RBI Monetary Policy LIVE Updates: RBI keeps repo rate unchanged at 6.5%; raises FY25 GDP growth forecast to 7.2%

RBI MPC Meeting Live: RBI Governor proposes setting up of a digital payments intelligence platform for real-time data sharing across the system.

On inflation, we are on the right track, but there is still work to be done. Globally, there are concerns that the last mile of disinflation might be protracted and arduous amidst continuing geopolitical conflicts, supply chain disruptions and commodity price volatility. In India, with growth holding firm, monetary policy has greater elbow room to pursue price stability to ensure that inflation aligns to the target on a durable basis.

RBI MPC Meeting Live: RBI Governor Shaktikanta Das said that the central bank will take further steps to moderate unsecured loans and advances. He noted that few regulated entities were charging certain fees without proper disclosures.

RBI MPC Meeting Live: India’s banking system remains resilient backed by asset quality, rise in profitability. The NBFCs have displayed strong financials in FY24. The banking sector, NBFCs and overall financial sector remain robust.

RBI MPC Meeting Live: RBI Governor Shaktikanta Das, in his monetary policy speech, said that the central bank transferred ₹2.11 lakh crore to the union government as dividend. He added that the central board decided to keep the contingent reserve buffer of 6.5%. This risk provisioning of CRB will further strengthen RBI’s balance sheet.

RBI MPC Meeting Live: RBI retained inflation estimates for FY25 at 4.5%.

Q1FY25 inflation estimates retained at 4.9%

Q2FY25 inflation estimates retained at 3.8%

Q3FY25 inflation estimates retained at 4.6%

Q4FY25 inflation estimates retained at 4.5%

RBI MPC Meeting Live: RBI raised its GDP growth forecast for FY25 to 7.2% from 7% earlier. 

Q1FY25 GDP growth forecast increased to 7.3% from 7.1%

Q2FY25 GDP growth forecast increased to 7.2% from 6.9%

Q3FY25 GDP growth forecast increased to 7.3% from 7%

Q4FY25 GDP growth forecast increased to 7.2% from 7%

RBI MPC Meeting Live: RBI retained CPI inflation forecast for FY25 at 4.5%.

RBI MPC Meeting Live: RBI raised its GDP growth forecast for FY25 to 7.2% from 7% earlier.

RBI MPC Meeting Live: RBI’s MPC decided to keep the repo rate unchanged at 6.5% by a 4:2 majority. The rate-setting panel also decided to keep the stance of ‘withdrawal of accommodation’.

RBI MPC Meeting Live: RBI keeps repo rate unchanged at 6.5%, maintains stance of ‘withdrawal of accommodation’.

RBI MPC Meeting Live: We believe that the upcoming RBI MPC outcome is expected to maintain the status quo on interest rates, keeping them at 6.5% for the eighth consecutive policy meeting. Despite the recent election outcome and fluid political environment, the RBI will likely hold off on rate cuts until the full budget is presented in July 2024, providing a clearer fiscal perspective. The RBI may not change its monetary stance but could guide future shifts from “gradual withdrawal of accommodation” to “neutral.” Additionally, while inflation estimates for FY25 are expected to remain at 4.5%, an upgrade in GDP growth projections is possible, said Suman Bannerjee, CIO, Hedonova.

RBI MPC Meeting Live: The RBI Monetary Policy Committee (MPC) is likely to keep the repo rate unchanged at 6.5 percent as rise in food prices continues to pose a threat to inflation. While an immediate rate cut may not be on the radar, the potential reduction in the rates are likely to happen later in the year – maybe sometime around October this year. Forecasts regarding inflation might be revised down slightly, while growth predictions regarding GDP are expected to remain stable, said Atul Monga, CEO & Co-founder of BASIC Home Loan.

RBI MPC Meeting Live: The RBI is expected to maintain current policy rates to stimulate investment and consumption while carefully balancing the imperatives of fostering economic growth and mitigating inflationary pressures. Overall, we anticipate that investor sentiment will remain bullish, bolstered by the market’s ongoing resilience and consistent performance. This optimistic outlook is underpinned by several key factors, including robust economic indicators, favorable corporate earnings reports, and sustained confidence in future growth prospects. Additionally, the influx of institutional investments and the continued availability of liquidity are likely to support this positive market sentiment, ensuring that the bullish trend persists in the foreseeable future, said Swati Saxena, Founder & CEO – 4 Thoughts Finance, a wealth management firm.

