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RBI Monetary policy committee meeting 2024 highlights: Today, December 6, the Reserve Bank of India (RBI) released its fifth bi-monthly monetary policy for FY25. For the eleventh consecutive meeting, the six-member Monetary Policy Committee (MPC), chaired by RBI Governor Shaktikanta Das, voted by a majority of 4 to 2 to maintain the benchmark repo rate at 6.5%, maintain the monetary policy stance of "Neutral," and remain unwaveringly focused on a long-term alignment of inflation with the target while promoting growth. Additionally, the cash reserve ratio (CRR) was cut by 50 basis points (bps) to 4% by the rate-setting panel. Highlights of the RBI MPC: Important lessons learned from the December RBI Policy Highlights of the RBI MPC: The following are the main conclusions from today's December RBI Policy: 1] Policy Actions: The 6.5% repo rate remained unchanged. The policy's "Neutral" attitude remains unaltered. SDF rate remained constant at 6.25%. MSF rate remained same at 6.75%. The bank rate remains at 6.75%. By a vote of 4 to 2, MPC members decided to keep things as they were. 50 bps to 4% CRR drop Two tranches of ₹1.16 lakh crore would be released into the banking sector by the CRR cut. 2. GDP Growth Projections: Estimates for FY25 GDP growth dropped from 7.2% to 6.6%. Estimates of quarterly GDP growth are FY25: Reduced from 7.2% to 6.6% Q3FY25: Reduced from 7.4% to 6.8% Q4FY25: Reduced from 7.4% to 7.2% Q1FY26: Reduced from 7.3% to 6.9% Q2FY26: Forecast for CPI Inflation at 7.3% 3. The CPI inflation target for FY25 was raised from 4.5% to 4.8%. The forecasts for quarterly inflation are FY25: Raised to 4.8% from 4.5% Q3FY25: Raised to 5.7% from 4.8% Q4FY25: Raised to 4.5% from 4.2% Q1FY26: Raised to 4.6% from 4.3% Q2FY26: At 4% 4] Additional measures: The FX-Retail platform will be connected to NPCI's Bharat Connect platform. The Secured Money Markets benchmark, the Secured Overnight Rupee Rate (SORR), will be introduced. Collateral-free agricultural loans would now be worth ₹2 lakh per borrower instead of ₹1.6 lakh. Through the UP, small finance banks are allowed to offer pre-approved loan lines. Forming a committee to Suggest the Financial Sector's Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) Launch of Mule Hunter and the Introduction of Podcasting as an Extra Communication Channel. An AI method for locating mule bank accounts Launch of the Open Regulation Initiative "Connect 2 Regulate"

RBI MPC Meeting June 2024 Highlights: Repo rate unchanged , Real GDP growth at 7.2%. Key Highlights: • Key interest rate (repo) remains unchanged at 6.5%. • Repo rate was last hiked in February 2023. • Focus on withdrawal of accommodative monetary policy stance to bring down inflation. • Growth projection for FY 25 raised to 7.2% from 7%. • Inflation forecast for FY 25 retained at 4.5 %. • Food inflation still remains a concern. • The current account deficit for FY 25 expected to remain well within the sustainable level. • Foreign exchange reserves touched a fresh high of $ 651.5 billion as on 31 st March 2024. • Bulk deposit threshold raised to ₹ 3 crore from ₹ 2 crore. • Export and import regulations under Foreign Exchange Management Act (FEMA) to be rationalised. • RBI to set up Digital Payments Intelligence Platform to harness advanced technologies to mitigate payment fraud risks. • Auto replenishment of balance Fastag,NCMC,and UPI - Lite wallets brought under the e - mandate framework. • The Monetary Policy Committee decided by a 4:2 majority to keep the policy repo rate unchanged at 6.5%. Consequently, the standing deposit facility (SDF) rate remains at 6.25%, and the marginal standing facility (MSF) rate and the bank rate at 6.75%. Motilal Oswal Financial Services Ltd State Street WellsFargo.com Goldman Sachs Citi HSBC

https://lnkd.in/gWpjh7am The repo policy rate remained unchanged at 6.5%. This will help to manage liquidity and credit creation in the system. With a projected 7.5% GDP Growth rate this will enhance and boost the credit offtake and consumption. With rising inflation, constant growth policy with an unchanged Repo rate, RBI's monetary policy signals the will to improve consumption in the economy. Though OMO has led the growth of Repo there was no mention of OMO in the monetary policy announcement. Though CPI has remained stagnant that implies no change in unemployment levels

