{"id":38470,"date":"2016-11-30T09:49:19","date_gmt":"2016-11-30T09:49:19","guid":{"rendered":"http:\/\/greattelangaana.com\/english\/?p=38470"},"modified":"2016-11-30T09:55:17","modified_gmt":"2016-11-30T09:55:17","slug":"interest-rates-will-come-down","status":"publish","type":"post","link":"https:\/\/greattelangaana.com\/english\/interest-rates-will-come-down\/","title":{"rendered":"Interest rates will come down"},"content":{"rendered":"<p style=\"text-align: justify;\">As expected after the currency the bank interest rates are bound to come down according to the financial experts.<\/p>\n<p style=\"text-align: justify;\">In the first policy review post-demonetisation, the RBI is expected to cut rates \u201caggressively\u201d in the monetary policy review next month, according to a study by State Bank of India.<\/p>\n<p style=\"text-align: justify;\">\u201cWe expect the RBI now to cut rates aggressively in December up to 50 basis points. Our expectation of a sub 3.5 per cent inflation rate in November\/December now looks sacrosanct,\u201d said the study.<\/p>\n<p style=\"text-align: justify;\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-38474\" src=\"https:\/\/greattelangaana.com\/english\/wp-content\/uploads\/2016\/11\/download-15.jpg\" alt=\"Interest rates\" width=\"384\" height=\"286\" \/><\/p>\n<p style=\"text-align: justify;\">The reduction in interest rates by the RBI, according to the study, will be consistent with a lower term structure of interest rates that will \u201cenormously\u201d benefit banks at least in treasury gains for better provisioning when they have been entrusted with the \u201conerous\u201d task of mobilising the entire accretion in yearly deposits in less than two months.<\/p>\n<p style=\"text-align: justify;\">\u201cAdditionally, the loss to GDP will significantly widen the output gap, a perfect foil for cutting rates,\u201d it said.Referring to the RBI\u2019s directive to all scheduled commercial banks to maintain an incremental CRR of 100 per cent on the increase in NDTL between September 16 and November 11, the study said RBI should come clear on measures to be taken as part of a \u201creactive policy\u201d.<\/p>\n<p style=\"text-align: justify;\">Because of the incremental CRR move, the total CRR requirement for banks will be around \u20b98 lakh crore. To manage their liquidity position, banks will have to resort to selling of government securities under repo operations.<\/p>\n<p style=\"text-align: justify;\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-38477\" src=\"https:\/\/greattelangaana.com\/english\/wp-content\/uploads\/2016\/11\/1479222975-9185.jpg\" alt=\"Interest rates\" width=\"620\" height=\"464\" \/><\/p>\n<p style=\"text-align: justify;\">The imposition of 100 per cent incremental CRR seems unprecedented and is the first time in history.The move has come to absorb excess liquidity in the system. Liquidity, which was in deficit mode in the first three months of this fiscal (wtih an average of \u20b965,200 crore), has turned into surplus mode in the following months (with an average of \u20b931,200 crore in July-October).<\/p>\n<p style=\"text-align: justify;\">\u201cThis surplus has jumped significantly to an average of \u20b91,86,000 crore in November 26, owing to demonetisation,\u201d as per the study.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>As expected after the currency the bank interest rates are bound to come down according to the financial experts. In the first policy review post-demonetisation, the RBI is expected to cut rates \u201caggressively\u201d in the monetary policy review next month, according to a study by State Bank of India. \u201cWe expect the RBI now to [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":38478,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,2],"tags":[17766,17768,14256,8393,17769,17767,8395,162],"class_list":["post-38470","post","type-post","status-publish","format-standard","has-post-thumbnail","category-politicalnews","category-top-stories","tag-bank-interest-rates","tag-crr","tag-demonetisation","tag-interest-rates","tag-liquidity","tag-loss-to-gdp","tag-rbi","tag-state-bank-of-india"],"jetpack_featured_media_url":"https:\/\/greattelangaana.com\/english\/wp-content\/uploads\/2016\/11\/interest-759.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/greattelangaana.com\/english\/wp-json\/wp\/v2\/posts\/38470","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/greattelangaana.com\/english\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/greattelangaana.com\/english\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/greattelangaana.com\/english\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/greattelangaana.com\/english\/wp-json\/wp\/v2\/comments?post=38470"}],"version-history":[{"count":0,"href":"https:\/\/greattelangaana.com\/english\/wp-json\/wp\/v2\/posts\/38470\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/greattelangaana.com\/english\/wp-json\/wp\/v2\/media\/38478"}],"wp:attachment":[{"href":"https:\/\/greattelangaana.com\/english\/wp-json\/wp\/v2\/media?parent=38470"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/greattelangaana.com\/english\/wp-json\/wp\/v2\/categories?post=38470"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/greattelangaana.com\/english\/wp-json\/wp\/v2\/tags?post=38470"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}