How RBI scared Sensex, rupee virtually to death: 10 reasons why

Oct 05, 2018, 16:51 PM IST
GPlus

Almost every analyst had predicted a repo rate hike to be announced by the RBI Governor Urjit Patel led MPC. While 50 bps hike was bandied about, what was mostly expected was a 25 bps hike. Instead, RBI shocked with an announcement of a status quo at 6.50%! This immediately sent the Sensex crashing by 900 points and caused the rupee to plunge to an all-time low of 74.290 against the US dollar. Here is how RBI fourth bi-monthly monetary statement for 2018-19 scared the wits out of the markets:

1/11

RBI keeps rates unchanged

RBI keeps rates unchanged

1. RBI keeps key lending rate (repo) unchanged at 6.5 pc. Reverse repo rate stands at 6.25 pc, bank rate at 6.75 pc, CRR at 4 pc. (Image: Reuters)

GPlus
2/11

Inflation Projection

Inflation Projection

2. Projects retail inflation to rise to 3.8-4.5 pc in October-March. (Image: Reuters)

GPlus
3/11

Global Economy Outlook

Global Economy Outlook

3. Global economic activity becoming uneven, outlook clouded by uncertainties. (Image: Reuters)

GPlus
4/11

Oil Prices

Oil Prices

4. Rise in oil prices may have a bearing on disposable incomes, dent profit margins of corporates. Oil prices remain vulnerable to further upside pressures. (Image: Reuters)

GPlus
5/11

Domestic Macroeconomics

Domestic Macroeconomics

5. RBI calls for further strengthening of domestic macroeconomic fundamentals. (Image: RBI Youtube)

GPlus
6/11

Investment Activity

Investment Activity

6. Global, domestic financial conditions tightened, may dampen investment activity. (Image: RBI Youtube)

GPlus
7/11

Uncertain Exports

Uncertain Exports

7. Exports outlook uncertain. (Image: RBI Youtube)

GPlus
8/11

Fiscal Slippage

Fiscal Slippage

8. Fiscal slippage at the Centre/state to have a bearing on the inflation outlook, besides heightening market volatility and crowding out private investment. (Image: RBI Youtube)

GPlus
9/11

Inflation Risk

Inflation Risk

9. Inflation outlook needs a close vigil over the next few months, several upside risks persist. (Image: RBI Youtube)

GPlus
10/11

Global Cues

Global Cues

10. Trade tensions, volatile and rising oil prices, and tightening global financial conditions pose substantial risks to growth, inflation outlook. (Image: Reuters)

GPlus
11/11

Next RBI Meet

Next RBI Meet

** Next meeting of the MPC on December 3-5. (Image: RBI Youtube)

GPlus

By continuing to use the site, you agree to the use of cookies. You can find out more by clicking this link

Close