The Repo Rate Hike: Inflation Gave the Cover, the Rupee Gave the Reason

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SumanSpeaks Independent Capital Markets & Geopolitical Intelligence RBI Policy Decoded The Repo Rate Hike: Inflation Gave the Cover, the Rupee Gave the Reason The RBI raised the repo rate by 25 basis points to 5.50 percent on 7 October 2026. With the rupee at ₹96.78 to the dollar, the Fed at 3.75–4.00 percent and bank credit growing near 18 percent, the fuller story is bigger than August CPI of 4.8 percent. The Reserve Bank of India raised the repo rate by 25 basis points to 5.50 percent on 7 October 2026. It is the first hike since February 2023, and the stance has moved from neutral to calibrated tightening. The rate decision was unanimous. The Governor cited inflation. The Monetary Policy Committee said the inflation outlook is no longer as comfortable as it was last year, and near-term rate cuts were taken off the table. That is the official story, and it is not wrong. But it is incomplete. Look at what surrounds the decision: a rupee near its record...
CENTRAL BANKS: RESULTS NOT THAT BAD
Central Bank of India has announced the following results for the quarter ended June 30, 2013: The Unaudited Standalone results for the Quarter ended June 30, 2013:

The Bank has posted a net profit after tax of Rs. 219.30 million (Rs.21.93 Cr) for the quarter ended June 30, 2013 as compared to Rs. 3359.50 million (Rs.335.95) for the quarter ended June 30, 2012. Total Income has increased from Rs. 56249.70 million for the quarter ended June 30, 2012 to Rs. 64434.50 million (Rs.644.35 Cr) for the quarter ended June 30, 2013.

BUT WHAT MOST OF US MISSED IS THAT THE NET PROFIT TOOK A HIT DUE TO HIGH PROVISIONING.
The operating profit in Q1FY13 is Rs.1000.57 Cr as against Rs.792.91 Cr on Q-o-Q basis. So, is this bad, in any case?

The provisions and Contingencies has increased from Rs.352.94 Cr in Q1FY13 to Rs.983.26 Cr in Q1FY14. This has actually dented the net profit margins.

Hence the results are not that bad as is made out to be. Still the bank is profit making organization.

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