DECODE THE MONTH

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  CBS LINE

Volume 4(9)

🏛️ ECONOMIC POLICY

    🏦 RBI keeps rates on hold – the MPC maintained the repo rate at 5.25% and a neutral stance as growth remains strong but inflation risks are rising.

    💧 RBI absorbs ₹2.23 lakh crore – the central bank used a variable-rate reverse repo auction to pull excess liquidity out of banks.

    💰 Fiscal discipline remains a priority – the government says it will continue fiscal consolidation despite uncertainty around oil and fertiliser prices.

    👉 Do this: Keep borrowing manageable and don't assume today's interest rates will remain unchanged.

💳 FINTECH AND BANKING

    💧 Banking-system liquidity remains very high – surplus liquidity was estimated at around ₹6.94 lakh crore in mid-September, prompting RBI liquidity-absorption operations.

    🏦 RBI continues managing excess liquidity – alongside the ₹2.23 lakh crore VRRR auction, RBI announced government-security sales as part of its liquidity-management strategy.

    🏦 RBI continues managing excess liquidity – alongside the ₹2.23 lakh crore VRRR auction, RBI announced government-security sales as part of its liquidity-management strategy.

    📈 Bank credit remains strong – credit to industry and services grew 20.0% and 22.9%, respectively, in July according to government data.

    👉 Do this: For loans, compare the total borrowing cost—not just the headline interest rate.

🌍 INTERNATIONAL ECONOMICS

    🛢️ Oil crosses $100/barrel – West Asia tensions are pushing crude prices higher, creating risks for India's import bill and inflation.

    🌍 Global rates are turning tighter – the US Federal Reserve and Bank of Japan raised rates, putting additional pressure on emerging-market currencies.

    ⚠️ Trade uncertainty continues – India's exporters and importers remain exposed to changing global trade conditions and geopolitical disruptions.

    👉 Do this: Businesses dependent on imported fuel or raw materials should keep a buffer for higher costs.

📊 MACRO UPDATE

    📈 India's GDP grew 7.8% in Q1 FY27 – manufacturing and services supported strong growth, while investment rose 11.9% and household consumption grew 7.1%.

    📊 August exports jumped 25.41% year-on-year to an estimated $82.68B, while total imports rose 18.75% to $92.09B.

    💸 Rupee around ₹95.82/$ – the currency remained under pressure from oil prices and global interest-rate expectations, although portfolio inflows provided some support.

    📉 Inflation risk is back on the radar – July headline CPI reached about 4.5%, while the RBI kept its FY27 inflation forecast around 5.0%.

    👉 Do this: Keep some room in your budget for food, fuel and imported-product price increases.

Roshni Thayyil

Msc Econometrics and Financial Technology


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