RBI MPC Meeting Highlights: RBI Keeps Repo Rate Steady At 6.5%; GDP, Inflation Forecast Revised – News18

RBI Policy Live Updates: Key decisions by RBI

• Policy Repo Rate: Unchanged at 6.50% under the liquidity adjustment facility (LAF).
• Standing Deposit Facility (SDF): Remains at 6.25%.
• Marginal Standing Facility (MSF) Rate & Bank Rate: Both remain steady at 6.75%.
• Monetary Policy Stance: The MPC has decided to maintain a neutral stance, aiming to balance inflation control and growth promotion.
• Real GDP Growth: Projected at 6.6% for FY24-25, with Q3 at 6.8%, Q4 at 7.2%, and H1 FY25-26 at 6.9% (Q1) and 7.3% (Q2).
• CPI Inflation: Projected at 4.8% for FY24-25, with Q3 at 5.7%, Q4 at 4.5%, and for H1 FY25-26 at 4.6% (Q1) and 4.0% (Q2).
• Cash Reserve Ratio (CRR): Reduced by 50 basis points, bringing it down to 4%.

RBI MPC Meeting LIVE Updates: Boman Irani, President, CREDAI On RBI MPC Decision

Boman Irani, President, CREDAI, said: “Acknowledging the challenges posed by persistent inflationary pressures, the Reserve Bank of India’s decision to maintain the repo rate at 6.5% reflects an understandable approach towards striking a balance between economic and price stability. However, going ahead into the new year, we hope to see the RBI and the government continue to leverage the robust growth and potential offered by real estate and agriculture sectors in particular, via a combination of policy interventions and reduced rates to form a conducive eco-system for sustained and sustainable economic growth.”

RBI MPC Meeting LIVE Updates: Pralay Mondal, MD & CEO, CSB Bank On RBI MPC Decision

Pralay Mondal, MD & CEO, CSB Bank, said: “The move to lower CRR is a welcome step as it releases funds for banks to lend. RBI’s stance on inflation and therefore on the Repo rate will have long-term implications of lowering inflation and stabilising currency. SORR is a much-needed benchmark as it incorporates both regulatory rates and market sentiments. Overall a very prudent approach that focuses on the long-term interests of the country while calibrating the short-term mismatch.”

RBI MPC Meeting LIVE Updates: Ajay Kumar Srivastava, MD & CEO Indian Overseas Bank On RBI Decision

Ajay Kumar Srivastava, Managing Director and CEO, Indian Overseas Bank, said: “The RBI’s decision to keep the repo rate unchanged at 6.50% and the GDP growth projection at 6.6% in FY25 reflects a practical and balanced approach to navigate the inflationary pressures while supporting economic growth. Its decision to reduce CRR to 4% will act as catalyst in release of INR 1.16 lakh crore into the economy, improving liquidity and enabling banks to enhance lending to various sectors. Another positive move has been the decision to raise rates on FCNR (B) deposits from 1-3 years to 400 BPS which is expected to attract more capital inflows and benefit the banking sector. We welcome the introduction of Mulehunter.AI, which will enable the banking sector to address the issue of mule accounts efficiently, ensuring greater security and trust in the digital ecosystem.”

RBI MPC Meeting LIVE Updates: Umesh Revankar, Executive Vice Chairman, Shriram Finance On RBI Decision

“The RBI has sounded a cautious optimistic note in its latest monetary policy committee meeting – while it kept the repo rate at status quo, it acknowledged the evolving economic landscape, which is characterized not only by growth but also inflationary pressures. The decision marks a policy that’s trying to balance a fine equilibrium between a commitment to the support of economic recovery and the prevention of price instability.

The Indian economy has so far been resilient, but the persistence of inflationary pressures largely due to food prices remain a cause for concern. The RBI’s decision to continue to closely monitor inflation dynamics reflects the continued importance attributed to price stability.

