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RBI Policy Highlights Rate Announcements: • RBI decided to keep repo rate unchanged at 6.50% by a majority of 5 out of 6 members • MPC decided to remain focused on withdrawal of accommodation by a majority of 5 out of 6 members Growth: • RBI projected the GDP growth for FY25 at 7% • Quarterly break-up is projected at 7.1% in Q1, 6.9% in Q2 and 7% in Q3 and Q4 Inflation: • Assuming a normal monsoon, the RBI has projected that CPI inflation for FY25 will be at 4.5%. • On a quarterly basis, CPI inflation is expected to be 4.9% in Q1, 3.8% in Q2, 4.6% in Q3, and 4.5% in Q4 Liquidity: • Liquidity conditions improved during February and March, in the wake of increased government spending • WACR hovered near the repo rate since last policy meeting • RBI will conduct more VRRR auctions in April due to the surplus liquidity in the system • Monetary transmission continues to be work in progress • Rupee was the most stable among major currencies in FY24 Current Account Deficit: • India’s current account deficit narrowed significantly on account of a moderation in merchandise trade deficit, coupled with robust growth in services exports and strong remittances • ECBs and NRI deposits recorded higher net inflows vis-a-vis previous year • Forex reserves reached an all time high of $645.6 billion as of March 29, 2024 • India continues to be the receiver of the largest remittances in the world and the cost of receiving remittances is also coming down Other announcements: • Introduction of a mobile app to access RBI’s retail direct scheme for participation in G-Sec market. • Scheme for trading of sovereign green bonds at IFSC to be announced • Undertaking a comprehensive review of LCR framework for banks; draft circular to be issued shortly • Dealing in rupee interest rate derivative products for all small finance banks • Propose to facilitate deposit of cash in Cash Deposit Machines using UPI • UPI access for pre-paid instruments for third party apps – propose to permit using of TPAPs for making UPI payments from PPI wallets • Distribution of CBDC through non-bank payment system operators Credit : A K Research Desk. #rbipolicy #rbi #inflation #fixedincome #growth #indianeconomy #infrastructure #economicoutlook

RBI Monetary Policy 2024 Highlights: Key Decisions and Market Impact 👇 Repo Rate Unchanged at 6.5% RBI Governor Shaktikanta Das announced that the Monetary Policy Committee (MPC) decided to keep the benchmark repo rate unchanged at 6.5% for the 11th consecutive meeting. The monetary policy stance remains ‘Neutral.’ CRR Cut by 50 bps to 4% The Cash Reserve Ratio (CRR) has been reduced by 50 basis points to 4%. This move is expected to inject additional liquidity into the banking system and boost credit flow. New Benchmark: Secured Overnight Rupee Rate (SORR) To enhance the credibility of interest rate benchmarks and develop the derivatives market, the RBI will introduce the Secured Overnight Rupee Rate (SORR). This benchmark will be based on secured money market transactions, including overnight repo and TREPS. SFBs to Offer Credit Lines via UPI Small Finance Banks (SFBs) have been permitted to extend pre-sanctioned credit lines through UPI. This initiative aims to deepen financial inclusion, especially benefiting ‘new-to-credit’ customers. Inflation Projections Raised for FY25 The RBI revised its FY25 CPI inflation target upward to 4.8% (from 4.5%). Q3 FY25: Increased to 5.7% (from 4.8%). Q4 FY25: Increased to 4.5% (from 4.2%). Q1 FY26: Increased to 4.6% (from 4.3%). Q2 FY26: Estimated at 4%. GDP Growth Estimate Lowered The FY25 GDP growth projection has been cut to 6.6% (from 7.2%). Q3 FY25: Revised to 6.8% (from 7.4%). Q4 FY25: Revised to 7.2% (from 7.4%). Q1 FY26: Revised to 6.9% (from 7.3%). Q2 FY26: Estimated at 7.3%. Impact on Markets Indian equity markets (Sensex and Nifty 50) turned positive after the CRR cut announcement, signaling optimism among investors. Stay tuned for further updates as the RBI’s policy measures unfold and their implications become clearer for the financial markets and the broader economy.

RBI's Repo rate unchanged for 7th time? Repo Rate:- >> The interest rate at which the Reserve Bank lends money to banks against the collateral of government and other approved securities under Liquidity Adjustment Facility (LAF). >> It is also the benchmark policy rate. Monetary Policy Committee:- >> The monetary policy committee is a statutory and institutionalized framework under the Reserve Bank of India Act, 1934, for maintaining price stability, while keeping in mind the objective of growth. >> MPC consists of 6 members. Out of 6, 3 members are from RBI and 3 are appointed by the government. >> Governor of RBI is ex-officio Chairman of the committee. >> The MPC determines the policy interest rate (repo rate) required to achieve the inflation target. >> An RBI-appointed committee led by the then deputy governor Urjit Patel in 2014 recommended the establishment of the monetary policy committee. RBI MPC Meeting 2024 Highlights:- The RBI decided to keep the key policy repo rate unchanged at 6.5% in its April.

