Issue: 1346
· India, UK agree to annual
data exchange to track use of trade pact benefits.
· Positive inflows into gold
ETFs continue for the 12th week in a row.
· Tamil Nadu eyes $1.5 trillion
economy by 2036, bets on six cities beyond Chennai.
· RBL Bank reported a 170% rise
in its net profit to Rs 482 crore for the September quarter, supported by strong
growth in net interest income.
· IHC, First Abu Dhabi eye
stake in Bandhan Bank promoter.
· CreditAccess Grameen to raise
$175 million overseas loans from DBS, Standard Chartered and others.
· India's poverty rate seen
falling by 2.1% to 12.1% by 2028: World Bank.
RBI measures, intervention
spark rupee's sharpest rally in six months: The Indian rupee rose about 1% on Monday after the
central bank took steps to temper dollar demand in spot and derivatives markets,
with likely intervention through dollar sales adding to the gains. The rupee rose 1% to
95.77 per dollar from 96.73 on Friday, outperforming mostly rangebound Asian
peers and posting its best single day gain since April, which had also been
sparked a set of measures to shore up the unit. India announced new steps on
Saturday after the rupee neared its record low of 96.96 per dollar last week. The oil window is
expected to take out about $10-12 billion of monthly dollar demand from the
spot market, per government data on oil imports. The recent moves follow a series of other measures
taken to shield the currency and bolster the country's balance of payments
strained by a heavy import bill due to high oil prices and persistent capital
outflows.
(Moneycontrol)
Retail inflation jumps to
21 months high of 5.54% in September: The base effect, combined with
rising food prices, pushed retail inflation, measured by the Consumer Price
Index (CPI), to a 21-month high of 5.54 per cent in September, according to
government data released on Monday. This is close to the upper end of the
targeted inflation range of 2-6 per cent. Inflation was 4.83 per cent in August
this year and 1.54 per cent in September last year. Experts expect inflation to
rise further in the coming months, setting the stage for more rounds of policy
interest rate hikes by the Monetary Policy Committee. Earlier this month, the
rate was hiked after a 4-year gap.
(Business Line)
Nobel Prize 2026 in
economics goes to Robert E Hall, Michael Woodford for microeconomic research: The Royal Swedish Academy of
Sciences has awarded the 2026 Sveriges Riksbank Prize in Economic Sciences in
Memory of Alfred Nobel to economists Robert E Hall and Michael Woodford for
their work on the microeconomic foundations of macroeconomic stabilisation. According
to the academy, the economists were recognised for their work on the
“microeconomic foundations of macroeconomic stabilisation”, an approach that
strengthens the link between individual economic behaviour and overall economic
performance. Macroeconomic stabilisation
refers to measures taken by governments and central banks to limit economic
volatility and maintain steady growth. Such measures can include monetary
policy decisions, interest-rate adjustments and fiscal interventions.
(Business Today)
Banks seek RBI relief, more
time on strict forex curbs: Banks and foreign exchange
market participants have approached the Reserve Bank of India’s (RBI) seeking
relaxation of its stringent forex trading restrictions, an extension of the
implementation deadline and clarity on operational issues, even as the central
bank’s measures helped the rupee stage a sharp recovery on Monday. The domestic
currency surged 96 paise, or nearly 1%, to close at 95.78 against the dollar,
marking its second-largest single-day gain since April 2, as the RBI’s
aggressive measures to arrest its slide took effect. On Saturday, the RBI announced
a three-pronged strategy to support the rupee. It opened a special dollar window
for state-owned oil marketing companies (OMCs), tightened restrictions on
foreign exchange derivatives and imposed additional reserve requirements on
banks. The biggest concern is the
requirement that banks maintain a foreign exchange risk reserve (FERR) with the
RBI equivalent to 20% of the rupee value of the notional amount of each
qualifying transaction exceeding $2 million.
(Financial Express)
DBS Chief sees overseas
confidence in India despite capital outflow concerns: DBS Bank CEO Tan Su Shan
emphasized the strong demand for FCNR(B) deposits as investor confidence in
India. She highlighted India's potential for foreign direct investment and its
advantageous position in the artificial intelligence sector. Despite foreign
net sales affecting the rupee, she remains optimistic about India's economic
growth and digital infrastructure. Tan discussed the importance of promoting
FDI and exports to stabilize currency levels.
(Economic Times)
Account aggregator network
gets a rate card; tech middlemen cut out: After three years of
deliberation, the account aggregator (AA) ecosystem is set to get a standard
pricing model for the first time, according to three people aware of the matter
and a circular reviewed by Business Standard. Once the pricing comes into
effect from November 1, 2026, financial firms that pull customer data through
the AA network will pay a standard fee, said the circular and the sources. It
would be split among the entity that holds the data, the AA that carries it,
and Sahamati, the network’s self-regulatory body. Entities participating in the AA ecosystem
cannot directly charge customers for sharing data through the network,
according to the circular from Sahamati, the Reserve Bank of India
(RBI)-recognised self-regulatory organisation for the ecosystem.