The central bank has focused on financial stability and taken proactive steps to address emerging risks. The focus on strengthening the banking sector, promoting digital innovation, and fostering a robust financial ecosystem reflects the RBI’s forward-looking approach.

In a word, this monetary policy decision showcase that it is prepared to respond to changing economic conditions. Through a flexible and data-driven approach, the RBI would attempt to balance the need to stimulate growth with that of safeguarding price stability.”

RBI MPC Meeting LIVE Updates: Pankaj Sharma, CEO, Religare Finvest on RBI decision

Pankaj Sharma, CEO, Religare Finvest, said: “The Reserve Bank of India’s (RBI) stance of maintaining the repo rate at 6.50% demonstrates a nuanced approach to our current economic challenges. While we would have welcomed a rate cut, we understand the delicate balancing act of managing inflation against economic growth-we recognize the RBI’s cautious approach.”

“The current economic indicators present a complex landscape. With inflation rates climbing to 6.2% – significantly above the RBI’s 4% target – and our GDP growth decelerating to 5.4% in the second quarter, we’re navigating turbulent economic waters. The modest Cash Reserve Ratio (CRR) reduction from 4.5% to 4% is a strategic move that will inject approximately Rs 1.16 lakh crore into our financial ecosystem. From our perspective as a financial services provider, this liquidity injection is crucial. It will enhance banks’ lending capacities, creating more opportunities for businesses seeking capital,” Sharma said.

We remain optimistic as a sector. The RBI’s measured response suggests a commitment to long-term economic stability. The potential for sustained growth remains robust, and we continue to support and look forward to policies that balance inflation control with economic expansion. Thereby insulating and propelling India to its vision of becoming the third largest economy, he added.

RBI MPC LIVE Updates: Achala Jethmalani, Economist at RBL Bank, described the RBI’s recent decisions as a “policy of hard choices well delivered.”

Achala Jethmalani, Economist at RBL Bank, described the RBI’s recent decisions as a “policy of hard choices well delivered.” Despite the recent data, Jethmalani believes the RBI-MPC has made the right call given the growth-inflation outlook. The RBI maintained the policy rates, holding the repo rate at 6.50%, as expected by the markets, while providing durable liquidity support.

Two of the six MPC members voted for a repo rate cut this time. If inflation moderates, Jethmalani anticipates the first rate cut to occur in February 2025. Meanwhile, the RBI lowered the Cash Reserve Ratio (CRR) by 0.50%, which is expected to inject INR 1.16 lakh crore into the banking system over the next two fortnights, benefiting banks and keeping money market rates benign. With the CRR now at 4.00%, the level is back to pre-Covid levels.

The surplus liquidity in the system is expected to facilitate faster monetary transmission when the conditions for a rate cut arise. Jethmalani advises that it is an opportune time for deposits to be locked in, with expectations of softer borrowing rates in the first half of next year.

RBI MPC Meeting LIVE Updates: Tata Capital’s MD and CEO, Rajiv Sabharwal On RBI MPC Decision

Tata Capital’s MD and CEO, Rajiv Sabharwal, said: “The RBI’s decision to maintain the repo rate at 6.5% and reduce CRR by 50 bps reflects a balanced approach that encourages growth while ensuring price stability, particularly as inflation continues to moderate. The balanced approach provides a stable monetary environment, crucial for sustaining recovery amid global uncertainties. A nuanced view of demand dynamics also reveals an upward trend in rural demand, while urban consumption has seen some moderation.”

RBI MPC Meeting LIVE Updates: RBI raises FY25 inflation estimate to 4.8%; Should you brace for price rise?

On Friday, the Reserve Bank of India raised its inflation projection for the current fiscal year to 4.8% from 4.5%. Governor Shaktikanta Das attributed the revision to persistent food price pressures, which are expected to keep headline inflation high in the December quarter.