*RBI Policy Highlights* *Rate Announcements:* • RBI decided to keep repo rate unchanged at 6.50% by a majority of 4 out of 6 members • MPC decided to remain focused on withdrawal of accommodation by a majority of 4 out of 6 members *Growth:* • RBI projected the GDP growth for FY25 at 7.2% • Quarterly break-up is projected at 7.3% in Q1, 7.2% in Q2 and 7.3% in Q3 and 7.2% in Q4 *Inflation:* • RBI has retained CPI inflation projection for FY25 will be at 4.5%. • On a quarterly basis, CPI inflation is expected to be 4.9% in Q1, 3.8% in Q2, 4.6% in Q3, and 4.5% in Q4 *Liquidity:* •The weighted average call rate (WACR), on an average, remained close to the middle of the corridor at 6.50%. Across the term money market segment, the yields on certificates of deposit (CDs), commercial papers (CPs) issued by non-banking financial companies (NBFCs) and 3-month treasury bills (T-bills) also eased. *Current Account Deficit:* • Forex at a historical high of USD 651.5 billion as of May 31 • Foreign Portfolio Investor (FPI) flows during FY24, with an impressive inflow totaling USD 41.6 billion. *Other announcements:* • Bulk deposit limit raised to Rs 3 crore in single deposits for SCBs and 1 crore for RRBs • RBI to set up digital payments intelligence platform to curb digital frauds • Rationalisation of guidelines for export and import of goods and services under FEMA • Next edition of Harbinger 2024 - the global hackathon - with two themes, zero frauds and being divyang friendly will be launched soon • To introduce auto replenishment of UPI-Lite wallet Source: A K Debt Research Desk #growth #india #RBI #inflation #Gsec #dividend #GDP #Urban #CAD #Gold #US #Yield #Economy

RBI Policy Highlights Rate Announcements: • RBI decided to keep repo rate unchanged at 6.50% by a majority of 5 out of 6 members • MPC decided to remain focused on withdrawal of accommodation by a majority of 5 out of 6 members Growth: • RBI projected the GDP growth for FY25 at 7% • Quarterly break-up is projected at 7.1% in Q1, 6.9% in Q2 and 7% in Q3 and Q4 Inflation: • Assuming a normal monsoon, the RBI has projected that CPI inflation for FY25 will be at 4.5%. • On a quarterly basis, CPI inflation is expected to be 4.9% in Q1, 3.8% in Q2, 4.6% in Q3, and 4.5% in Q4 Liquidity: • Liquidity conditions improved during February and March, in the wake of increased government spending • WACR hovered near the repo rate since last policy meeting • RBI will conduct more VRRR auctions in April due to the surplus liquidity in the system • Monetary transmission continues to be work in progress • Rupee was the most stable among major currencies in FY24 Current Account Deficit: • India’s current account deficit narrowed significantly on account of a moderation in merchandise trade deficit, coupled with robust growth in services exports and strong remittances • ECBs and NRI deposits recorded higher net inflows vis-a-vis previous year • Forex reserves reached an all time high of $645.6 billion as of March 29, 2024 • India continues to be the receiver of the largest remittances in the world and the cost of receiving remittances is also coming down Other announcements: • Introduction of a mobile app to access RBI’s retail direct scheme for participation in G-Sec market. • Scheme for trading of sovereign green bonds at IFSC to be announced • Undertaking a comprehensive review of LCR framework for banks; draft circular to be issued shortly • Dealing in rupee interest rate derivative products for all small finance banks • Propose to facilitate deposit of cash in Cash Deposit Machines using UPI • UPI access for pre-paid instruments for third party apps – propose to permit using of TPAPs for making UPI payments from PPI wallets • Distribution of CBDC through non-bank payment system operators

📢 RBI Maintains Repo Rate at 6.5%: Key Policy Updates 💡 In a significant update, RBI Governor Shaktikanta Das has announced that the repo rate will remain at 6.5%, marking the eighth consecutive review without a change since February 2023. This period of stability is now the second-longest in the past 25 years. Here’s a summary of the key announcements: 🔹 Policy Rates: Repo Rate: Held steady at 6.5% Standing Deposit Facility (SDF): Remains at 6.25% Marginal Standing Facility (MSF) & Bank Rate: Both at 6.75% 🔹 Monetary Policy Stance: The MPC will continue with the 'Withdrawal of Accommodation' stance. Focus remains on inflation control and price stability to support growth. 🔹 Economic Forecasts: Real GDP for FY25: Kept at 7.2%, with slight adjustments in quarterly projections. Real GDP for Q1FY26: Projected at 7.2%. Inflation Forecast for FY25: Unchanged at 4.5%, with a slight adjustment for FY26 to 4.4%. 🔶 Additional Updates: Forex Reserves: New high of $675 billion as of August 2. UPI Tax Payment Limit: Increased from Rs 1 lakh to Rs 5 lakh per transaction. Cheque Clearing: Introduction of continuous cheque clearing with quicker clearance times. Shaktikanta Das highlighted that the Q1FY25 growth moderation is due to updated high-frequency data. The steady repo rate reflects a strategic balance aimed at navigating economic uncertainties while ensuring stability. What are your thoughts on these developments? 💬📈 #RBI #MonetaryPolicy #InterestRates #EconomicForecast #Inflation #Finance #IndiaEconomy #ShaktikantaDas

