Sanmarg’s Post

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 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 Holds Repo Rate Steady Amid Global Rate Cuts - In October 2024, the Reserve Bank of India (RBI) made a significant announcement: it decided to keep the repo rate unchanged at 6.5%. The repo rate, or interest rate at which the RBI loans money to banks, makes this decision significant. When the repo rate stays the same, it means that the interest rates for loans and mortgages from banks are also likely to remain unchanged. This news comes at a time when many other countries, including the United States and New Zealand, are cutting their interest rates. So why did India decide to maintain its rate while others are […]- Read More at :https://lnkd.in/dvtR3PCJ

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

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 Monetary Policy Committee maintained a status quo on the repo rate and stance. The six-member committee of the central bank, with a majority of 4:2, decided to keep the benchmark repo rate unchanged for the eighth consecutive time. The MPC also decided to continue its stance of ‘withdrawal of accommodation’. RBI governor’s speech emphasized easing inflation and firming economic growth while food inflation remains a cause of concern. While keeping CPI inflation projections unchanged from previous monetary policy, RBI raised GDP projections. One important thing RBI Governor stated in the speech was, ‘While the RBI keeps a watch on the impact of monetary policy in advanced economies, RBI will act according to the domestic growth-inflation conditions and the outlook.’ Market mood uplifted post Monetary Policy announcement! Sensex crossed 76,000 while Nifty crossed 23,000 level, as GDP growth projection revised to 7.2% from 7.0% earlier. Bank Nifty is up by 1%+ following remarks of RBI governor on sound and resilient banking system and strong financials by NBFCs. #RBIMonetaryPolicy #NineStarBroking #FinanceUpdates

The RBI has kept the repo rate unchanged at 6.5%, shifting its stance to "neutral." This decision reflects caution over inflation risks but opens the door for future rate cuts, especially with signs of economic slowdown. The real estate sector awaits further developments for growth. #linkdine #share #market #finance #economy #business #banking

RBI MPC meeting live updates: RBI keeps repo rate unchanged at 6.5%, cuts CRR to 4%, RBI Monetary Policy Meeting LIVE: The Reserve Bank of India’s (RBI) announced its fifth bi-monthly monetary policy of FY25, today, December 6. The six-member Monetary Policy Committee (MPC) led by RBI Governor Shaktikanta Das decided by a 4 to 2 majority to keep the benchmark repo rate unchanged at 6.5% for the eleventh straight meeting, and maintain the monetary policy stance ‘Neutral’ and to remain unambiguously focused on a durable alignment of inflation with the target, while supporting growth. Moreover, the rate setting panel slashed the cash reserve ratio (CRR) by 50 basis points (bps) to 4%.

Repo rate remains unchanged by RBI as on yesterday post MPC meet. However Cash Reserve Ratio has been reduced to 4% from 4.5% to meet the liquidity demands in the market, basically to improve lending and allowing banks to earn interest income. While the core inflation excluding food is said to be below 4.5% , it can be expected that a 25 bps cut will materialize in the next MPC meet. However, as I stand on my ground that interest rates are just tools of the RBI to manage money circulation in the market to balance growth and inflation. It has nothing to do with human capital development, ease of business or living conditions of citizens. Consumption cannot be driven by interest rate cuts alone. That is the responsibility of the government to come up with policies that cuts government spending on unnecessary assets and put the revenue receipts to the right use. RBI cannot provide a solution more than a rate cut probably in the next MPC but government has a 1000 things to ensure the consumption or house hold savings pick up in the economy again. #MPC #CRR#Repo#RBI#Consumption

RBI Monetary Policy Review December 2023: Why RBI Has Kept Repo Rate Unchanged While Growth Forecast Revised Upwards The Reserve Bank of India (RBI) recently concluded its December 2023 Monetary Policy Review, wherein it decided to maintain the repo rate unchanged, despite revising the growth forecast upwards. #Bankingsector #Economicforecasting #governmentexams #Monetarypolicy #RBIdecisions