Key takeaways from the MPC meeting : 1) Repo Rate: Maintained at 6.5% with a 5:1 majority, aiming to align inflation with targets while supporting growth. 2) SDF & MSF Rates: SDF rate at 6.25%, MSF and Bank rates at 6.75%. 3) GDP Forecast: Projected steady growth of 7% in Q2, 7.4% in Q3 and Q4, with a slight dip to 7.3% in Q1 of FY26. FY25 forecast remains at 7.2%. 4) Inflation: Projected at 4.5% for FY25, with quarterly figures of 4.1% (Q2), 4.8% (Q3), and 4.3% (Q1 FY26). 5) Indian Rupee: Continues to be the least volatile among global currencies. 6) Das’ Message to NBFCs: Urged banks and NBFCs to carefully assess their exposures. 7) FPI Flows: Shifted from net outflows to net inflows of $19.2 billion between June and October. 8) Current Account Deficit: Widened to 1.1% of GDP in Q1 FY25. 9) Responsible Lending: Banks and NBFCs cannot levy pre-payment penalties on floating rate loans to individuals for non-business purposes. 10) Urban Cooperative Banks (UCBs): Discussion paper on capital raising avenues to be issued for stakeholder feedback. 11) Climate Risk Assessment: RBI to launch the Reserve Bank Climate Risk Information System (RBris). 12) UPI Enhancements: UPI One Three Pay transaction limit raised to Rs 10,000; UPI Light wallet limit increased to Rs 5,000, with per-transaction limits up to Rs 1,000. 13) RTGS & NEFT: Beneficiary account name lookup facility to be introduced to reduce wrong credits and fraud. These highlights focus on growth, inflation control, financial stability, and enhancing digital payment systems.

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.

@ByElite16112 · 29m "particularly true for service providers: They recently increased prices by four percent over the year - far away from the two percent target." "oil pri HatedBycarnivore-group @ByElite16112 · 25m . As a result, consumers pay more for gas and heating oil." What is RBI' interest percentage structure?? "deposit rate, which is the benchmark on the financia @RBI @imfcapdev @HolySeeUN @DasShaktikanta @RaghuramRajan6 @nsitharaman @PChidambaram_IN HatedBycarnivore-group @ByElite16112 · 23m What is RBI' interest percentage structure?? the benchmark on the financial market and which financial institutions receive when they park surplus funds @RBI @imfcapdev @HolySeeUN @DasShaktikanta @RaghuramRajan6 @nsitharaman @PChidambaram_IN @KapilSibal @ShashiTharoor HatedBycarnivore-group @ByElite16112 · 22m "core inflation, which does not take into account the volatile prices for energy and food: it has fallen to 2.9 percent." [ Cash Reserve Ratio (CR @RBI @imfcapdev @HolySeeUN @DasShaktikanta @RaghuramRajan6 @nsitharaman @PChidambaram_IN @KapilSibal @ShashiTharoor HatedBycarnivore-group @ByElite16112 · HatedBycarnivore-group @ByElite16112 · 22m when they park surplus funds with the central bank, at 4.0 percent - the highest level since the start of the monetary union in 1999. And the main refinancing rate, which is Banks borrowing money from the ECB is likely to remain at 4.5 percent." HatedBycarnivore-group HatedBycarnivore-group @ByElite16112 · 20m Cash Reserve Ratio (CRR) but public still increase inflation by having savings increSe : "the 'hawks' would give in to the 'doves'." @RBI @imfcapdev @HolySeeUN @DasShaktikanta @RaghuramRajan6 @nsitharaman @PChidambaram_IN @KapilSibal @ShashiTharoor HatedBycarnivore-group HatedBycarnivore-group @ByElite16112 · 19m "the 'hawks' would give in to the 'doves'." : "patience and  STEALING. " wait-and-STEAL approach "therefore also a test of CBI-RBI's authority ": "particular @RBI @imfcapdev @HolySeeUN @DasShaktikanta @RaghuramRajan6 @nsitharaman @PChidambaram_IN @KapilSibal @ShashiTharoor HatedBycarnivore-group @ByElite16112

