The Reserve Bank of India (RBI) kept its main policy rates unchanged on Friday, for the sixth time in a row and at record lows, as part of its “accommodative approach to revive and maintain growth on a sustainable basis” as the coronavirus pandemic entered its second wave. “The Monetary Policy Committee (MPC) voted to retain the status quo, which means the repo rate will remain at 4%.MPC also agreed to keep its accommodative stance for as long as it is required to revive and maintain growth on a long-term basis, as well as to mitigate the effect of Covid on the economy,” RBI governor Shaktikanta Das said after the three-day meeting in Mumbai.
“At this juncture, the MPC believes that policy support from all sides is needed to reclaim the growth momentum seen in the second half of 2021 and to nurture the recovery once it has taken root,” Das said.
Das added that the RBI held the reverse repo rate, or borrowing rate, at 3.35 percent. Owing to the effects of the second wave of the coronavirus pandemic, the central bank lowered its forecast for economic growth for the current fiscal year to 9.5 percent from a previous outlook of 10.5 percent. Bank rates and the Marginal Standing Facility (MSF) rate were also held at 4.25 percent.
Since March2020, the RBI has cut the repo rate, or main lending rate, by a total of 115 basis points (bps) to cushion the blow of the coronavirus pandemic. On June1, the MPC, the RBI’s rate-setting council, began its three-day monetary policy deliberations.
On May22,2020, the central bank cut its policy rate to a historic low in an off-policy period to boost demand. “The conduct of monetary policy in 2021-22 will be driven by changing macroeconomic conditions, with a bias to remain supportive of growth until it gains traction on a durable basis while ensuring that inflation remains within the target,” the RBI said in its annual report released last month.
The central bank will also ensure that system-level liquidity remains comfortable during2021-22, in line with the stance of monetary policy, and that monetary transmission continues unhindered while financial stability is maintained, according to the study.
The Indian economy grew by 1.6 percent in the first quarter of this year compared to the same period last year, but contracted by 7.3 percent for the entire fiscal year, the worst in more than 40 years.
Bitcoin suffers a setback as a result of Elon Musk’s tweet, but a weekly gain is anticipated.
Bitcoin fell more than 3% on Friday after Tesla CEO Elon Musk hinted at a split with the cryptocurrency in a tweet, but it is still on track for its best weekly gain in about a month as it seeks to recover from the crash in May.
Bitcoin was last trading at$37,809, down about 3.6 percent. Above a meme that seemed to show a couple discussing their breakup, Musk tweeted “#Bitcoin” and a heartbreak emoji. This week, Bitcoin has gained 6.3 percent.
Musk has long been a proponent of cryptocurrencies, but his support for bitcoin has waned after Tesla’s decision to stop accepting it as a form of payment for cars due to doubts about its energy use.
SoftBank is planning a $700 million investment in Flipkart.
SoftBank Group Corp. is in negotiations with Flipkart to invest $700 million in the internet retailer, according to two people familiar with the matter. SoftBank sold its entire interest in Flipkart to Walmart Inc. three years ago.
SoftBank’s Vision Fund 2 is considering a $1.2-1.5 billion investment in Flipkart, according to people familiar with the matter who spoke on the condition of anonymity. Flipkart is expected to be valued at $28 billion in the acquisition, according to one source, with the deal expected to close in 3-4 months.
Depending on the final group of buyers, the deal may be worth as much as $30 billion, according to the second person. According to the people, Prosus Ventures, the investment arm of South African conglomerate Naspers, and other established investors can increase their stakes.
According to the first individual, the deal will take place before the Indian e-commerce giant’s planned listing, which is expected to happen within the next 12-18 months. According to the second person, investors who have signed up for the current round expect Flipkart’s valuation to grow to about $35-40 billion by then, with online sales surging due to the pandemic.
According to the second person, Singapore’s sovereign wealth fund GIC and Canadian pension fund CPPIB are also in talks to invest in Flipkart. The Economic Times was the first to announce this on May 11.
According to the sources mentioned above, Flipkart is unlikely to seek additional funding before its IPO. Flipkart’s transaction is being handled by investment banks JP Morgan and Goldman Sachs.
SoftBank is the company’s second investment in Flipkart. It left the organisation in May of this year. The proposed deal is also almost twice as expensive as when it sold its interest three years earlier.
In August2017, SoftBank’s Vision Fund 1 invested $2.5 billion in Flipkart, but sold its roughly 20% stake a year later after Walmart agreed to purchase a majority stake in the startup for $16 billion. SoftBank made a $1.5 billion profit after selling its share for $4 billion. According to Business Standard, the exit allowed the Japanese investor to pay a steep 43 percent short-term capital gains tax, for which the fund had set aside $648 million.
This year, SoftBank Vision Fund 2 has made some bold bets in India. It is now planning to invest in food delivery unicorn Swiggy, marking the company’s first foray into the foodtech sector.
Last month, SoftBank invested more than $1 billion in banking technology company Zeta. Its planned investment in OfBusiness is also expected to propel the B2B marketplace into unicorn territory.
JP Morgan and SoftBank declined to comment. On Thursday evening, Flipkart, Goldman Sachs Ventures, Prosus, GIC, and CPPIB did not immediately respond to a request for comment.
Meanwhile, SoftBank is considering selling $1.5 billion in shares as the first tranche of dilution in the planned initial share sale of One97 Communications Ltd, the company that operates Paytm.