Consumer price index (CPI)-based inflation saw a sharp rise in September and October 2024, primarily driven by an unexpected surge in food prices. While core inflation remains subdued, it showed a slight increase in October. The fuel group, however, continued to experience deflation for the 14th consecutive month.

“Despite some easing, food price pressures are likely to keep headline inflation elevated in the third quarter,” Governor Das stated while presenting the December 2024 monetary policy.

RBI MPC Meeting LIVE Updates: RBI Stays Steady On Rates

Anshul Jain, Chief Executive India & SE Asia & APAC Tenant Representation, Cushman & Wakefield, said: “While a neutral stance signals flexibility and remains focused on stabilizing the macroeconomic environment, a rate cut would have provided the necessary boost to the GDP while also improving homebuyer’s sentiment in the mid-and-affordable housing segment. However, we do anticipate that the RBI will provide the much-needed stimulus soon in the February 2025 MPC meet, to bolster the overall consumer spending. For the housing sector, in particular, lower lending rates would catalyse a sustained momentum.”

RBI MPC Meeting LIVE Updates: Impact on Real estate

Sanchit Bhutani, MD, Group 108 said, “The RBI’s move to maintain the repo rates reflects a thoughtful approach to balancing inflation control with economic growth, a key factor for the real estate sector. Keeping the SDF and MSF rates unchanged reinforces market stability, while the FY25 inflation forecast of 4.5% signals the central bank’s positive outlook. However, the surge in metal prices could pose inflationary challenges. This stable monetary environment is expected to boost growth in commercial and retail real estate. We are confident that this consistency will sustain demand in overall sectoral growth.”

RBI MPC Meeting LIVE Updates: ‘Likely to boost confidence among both buyers and developers’

Prateek Tiwari, Managing Director of Prateek Group, commented, “In light of inflation concerns, the RBI has kept the repo rate unchanged at 6.5% for the 11th consecutive time. This decision provides stability amid the growing demand for housing. Additionally, the reduced volatility in loan rates is likely to boost confidence among both buyers and developers, fostering long-term growth. We are optimistic that this continued support will drive the ongoing demand in the real estate market and potentially lead to smaller rate cuts in the future.”

RBI MPC Meeting LIVE Updates: Rate Cut Expected In FY25

Anil Rego- Founder and Fund Manager at Right Horizons PMS, said, “We anticipate rate cuts at the end of FY25 or the beginning of FY26 since inflation has intensified. Typically, NBFCs are better positioned to benefit from cuts in rates as credit growth will improve followed by banks. Also, credit-sensitive sectors like auto and real estate will see higher demand.”

RBI MPC Meeting LIVE Updates: CRR Reduction Is A Targeted Response

Ashwani Dhanawat, Executive Director and Chief Investment Officer, Shriram General Insurance Company, said, “The reduction in the CRR is a targeted response to address ongoing liquidity tightness, providing banks with additional funds to support credit growth and economic activity. With inflation projections for FY25 revised to 4.8%, the committee’s neutral stance reflects a cautious approach in balancing persistent inflationary pressures with the need to foster sustainable growth.”

RBI MPC Meeting LIVE Updates: RBI cuts Cash Reserve Ratio by 50 bps, a first after March 2020

Santosh Meena, Head of Research at Swastika Investmart Ltd., stated, “The RBI has kept the repo rate unchanged, reaffirming its focus on tackling inflation. However, the surprise came with a 50 basis point reduction in the Cash Reserve Ratio (CRR), surpassing market expectations of a 25-basis-point cut. This move is aimed at boosting liquidity in the system, particularly in light of the weak GDP data released for the last quarter. Despite maintaining a neutral stance, the market reacted positively to the unexpected CRR cut, leading to a surge in the Bank Nifty. In the short term, the market’s structure looks bullish, with the Bank Nifty set to hit new highs soon. For the Nifty, the 24,800–25,000 range remains a key congestion zone. However, sustained buying on dips is likely, as FIIs (Foreign Institutional Investors) have turned net positive on Indian equities, further enhancing market sentiment.”

