. The Kospi slipped 0.51 per cent, and aASX 200 was down 0.11 per cent. US stock futures were largely unchanged. S&P 500, Nasdaq 100, and Dow Jones Industrial Average futures all hovered near the flatline. On Capitol Hill, Federal Reserve Chair Jerome Powell maintained a cautious tone on inflation and tariffs during his second day of testimony. While not committing to a timeline for interest rate cuts, Powell reiterated that rate reductions could be considered if inflation proves to be transitory — a stance he also took during his earlier testimony before the House Financial Services Committee. This comes amid mounting pressure from President Donald Trump for the Fed to ease rates.
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Business Standard
26-06-2025
- Business
- Business Standard
Stock Market LIVE: GIFT Nifty up; Asia mixed on easing Middle East tensions
Sensex Today | Stock Market LIVE on Thursday, June 26, 2025: Around 6:55 AM, GIFT Nifty futures were trading 41 points higher at 25,293, indicating a positive start for the bourses. 7:07 AM Stock Market LIVE Updates: Plan to double projects to ₹5 trillion this year, says Nitin Gadkari Stock Market LIVE Updates: In a free-wheeling conversation in New Delhi, Union Minister of Road Transport and Highways Nitin Gadkari spoke with Business Standard on why elections should not matter while setting targets, his take on being seen as a future prime minister, and much more. On being asked about construction target for this year, he said, "We have been trying to increase the target and execution but we have not been able to do it so far. We had reached 40 km per day. The ideal target for us is 100 km per day (36,500 km for the year). We are reforming policies… The true test of leadership is to convert the impossible into possible." READ MORE 7:05 AM Stock Market LIVE Updates: RBI bulletin: India's economic activity 'resilient' amid global flux Stock Market LIVE Updates: Economic activity is holding firm in India amid a challenging global environment, and financial conditions remained conducive to facilitate an efficient transmission of interest rate cuts to the credit market, Reserve Bank of India officials said in a report on the 'State of the Economy' in its monthly bulletin. The rate setting panel of the central bank has cut the policy repo rate by 100 basis points (bps) to 5.5 per cent in quick succession between February and June. Moreover, the 100 bps cut in banks' cash reserve ratio requirements to be implemented in phases, starting from the fortnight beginning 6 September 2025, will release primary liquidity of ₹2.5 trillion. This will reduce the cost of funds for banks, thereby facilitating monetary policy transmission to the credit market, the report noted. READ MORE 7:03 AM Stock Market LIVE Updates: Dixon Technologies stock weighed down by the competition concerns Stock Market LIVE Updates: Increasing competition in the electronics manufacturing services (EMS) industry is impacting valuations. Market leader Dixon Technologies has been hit hard though it remains the leader in an industry with strong growth. Listed players such as Kaynes Technology, Avalon Technologies, Syrma SGS Technology, Cyient DLM, Data Patterns, Dixon, and Amber Enterprises have all seen some price correction. This comes despite orders from aerospace, industrials, automotive, and infrastructure sector clients. 7:02 AM Stock Market LIVE Updates: NSE lays the ground work for an early launch of electricity futures Stock Market LIVE Updates: The National Stock Exchange (NSE) is set to launch monthly contracts for electricity futures and has begun registering market participants. The exchange is also considering a later launch of 'Contract for Difference' (CfD) for renewable energy companies. The announcement of the launch is expected by mid-July, as discussions with market participants are ongoing. NSE received approval from the market regulator for the launch on June 11. Similarly, the multi-commodity exchange (MCX) has also received approval from securities and exchange board of India (Sebi) to launch electricity derivatives. READ MORE 7:01 AM Stock Market LIVE Updates: HDB Financial IPO subscribed 37% on Day 1; HNIs, staff lead bids Stock Market LIVE Updates: HDB Financial Services' initial public offering (IPO) garnered 37 per cent subscription on Wednesday, the opening day of the issue. The institutional investors subscribed about a per cent, the high net worth individual (HNI) portion of the issue was subscribed 76 per cent, and the retail investor portion was 30 per cent. The portion reserved for employees was subscribed 1.7 times, and the one reserved for shareholders was subscribed 70 per cent. A day earlier, the NBFC major had allotted shares worth ₹3,369 crore to anchor investors. Life Insurance Corporation, ICICI Prudential Mutual Fund, Nippon Life, and Goldman Sachs Funds were among those applied in the anchor category.
