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RBI to Go Fast With Rate Hikes This Year, Slow the Next – Reuters Poll

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(C) Reuters. FILE PHOTO: A man walks behind the Reserve Bank of India (RBI) logo inside its headquarters in Mumbai, India, April 8, 2022. REUTERS/Francis Mascarenhas

By Arsh Tushar Mogre and Prerana Bhat

BENGALURU (Reuters) – The Reserve Bank of India will concentrate interest rate hikes over the coming months in a relatively short tightening cycle, according to a Reuters poll of economists who expect the repo rate to reach its terminal level early next year.

Following a surprise rate rise on May 4, several members of the Monetary Policy Committee called for more in upcoming meetings this year to control sticky price pressures, which hit an eight-year high last month.

That sentiment was echoed in a May 26-June 1 Reuters poll that predicted the central bank would raise its key policy rate by at least 100 basis points over the next four MPC meetings.

The RBI was expected to follow up its unscheduled 40 basis point repo rate hike in May to 4.40% with another move at the policy meeting on June 8 – a “no-brainer” according to governor Shaktikanta Das.

By how much was unclear as forecasts were split six ways, ranging between 25 and 75 basis points. That is only marginally changed from the seven-way split in a similar poll taken a month ago. [RBI/INT]

The repo rate was expected to reach its pre-pandemic level of 5.15% or higher next quarter, according to 41 of 47 respondents. It will end the year at 5.50%, the median showed, 110 basis points above where it is now and 19 of 47 saw it even higher.

“Most of the hikes will come this year and we expect this cycle to end in April next year…the urgency for more hikes will continue to diminish from Q4 (2022) onwards,” said Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomics.

Indeed, the predicted tightening path for next year was more subdued with only 40 basis points pencilled in the first half before a pause, poll medians showed.

“The RBI was very much behind the curve in terms of its thinking on inflation and what to do on interest rates. It still seems to me they have rose tinted glasses in terms of the future outlook of prices,” Chanco added.

While inflation looks set to remain elevated, reflecting high global energy and food costs, economic growth prospects have started to look bleak. GDP growth slowed to its weakest in a year last quarter on a year ago, the third consecutive slowdown.

This may lead the RBI – which had long prioritised growth over inflation, holding rates steady until abruptly raising them at an unscheduled meeting – to consider ending this tightening cycle less than a year after starting it.

When asked what the terminal repo rate would be, 14 of 26 economists said 6.00% or higher, while the rest pencilled in a lower rate. Forecasts ranged from 5.15-6.50%.

Nearly two-thirds of respondents, 17, said the terminal rate would be reached by end-Q2 2023, roughly in line with the median from the quarterly forecasts. Six said the second half of 2023, while only three said the cycle would go on until 2024.

But economists said much would depend on price pressures over the coming months.

Suvodeep Rakshit, senior economist at Kotak Institutional Equities, said if inflation were to remain in the 6%-7% range well into the current and next fiscal year, the terminal rate would have to be higher than he currently expects.

“We have to shift it (the terminal rate) higher, closer to where you’re seeing your one-year-ahead inflation pan out. It is not a number cast in stone, it will evolve along with the inflation trajectory.”

RBI to go fast with rate hikes this year, slow the next – Reuters poll

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Original Source: investing.com

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Sri Lanka Central Bank Holds Rates Steady, Says Mkt Interest Rates Must Fall

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Sri Lanka cenbank holds rates steady as expected amid slowing inflation By Reuters

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Economy 8 minutes ago (Nov 23, 2022 09:31PM ET)

(C) Reuters. FILE PHOTO: People walk past the main entrance of the Sri Lanka’s Central Bank in Colombo, Sri Lanka March 24, 2017. REUTERS/Dinuka Liyanawatte

COLOMBO (Reuters) – Sri Lanka’s central bank held rates on Thursday, adding it expects a moderation in market interest rates in line with the prevailing policy interest rates.

The Standing Lending Facility rate was held steady at 15.50% while the Standing Deposit Facility Rate was kept unchanged at 14.50%.

“The Board was of the view that the prevailing tight monetary policy stance is necessary to rein in any underlying demand pressures in the economy,” the central banks said in a statement.

Sri Lanka cenbank holds rates steady as expected amid slowing inflation

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S.Korean central bank hikes rates by 25 bps, slows tightening paceBy Reuters – Nov 23, 2022

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China’s Country Garden Gets New Credit Line of up to $7 Billion – Securities Times

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China’s Country Garden gets new credit line of up to $7 billion – Securities Times By Reuters

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(C) Reuters. FILE PHOTO: The logo of property developer Country Garden is seen on a building in Dalian, Liaoning province, China May 7, 2017. REUTERS/Stringer

HONG KONG (Reuters) – Major Chinese developer Country Garden has signed a contract with the Postal Savings Bank of China for a credit line of up to 50 billion yuan ($7.0 billion), Securities Times reported on Thursday.

The credit line will be used for loans for land development, mergers and acquisitions, and mortgage financing, it said. On Wednesday, three other commercial banks agreed to provide fundraising support to property developers, including industry giant Vanke, in a coordinated effort to support the country’s embattled property sector.

($1 = 7.1429 Chinese yuan renminbi)

China’s Country Garden gets new credit line of up to $7 billion – Securities Times

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(C) 2007-2022 Fusion Media Limited. All Rights Reserved.

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

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North Korea Slams South Korea’s Yoon, Warns Sanctions Will Fuel More Hostility

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North Korea cautions sanctions and pressure will fuel more hostility By Reuters

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(C) Reuters. FILE PHHOTO: A North Korean flag flutters at the propaganda village of Gijungdong in North Korea, in this picture taken near the truce village of Panmunjom inside the demilitarized zone (DMZ) separating the two Koreas, South Korea, July 19, 2022. REUTE

By Soo-hyang Choi

SEOUL (Reuters) – North Korea on Thursday denounced Seoul’s push to impose additional sanctions on Pyongyang following its repeated missile launches, saying such measures will add to the North’s “hostility and anger,” state media KCNA reported.

North Korean leader Kim Jong Un’s powerful sister, Kim Yo Jong, made the remarks in a statement carried by KCNA, calling South Korean President Yoon Suk-yeol “and other idiots” a “faithful dog” of the United States.

South Korea’s foreign ministry said on Tuesday it was reviewing independent sanctions on Pyongyang. It said sanctions on the cyber sector were among those considered in case the North pushes ahead with a nuclear test.

North Korea has conducted an unprecedented number of ballistic missile launches this year. For months Washington has said North Korea could conduct a nuclear bomb test, the first since 2017, at any time.

“If they think that they can escape from the present dangerous situation through ‘sanctions,’ they must be really idiots as they do not know how to live in peace and comfort,” Kim Yo Jong said in the statement.

The United States has urged the United Nations Security Council to hold North Korea accountable for its missile tests in one voice, accusing China and Russia of “emboldening” Pyongyang by blocking Security Council action.

China and Russia backed tighter sanctions following Pyongyang’s last nuclear test in 2017, but in May both vetoed a U.S.-led push for more U.N. penalties over its renewed missile launches.

“We warn the impudent and stupid once again that the desperate sanctions and pressure of the U.S. and its South Korean stooges against the DPRK will add fuel to the latter’s hostility and anger,” Kim Yo Jong said, using the initials of the North’s official name.

North Korea cautions sanctions and pressure will fuel more hostility

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Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

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Original Article: investing.com

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