RBI MPC Meeting Live: Here are the key highlights of RBI April policy:

Policy Measures:

• Repo rate kept unchanged at 6.5%
• Policy stance of ‘withdrawal of accommodation’ maintained 
• GDP growth forecast for FY25 at 7%. The quarterly projections are – Q1 at 7.1%; Q2 at 6.9%; Q3 at 7% and Q4 at 7%.
• CPI inflation forecast for FY25 at 4.5%. Here are detailed inflation forecast: Q1 at 4.9%; Q2 at 3.8%; Q3 at 4.6% and Q4 at 4.5% 

Non-policy measures:

• Scheme for trading of sovereign green bonds at IFSC to be announced
• Introduction of a mobile app to access RBI’s Retail Direct Scheme for participation in GSec market
• Draft circular for LCR framework for banks to be issued shortly
• Dealing in rupee interest rate derivate products for all small finance banks
• Enabling UPI for Cash Deposit Facility
• UPI access for Prepaid Payment Instruments (PPIs) through third-party applications
• Distribution of CBDCs through Non-bank Payment System Operators

RBI MPC Meeting Live: The Indian rupee was little changed while dollar-rupee forward premiums edged lower ahead of the RBI monetary policy decision. The rupee was at 83.4750 against the US dollar, barely changed from its close of 83.4725 in the previous session, Reuters reported. Traders reckon the rupee is unlikely to have much of a reaction to the RBI’s policy decision and instead will be driven by how flows related to local equities pan out.

RBI MPC Meeting Live: The Indian stock market benchmark indices, Sensex and Nifty 50, opened flat on Friday, ahead of the announcement of RBI monetary policy today. Analysts expect the RBI policy would be a ‘non-event’ for markets as the central bank is likely to keep repo rate unchanged.

RBI MPC Meeting Live: Analysts believe it is highly unlikely that the RBI will precede the US Federal Reserve in cutting policy rates as the interest rate differential between the US and India is at historic lows. YES Bank believes the RBI will cut rates only after the Fed rate cut cycle starts. Fed is expected to cut rates in September.

RBI MPC Meeting Live: RBI last hiked the repo rate to 6.5% in February 2023. As per experts, the central bank may keep the benchmark policy rates at the current level until October.

India’s economic activity continues to remain resilient and its outlook for the current financial year remains strong. India’s gross domestic product (GDP) for the January-March quarter of fiscal 2023-24 (Q4FY24) was at 7.8%, driven by strong growth in the manufacturing sector. The Indian economy grew by 8.2% for the full year (FY24). 

According to data released by the National Statistical Office (NSO), the real gross value added (GVA) grew at a rate of 7.2% in FY24, compared to the 6.7% growth observed in FY23.

RBI MPC Meeting Live: India’s Consumer Price Index (CPI)-based inflation, also known as retail inflation, eased to an 11-month low level of 4.83% in April from 4.85% in March, helped by falling crude oil prices. Analysts believe India’s macroeconomic outlook remains solid, but RBI can confidently keep rates at elevated levels for longer, as long as inflation remains above its 4% target.

RBI MPC Meeting Live: The RBI is expected to maintain its current stance. Although the CPI inflation declined to 4.83% from the previous month’s 4.85%, food inflation remains stubbornly high at 8.7%. As a result, RBI is likely to maintain the status quo until inflation is brought within the target range of 4% +/- 2%. Other challenges include extreme weather conditions, stock market volatility, and geopolitical tensions, said Vinod Nair, Head of Research, Geojit Financial Services.

He believes RBI policy is likely to be a non-event for the markets. The market will focus on the inflation and GDP forecast of FY25, a reduction in inflation and increase in GDP trajectory will be taken positive. However the chance is low in this policy rather than in the next policy as the new coalition structure, monsoon and FDA policy is reviewed.

RBI MPC Meeting Live: RBI policy announcement comes a day after the European Central Bank (ECB) delivered its first interest rate cut since 2019 on Thursday, citing progress in tackling inflation even as it acknowledged the fight was far from over. ECB officials led by President Christine Lagarde cut the key deposit rate by 25 basis points (bps) to 3.75% from a record-high of 4.0%.

RBI MPC Meeting Live: The RBI Governor Shaktikanta Das headed six-member Monetary Policy Committee (MPC) began its three-day meeting on June 5 and the decision is due on Friday, June 7. This will be the first RBI policy after the Lok Sabha election results 2024. Hence, RBI Governor’s commentary on inflation and future interest rate cut trajectory will be keenly watched.

RBI MPC Meeting Live: A majority of analysts and economists predict that the RBI’s rate setting panel, the six-member Monetary Policy Committee (MPC) headed by the RBI Governor Shaktikanta Das,  would keep its key repo rate unchanged at 6.50% for the eight consecutive time and continue with its stance of ‘withdrawal of accommodation’.

RBI MPC Meeting Live: The Reserve Bank of India (RBI) Governor Shaktikanta Das is set to announce the second bi-monthly monetary policy of the financial year 2024-25 on Friday. The RBI Governor headed six-member Monetary Policy Committee (MPC) began its three-day meeting on June 5 and the decision is due on Friday, June 7.