RBI MPC Meeting LIVE Updates: Stable interest rates offer much-needed predictability for homebuyers

Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, commented, “The RBI’s decision to maintain the repo rate reflects its approach to balancing economic growth with inflation concerns. Stable interest rates offer much-needed predictability for homebuyers and developers, helping to build market confidence. With consistent borrowing costs, we expect sustained demand for housing, especially in the affordable and mid-segment categories. Notably, the RBI’s 50 basis point reduction in the Cash Reserve Ratio (CRR), bringing it down to 4%, will inject Rs 1.16 lakh crore of liquidity into the banking system, enhancing banks’ lending capacity and promoting economic growth.”

RBI MPC Meeting LIVE Updates: Impact on the real estate market

Prashant Khandelwal, CEO of Agami Realty, said: “The RBI’s decision to maintain the repo rate at 6.5% is a welcome move for the housing sector, offering much-needed stability that will likely spur demand. This stability will facilitate the real estate market, creating an environment conducive to making housing more affordable and boosting consumer confidence. With an estimated GDP growth of 7% for FY25 and inflation predicted to be around 4.5%, India’s economy will remain relatively insulated from global trends, making the entire probability of investment in the long run favorable. Ultimately, keeping the repo rate unchanged helps ease pressure on the sector, stimulates growth, and increases activity in the industry by providing predictable borrowing costs.”

RBI Policy Meeting Live Updates: In the next few months we expect tight liquidity, says Shaktikanta Das

RBI Governor Shaktikanta Das stated, “We expect tight liquidity in the coming months, along with tax-related outflows. There is also a possibility of an increase in currency circulation.

RBI MPC Meeting LIVE Updates: Underlying slowdown in growth due to inflation

Underlying slowdown in growth due to inflation; continuing monsoons affected Q2: RBI Governor

RBI Monetary Policy Live Updates: Shaktikanta Das remarks on his tenure extension

Shaktikanta Das, when asked about his tenure extension on Friday, said, “I’m not giving any headline.”

RBI Monetary Policy Live Updates: On Inflation

Inflation horse made a very valiant effort to bolt, our effort is to keep it in a tight leash, says Das

RBI Monetary Policy Live Updates: Credibility of inflation target has to be reserved, says Das

RBI MPC Meeting LIVE Updates: RBI will use various policy instruments to restore growth-inflation balance: Das

RBI Monetary Policy Live Updates: The inflation has to be brought down in the interest of sustainable growth, says Shaktikanta Das in post MPC presser

RBI MPC Meeting LIVE Updates: Shaktikanta Das Addresses Press

RBI MPC Meeting LIVE Updates: CRR Cut Will Free Up More Funds For Banks To Lend

Sahil Agarwal, CBO, Nimbus Projects Limited, said: “In a welcome development for borrowers, the RBI’s latest monetary policy brings good news. While the central bank kept the repo rate unchanged, it decided to reduce the Cash Reserve Ratio (CRR) that banks must maintain. This move will free up more funds for banks to lend. With more liquidity available, we anticipate that banks may pass on some of the benefits to borrowers through lower interest rates. A reduction in interest rates will particularly benefit high-ticket borrowers, such as those taking home loans, by reducing EMIs. We believe this shift could prompt home buyers who have been waiting on the sidelines to finally make their purchase decisions.”

RBI MPC Meeting LIVE Updates: CRR cut only serves as a “band-aid” to ease money markets

Debopam Chaudhuri, Chief Economist at Piramal Enterprises, commented that it is encouraging to see the Reserve Bank of India (RBI) asserting its independence, especially amidst pressures from fiscal policymakers for a rate cut. However, he noted that the timing may not be ideal. He argued that an early rate cut would significantly help revive Indian economic activity, stimulate job creation, and encourage private capital expenditure in FY26, considering the time lag between rate cuts and their real economy impact.

