RBI Monetary Policy 2024:-RBI keeps repo rate unfluctuating at 6.5%; GDP growth estimate for FY 2025 Abundance to 7.2%

RBI Monetary Policy 2024 Updates: On Friday, Governor Shaktikanta Das of the Reserve Bank of India (RBI) announced the second bi-monthly monetary policy for the fiscal year 2024–25. Following the outcomes of the 2024 Lok Sabha election, this is the first RBI policy. By a vote of 4 to 2, the six-member Monetary Policy Committee (MPC), led by the RBI Governor, decided to maintain the benchmark repo rate at 6.5% for the eighth straight non-fluctuating period.

It also made the decision to stick to its “withdrawal of accommodation” policy. The RBI increased its GDP growth prediction for FY25 from 7% to 7.2%. The 4.5% inflation target for FY25 was maintained by the central bank. For all the most recent information, keep checking the RBI MPC Meeting Live blog.

RBI Monetary Policy 2024 Live Update:-It’s possible that an out-of-cycle repo rate dearth will occur. The Piramal Group’s Debopam Chaudhuri

The fact that the FY25 GDP prognosticate was revised upward to 7.2% further supports the idea that India’s political climate would continue to favor debate economic growth. It is also noteworthy that Dr. Ashima Goyal has now voted in favor of a fee reduction, in addition to Dr. Jayant Verma. I hope that the number of MPC members will continue to rise, as this could result in a rate reduction in August 2024. According to Debopam Chaudhuri, Chief Economist at Piramal Group, an out-of-cycle move might not be completely ruled out now that the European Central Bank (ECB), the Bank of England (BoE), and Sweden have already made cuts, and the US Federal Reserve and Canada will soon follow suit.

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RBI Monetary Policy 2024: We adjust our game strategy based on the local weather and pitch circumstances. Governor of RBI

There is a view that in matters of monetary policy, the Reserve Bank is guided by the principle of ‘follow the Fed’. 36 I would like to absolute state that while we do keep a watch on whether clouds are building up or clearing out in the distant horizon, we play the game according to the local weather and pitch conditions. In other words, while we do consider the impact of monetary policy in advanced economies on Indian markets, our actions are primarily determined by domestic growth-inflation conditions and the outlook, RBI Governor Shaktikanta Das said in his monetary policy speech.

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RBI Monetary Policy 2024:-Rate cut hopes escalate to FY25: Dhawal Dalal of Edelweiss Asset Management

The increase in the price of industrial commodities and food globally alarmed the RBI due to the sticky food crisis. This year’s normal monsoon is essential to reducing food inflation. The RBI also made it clear that they would not simply follow the Fed’s lead in cutting interest rates; instead, they would place greater emphasis on the dynamics of local economy and inflation. Overall, we think this is a cautious monetary strategy, with possible rate decreases being pushed in the third quarter of FY25, according to Dhawal Dalal, Edelweiss Asset Management’s chief investment officer for fixed income.

RBI Monetary Policy 2024:-Bank Marketing’s Adil Brands says time is right for deposits to lock in high returns

Live stream of the RBI MPC meeting: Loan interest rates may remain high for borrowers. Because lending rates are directly influenced by the repo rate, if the rate stays the same, current loans will continue to be benchmarked to a higher repo rate of 6.50%, and new loans may be made available with lower spreads than existing ones. Any rate reduction in the future would result in lower rates, which would reduce the amount that loan borrowers must pay in EMIs. But this won’t affect the fixed-interest loan, according to Bankbazaar.com CEO Adhil Shetty.

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RBI  Monetary Policy 2024:-Two MPC members vote for repo rate cut

In real time, the Monetary Policy Committee of the Reserve Bank of India saw two of its members vote to reduce the repo rate by 25 basis points and shift to a “neutral” posture.

The policy repo rate of 6.50% and the policy stance of “withdrawal of accommodation” were maintained by Drs. Shashanka Bhide, Rajiv Ranjan, Michael Debabrata Patra, and Shri Shaktikanta Das.

Voting in favor of a 25 basis point reduction in the policy repo rate and a shift to neutrality were Dr. Ashima Goyal and Prof. Jayanth R. Varma.