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RBI Holds Repo Rate At 6% in First Monetary Policy Review et al

Professor of Financial Economics and Part-time Value Investor, Transfin.
Apr 5, 2018 1:28 PM 2 min read
Editorial

End of Day Wrap-up (Thursday / April 05, 2018) #RBI #interestrates #BinaniCement #SC #NCLT #debt #badloan #RCom #SBI #AirIndia #BMW #Mercedes #Tesla #Facebook #MarkZuckerberg #CambridgeAnalytica #Transfin

Editor's comment: RBI holds repo rate at 6% (neutral stance) and cash reserve ratio at 4% in 1st Monetary Policy Review for FY18-19, as per wider market expectations. The Monetary Policy Committee cited HRA to have inflationary effects and uncertainties to originate from the revised formula for MSP. Vote in favour of hold was 5-1.

 

Lenders to Binani Cement opt out of voting on UltraTech's INR7,266cr acquisition offer outside the bankruptcy proceedings. Banks have in turn asked Binani to obtain a Supreme Court approval for the deal. Since the NCLT has been unable to strike a deal outside the insolvency proceedings, a higher court's approval is being sought.

 

Supreme Court rejects plea of RCom and SBI challenging a stay on the asset sale to Reliance Jio. Parties asked to approach NCLAT to resolve. Unsecured creditors such as Ericsson concerned that the sale would negatively affect their recovery.

 

Government of India may completely exit Air India by selling its residual stake to LIC and other financial institutions. 76% equity stake is currently under sale, 4% will be converted into ESOPs, and 20% may be sold to LIC etc.

 

Facebook CEO Mark Zuckerberg says he hasn't observed any "meaningful impact" on the business, despite multiple revelations post Cambridge Analytica.

 

Chinese import tariffs to hit BMW, Mercedes, and Tesla the most. Tariff to affect cars manufactured overseas, whereas most American brands produce domestically as part of local JVs.