Chaudhuri also pointed out that the recent CRR cut only provides temporary relief, acting as a “band-aid” to ease liquidity tightness in money markets, which is expected to persist from December 2024 to March 2025. The move is expected to release Rs 90,000 crore in December and Rs 1.16 lakh crore by March 2025. However, the effect is likely to fade beyond that, as banks may use this additional liquidity to settle some of their non-deposit liabilities. He highlighted that the liabilities of banks to the rest of the banking system have significantly increased, doubling from Rs 2.5 lakh crore in 2019 to Rs 5 lakh crore by October 2024.

RBI MPC Meeting LIVE Updates: Prudence, Practicality and Timing suggests a wait and watch for policy rate

Anitha Rangan, Economist at Equirus, commented that, as expected, the Reserve Bank of India (RBI) kept its policy rate at 6.5% while announcing a 50 basis point (bp) reduction in the Cash Reserve Ratio (CRR), to be implemented in two 25 bp tranches over the next two fortnights. This move provides sufficient liquidity and eases short-term borrowing, while keeping long-term rates stable. However, the RBI has revised its GDP growth forecast for FY25 down to 6.6% from 7.2%, reflecting the recent slowdown. The inflation outlook has also been adjusted upwards, now projected at 4.8% for FY25, with inflation expected to reach 4% in Q2 of FY26.

Rangan explained that the revised inflation and growth outlook, along with the RBI’s cautious stance of “prudence, patience, practicality,” suggests that the central bank will not take further action on policy rates in the near term. External factors remain a priority, and the RBI is unlikely to make any significant rate cuts until there is more clarity on the global economic environment. The recent increase in the interest rate ceiling on FCNR(B) deposits by 200 basis points indicates the RBI’s concern over vulnerabilities in the external sector, particularly related to the USD/INR exchange rate. She noted that the CRR hike of 50 bp in April 2022 has now been reversed, but the policy rate hikes since May 2022 will take longer to reverse. Rangan does not expect more than a 50 bp reduction in rates for 2025, emphasizing the need for patience and caution, especially regarding external sector developments.

RBI MPC Meeting LIVE Updates: What does a change in the CRR mean?

The RBI adjusts the Cash Reserve Ratio (CRR) to manage both inflation and liquidity within the economy. When inflation is elevated, the RBI increases the CRR to reduce the amount of money banks can lend, thereby helping to curb inflation. Conversely, during periods of economic slowdown, the RBI lowers the CRR to increase the funds available for lending, which can stimulate growth and investment.

By cutting the CRR now, the RBI aims to boost economic activity, especially in light of slower-than-expected growth. This move is designed to increase liquidity in the banking system, supporting credit expansion and helping to revive economic momentum.

RBI MPC Meeting LIVE Updates: Key Decisions By MPC

• The policy repo rate remains unchanged at 6.50% under the liquidity adjustment facility (LAF). The standing deposit facility (SDF) rate stays at 6.25%, while the marginal standing facility (MSF) rate and Bank Rate remain steady at 6.75%.
• The MPC has decided to maintain a neutral monetary policy stance, aiming to balance inflation control with promoting growth.
• Real GDP growth for 2024-25 is projected at 6.6%, with Q3 at 6.8%, Q4 at 7.2%, and H1 2025-26 at 6.9% (Q1) and 7.3% (Q2).
• CPI inflation for 2024-25 is expected to be 4.8%, with Q3 at 5.7%, Q4 at 4.5%, and H1 2025-26 at 4.6% (Q1) and 4.0% (Q2).
• Additionally, the MPC announced a 50 basis points reduction in the Cash Reserve Ratio (CRR), lowering it to 4%.