Summary of brokerage notes on RBI Policy !! Goldman Sachs: RBI keeps policy rates on hold with a balanced statement; 50bp CRR cut announced GS expects headline inflation to remain closer to the RBI’s target at ~4.5% yoy in 1H CY25 Easing of food inflation along with the softness in economic activity growth, should open up room for monetary policy easing GS continues to expect a shallow easing cycle of total 50bp rate cuts from the RBI, with 25bp each in the February 2025 and April 2025 meetings Jefferies: RBI policy on expected lines RBI keeping rates high to control inflation but at the same time eases market rates and liquidity Banks can offer higher rates on FCNR deposits for NRIs, positive for banks Morgan Stanley: MS expects a shallow easing cycle from 1QCY25, premised on an improving inflation outlook Policy guidance – prudent and cautious The CRR cut augurs well for the system liquidity MS expects rate easing from Feb-25, with two consecutive rate cuts of 25bps each MS do expect growth to pick up in 2HF25, supported by government spending and agriculture growth Nomura: India: RBI stays defiantly behind the curve The more fundamentals are ignored, the greater the growth sacrifice and the deeper the cuts needed over time policy decision is a disappointment see rising downside risks to our baseline GDP growth forecasts, frontloaded cuts and potentially a lower terminal rate than in baseline Nuvama: the economic momentum has slowed and may stay in a slow lane in coming quarters While government spending may pick up, credit growth is clearly Slowing Furthermore, slower revenue and profits for businesses would mean a slower business capex Meanwhile, core inflation remains benign and the spike in food inflation may not last long Hence, the evolving domestic growth-inflation mix strengthens the case for rate cuts in the coming year, potentially starting February Although timing is more a function of trend in USD-INR and global bond yields. IIFL: CRR cut to drive 4-5bps of NIM uptick for banks estimate 4-5bps of NIM and 0.5-1% PAT benefit for banks, expect retail term-deposit rates to have peaked out and bulk deposit rates to ease Delayed and a shallow repo rate-cut cycle is an incremental positive for banks and HFCs, but negative for the NBFCs PC: Measures favouring better currency management; Inflation-growth commentary in line Policy remains prudent considering inflation and decent growth outlook RBI Focuses on creating ammunition to better manage currency weakness as President Trump takes office in Januray’25 Basis the future Inflation-GDP trajectory, we retain our stance of repo rate cut in Febraury’25 Shorter-end of the yield curve has dipped while longer-end has inched up USD-INR strengthened by 8-10p PC’s FY25 GVA growth estimate is lower than RBI at 6.4% https://lnkd.in/dyPFJ3ue

It was a pleasure to discuss our view on RBI's latest monetary policy with CNBC-TV18, alongside Pranjul Bhandari, soumya kanti ghosh and Neeraj Gambhir. We discuss the implications for banks at 8.05 and 17.05 mins. Three key implications: 1) CRR cut of 50bps - Estimate 4-5bps of NIM and 0.5-1% PAT benefit for banks, and expect PSU banks with low LDR to be a key beneficiary. - In terms of second order impact, we expect retail term-deposit rates to have peaked out and bulk deposit rates to ease. 2) Higher interest rate ceiling for FCNR(B) deposits - do not expect it to drive higher USD deposit mobilisation, given the current rates offered by banks are well below the existing ceiling. 3) Enhancement of collateral-free agricultural loan limit should aid banks’ small and marginal farmers (SMF) priority sector lending portfolio, but rising Agri stress is worth monitoring.

RBI Policy MPC Keeps repo rate unchanged for 9th time in a row Stance also remained unchanged at withdrawal of accommodation In line with the broader market expectations, the Reserve Bank of India's Monetary Policy Committee (MPC) decided to keep the benchmark repo rate unchanged at 6.5 percent on August 8. The MPC also kept the stance unchanged, staying focussed on 'withdrawal of accommodation'. The decisions were taken with a majority of 4:2 by the six-member rate-setting panel. The other rates namely, standing deposit facility (SDF) rate also remained unchanged at 6.25 percent and marginal standing facility at 6.7 percent. The bank rate was also maintained at 6.7 percent. “There is a good amount of convergence in RBI policy and market expectation,” RBI Governor Shaktikanta Das said while delivering his MPC speech. The governor also stressed that the base effect advantage may wear out from the December quarter of FY25, while asserting that ensuring price stability is very critical to ensure period of sustained growth. He also took cognizance to divergence in policy taken across the globe.

RBI's Monetary Policy Committee decides to keep the repo rate unchanged at 6.5% for the seventh consecutive time. Take a look at the key takeaways from the RBI policy announcement, here 👇 #rbi #mpc #reporate #rbipolicy