For the seventh consecutive time, the Reserve Bank kept the repo rate unchanged. In the first bi-monthly monetary policy review of the current financial year, the Reserve Bank of India (RBI) kept the policy rate repo unchanged at 6.5 percent for the seventh consecutive time. The policy rate has been kept unchanged to bring down inflation to four percent and accelerate economic growth amid global uncertainty. The central bank has also maintained the GDP growth rate for 2024-25 at seven percent and retail inflation at 4.5 percent. Repo is the interest rate at which commercial banks take loans from the central bank to meet their immediate needs. RBI uses it to control inflation. Keeping the repo rate at 6.5 percent means that there is less possibility of change in monthly installment (EMI) on various loans including houses, and vehicles. Five of the six members of the Monetary Policy Committee – Dr. Shashank Bhide, Dr. Ashima Goyal, Dr. Rajeev Ranjan, Dr. Michael Debabrata Patra, and Shaktikanta Das voted in favor of maintaining the policy repo rate while Prof Jayant R Verma voted in favor of a 0.25 percent reduction in it. Mr Das said that strong prospects of economic growth give scope for the central bank to focus on its target of bringing inflation to four percent. As uncertainties in food prices remain a continuing challenge, the MPC is cautious about the risk of inflation rising. Due to improvement in the private investment cycle, prospects for investment activities have improved. The economy will also be strengthened by increased capital expenditure by the government, stronger balance sheets of banks and companies, increased capacity utilization, and improved business confidence.

The Reserve Bank of India (RBI) is set to implement additional liquidity measures, as the recent 50-basis-point cash reserve ratio (CRR) cut may have limited impact in the near term, according to economists. They expect the RBI to use instruments like open market operations, foreign exchange swaps, and long-term variable rate repo auctions to stabilize the money market. Governor Shaktikanta Das noted the importance of being "nimble and proactive" in managing liquidity but did not reveal specific operational plans. Economists warn that system liquidity might be strained by March 2025, as banks are likely to tap into the CRR cut to manage non-deposit liabilities, which have risen significantly. The CRR cut is viewed as temporary, with projections of a liquidity release of 90,000 crore in December and 1.16 lakh crore by March 2025. System liquidity has declined from an assessed 1.47 lakh crore in October to 1.34 lakh crore in November. A stronger dollar and the RBI's currency interventions may further affect liquidity, particularly with the rupee's depreciation to 84.74/$1. Ongoing inflationary pressures and a strong dollar could limit the RBI's ability to implement additional repo rate cuts, with expectations of only two opportunities early in the year. There is a consensus on the need to closely monitor liquidity conditions to support sustained credit growth in the economy. #AsiaOperations #FinancialSystemProblems #India Get a full accounting of the security situation in Asia by subscribing to Security Asia. Subscribe now--free of charge--at Substack https://lnkd.in/gPtAUrsX https://lnkd.in/gjUfS_iC

RBI keeps repo rates unchanged & cuts CRR to 4% 10 key points in the monetary policy today. 1) Repo Rate remains unchanged at 6.5% 2) Standing Deposit Facility (SDF) remains unchanged at 6.25% 3) Marginal Standing Facility (MSF) remains unchanged at 6.75% 4) Growth has slowed down, but seems to be bouncing back 5) Real GDP growth for FY25 is now projected at 6.6%, 6) Expected growth rates - Q3 at 6.8% and Q4 at 7.2% 7) CRR cut to 4.0% from 4.5% to ensure no systemic liquidity stress due to tax outflows in the near future 8) CRR cut to release about Rs 1.1 lakh crore in the banking system 9) Inflation expectations raised to 4.8% from 4.5% 10) Increase in the interest rate ceilings on FCNR(B) deposits, to attract inflows ----- Peeyush Chitlangia, CFA I help you decode complex financial and macro concepts