(Business Standard)
Equity mutual fund inflows
hit 5-month high on small, midcap rush: Net inflows into schemes of
active equity mutual funds (MFs) rose 31 per cent in September over August,
reaching a five-month high of Rs.38,307 crore, as investors continued to ramp
up allocation to midcap and smallcap funds. The two categories, which have seen
their combined net inflows increase in each of the past four months, attracted
a record Rs.15,740 crore in September, up 5 per cent over August.
(Business Standard)
Commerce and Industry
Minister Shri Piyush Goyal Calls for Doubling India-UK Bilateral Trade by 2030:
Union Minister for
Commerce and Industry Shri Piyush Goyal has called upon businesses in India and
the United Kingdom to translate the opportunities created by the India-UK
Comprehensive Economic and Trade Agreement (CETA) into expanded trade,
investment, partnerships and job creation. Addressing the JETCO Business
Plenary under the 16th Session of the India-UK Joint Economic and Trade
Committee (JETCO), he said the two countries should aim to double bilateral
trade by 2030 and make the India-UK Vision 2035 a framework for greater
economic ambition and cooperation.
(PiB)
AI investment keeps global
growth around 3%, with major Asia benefits: IMF: Strong investment in AI infrastructure ?is
keeping global growth at around 3%, yielding major benefits for many Asian
economies that supply ?the hardware, such as ?Thailand, said ?Kristalina
Georgieva, managing director of the ?International Monetary Fund. The artificial
intelligence investment boom was a "demand shock, an investment
shock" that ?could boost growth in ?advanced regional economies by a half
?to one full percentage point, and emerging Asian economies by 0.2 to ?0.8
percentage ?point, she said.
(Business Standard)
Sebi notifies common ad
code, allows celebrity endorsements for brands: Market regulator Sebi has notified a common
advertisement code for market intermediaries, allowing them to engage
celebrities for brand or entity-level promotion and prohibiting endorsements of
specific financial products or services. The Common Advertisement Code (CAC) will apply to
regulated entities -- stock brokers, depository participants, investment
advisers, research analysts, online bond platform providers, portfolio managers,
and mutual funds/asset management companies. In a notification dated October 8,
Sebi said, "The celebrities shall be allowed to endorse the regulated
entity at the brand level or the entity level. Such endorsements may include
the name of products or services offered by a regulated entity but may not
include any inducement or claim directly or indirectly regarding any specific
product or service".
(Business Standard)
SEBI notifies revamped PMS
regulations, common advertising code; new rules to take effect from April 2027: SEBI has notified revamped portfolio
management regulations, introducing separate net-worth requirements for regular
portfolio managers and entities exclusively offering the Portfolio Management
Service Route for Investment in Mutual Fund units (PRIM). The SEBI (Portfolio
Managers) Regulations, 2026, will come into effect from April 1, 2027,
replacing the 2020 regulations. Regular portfolio managers must maintain a
minimum net worth of Rs 5 crore, with at least 10 percent held in unencumbered
liquid assets. Existing managers have 12 months from commencement to comply.
Entities exclusively offering PRIM must maintain Rs 2 crore, with the same
liquid-asset condition. The minimum investment for regular PMS is Rs 50
lakh, compared with Rs 25 lakh under PRIM. The latter permits investment in
direct plans of domestic mutual funds, including index funds, exchange-traded
funds and specialised investment funds.
(Moneycontrol)
IRDAI may allow transition
period for insurance fee cap: IRDAI Chairman Ajay Seth said the regulator is
examining industry feedback on a consultation paper that is open until October
25, while maintaining that distribution costs must be aligned with the value
delivered to the policyholder, and selling incentives must reward persistency
rather than first-year sales.
(Economic Times)
Cabinet nod sought to
extend power fund for 5 years: The power ministry is pursuing Cabinet
approval for continuing the Power System Development Fund in upcoming finance
cycles. The fund supports essential projects for enhancing the reliability and
stability of India’s electricity grid. An allocation of around Rs.1,103 crore
has been earmarked for the fund in the union budget for FY27. Reports indicate
that India needs enhanced systems to manage its increasing renewable energy
capacity.
(Economic Times)
OUTPUT GAP
§ The
term output gap refers to the difference between the actual output of an
economy and the maximum potential output of an economy expressed as a
percentage of gross domestic product (GDP). A country's output gap may be
either positive or negative.
§ A
negative output gap suggests that actual economic output is below the economy's
full capacity for output while a positive output suggests an economy that is
outperforming expectations because its actual output is higher than the
economy's recognized maximum capacity output.
RBI KEY RATES
Repo
Rate: 5.50%
SDF:
5.25%
MSF
/Bank Rate: 5.75%
CRR:
3.00%
SLR:
18.00%
FOREX RATES (RBI REF. RATE)
INR
/ 1 USD : 95.7485
INR
/ 1 GBP : 126.9185
INR
/ 1 EUR : 107.3022
INR
/100 JPY: 60.4600
EQUITY INDEX
Sensex:
71924.68 (-547.65)
NIFTY:
22363.35 (-157.10)
Bnk NIFTY: 54918.00 (-338.65)
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