RBI MPC Meeting LIVE Updates: Dhawal Dalal, President & CIO-Fixed Income, Edelweiss MF on today’s credit policy

RBI MPC Meeting LIVE Updates: CRR to enhance liquidity in the banking system

Raghvendra Nath, MD of Ladderup Wealth Management, commented, “The Reserve Bank of India (RBI) has kept the repo rate unchanged at 6.5% for the 11th consecutive time. Given the recent uptick in inflation and the sluggish GDP growth in Q2, the RBI Governor emphasized the need for a flexible approach to managing inflation while balancing growth. Additionally, the RBI has revised its GDP growth forecast for FY24 down from 7.2% to 6.6%. Looking ahead, we expect that supporting growth will become a key priority, provided inflation doesn’t experience significant negative shocks. A 50 basis point cut in the Cash Reserve Ratio (CRR) is expected to inject liquidity into the banking system and support credit growth. Based on these factors, we anticipate that the RBI will begin a rate cut cycle starting in February 2025.”

RBI Monetary Policy Live: Bank Nifty recovers after RBI’s CRR cut

The Bank Nifty index rebounded strongly on Friday, December 6, following the Reserve Bank of India’s (RBI) announcement of a 50 basis point reduction in the Cash Reserve Ratio (CRR). Initially dipping after the RBI decided to keep the repo rate steady at 6.5%, the index surged over 600 points from its intraday low, reaching 53,850 by 10:30 AM.

The CRR cut, which reduces the reserve requirement to 4%, is expected to inject Rs 1-1.25 lakh crore into the banking system, enhancing liquidity and supporting credit growth. Among banking stocks, Axis Bank led the rally with a 1.5% increase, while SBI and ICICI Bank rose by 0.9% and 0.8%, respectively. HDFC Bank and Kotak Mahindra Bank remained largely unchanged.

RBI MPC LIVE Updates: Mule-hunter.AI introduced by RBI to identify mule accounts, Says Das

RBI Policy Live Updates: RBI to set up committee of experts to suggest framework for responsible, ethical use of AI

RBI Governor Shaktikanta Das announced that the Reserve Bank of India (RBI) will establish a committee of experts to recommend a framework for the responsible and ethical use of artificial intelligence (AI) in the financial sector. This initiative aims to ensure that AI technologies are used in a manner that is both safe and aligned with ethical standards.

RBI MPC Meeting LIVE Updates: RBI Allows Small Finance Banks To Extend Credit Line On UPI To Customers

In a move aimed at enhancing financial inclusion, the Reserve Bank of India (RBI) has allowed Small Finance Banks (SFBs) to provide credit lines to their customers. This decision is expected to boost access to affordable credit for underserved sections, including small businesses, micro-entrepreneurs, and individuals in rural and semi-urban areas. Read More

RBI Policy Meeting Live Updates: Shaktikanta Das on weaknesses in the manufacturing sector

RBI Governor stated that the weaknesses in the manufacturing sector were not widespread, indicating that the challenges were limited to specific areas rather than affecting the entire industry.

RBI Policy Meeting Live Updates: New benchmark – SORR

The RBI has proposed the introduction of a new benchmark called the Secured Overnight Rupee Rate (SORR). This rate will serve as a reference for overnight money market transactions, aimed at improving the transparency and efficiency of the Indian financial system.

RBI MPC Meeting LIVE Updates: What announcement on FCNRB means

Foreign Portfolio Investment (FPI) inflows into Emerging Market Economies (EMEs) saw a general decline in October. However, India has managed to attract net FPI inflows of $9.3 billion in FY25 to date. To further boost capital inflows, the Reserve Bank of India (RBI) has raised interest rate ceilings on FCNR-B deposits and increased FCNR deposit rates, aiming to make India a more attractive destination for foreign investments.

RBI MPC Meeting LIVE Updates: Colletaral-free loan limit for farmers raised to Rs 2 lakh

The RBI has announced an increase in the collateral limit for agricultural loans, raising it from Rs 1.6 lakh crore to Rs 2 lakh crore per borrower. This move is designed to offer enhanced financial support and stability to farmers, while also enabling greater credit availability in the agricultural sector.