Stay updated with live updates of the RBI’s Monetary Policy Committee (MPC) Meeting December 2024. Follow Governor Shaktikanta Das’s announcements on repo rate, interest rates, CPI inflation as well as GDP projections.
RBI Monetary Policy Meeting December 2024 Live Updates: RBI Governor Shaktikanta Das is set to announce the RBI MPC’s decision on the repo rate at 10 am today, Friday. Most analysts expect the status quo on the repo rate at 6.50% for the 11th time in a row. However, Nomura sees a 25-basis-point rate cut. Most analysts also feel that the RBI might cut CRR on Friday.
In the previous monetary policy in October, the RBI MPC had kept the repo rate unchanged at 6.5%. However, it had changed the monetary policy stance from ‘withdrawal of accommodation’ to ‘neutral’.
The repo rate is 6.50%, unchanged since February 2023. CRR remains at 4.5%, while the statutory liquidity ratio stands at 18 percent.
The repo rate is the interest rate at which the RBI lends money to banks to meet short-term needs. CRR is the percentage of a bank’s total deposits that must be kept in cash with the RBI, whereas SLR is the portion of a bank’s net demand and time liabilities (deposits) that must be held in the form of gold, cash, or government-approved securities.
The RBI is mandated to keep CPI inflation in the range of 2-6%. It uses repo rate, reverse repo rate, CRR, and other instruments to control inflation.
Currently, the RBI projects the CPI inflation at 4.5% for FY25. According to analysts, the central bank may have to revise it upwards to 4.8%, due to a recent spike in the inflation rate to 6.2% in October.
On the GDP growth front, the central bank had projected a 7.2% GDP growth for FY25. It is likely to be revised on Friday following the latest September 2024 quarter numbers that showed India’s GDP growth slowing to a seven-quarter low of 5.4%.
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RBI MPC Meeting Live Updates: Meet the MPC members
The Monetary Policy Committee (MPC), led by RBI Governor Shaktikanta Das, consists of three external members who serve a four-year term, with their appointments made by the central government. Recently, the government appointed three new external members to the committee: Saugata Bhattacharya, Economist; Dr. Nagesh Kumar, Director and Chief Executive of the Institute for Studies in Industrial Development; and Professor Ram Singh, Director of the Delhi School of Economics, University of Delhi.
The internal members of the MPC include Shaktikanta Das as the Chairperson, Michael Debabrata Patra, RBI Deputy Governor in charge of monetary policy, and Rajiv Ranjan, Executive Director of the RBI’s Monetary Policy Department.
RBI MPC LIVE Updates: What Happens to Your Home Loan Rates If RBI Keeps the Repo Rate Unchanged for the 11th Consecutive Time?
The Reserve Bank of India’s (RBI) repo rate plays a crucial role in determining home loan rates. Homebuyers eagerly await the RBI’s upcoming decision, as it will directly impact loan interest rates, including those for home loans in India.
When the RBI raises the repo rate, banks generally increase their lending rates, resulting in higher home loan interest rates (both fixed and floating). Conversely, a decrease in the repo rate leads to lower lending rates, making home loans more affordable. Borrowers with floating interest rates will feel the effect immediately or at their next rate reset.
For homeowners or those paying Equated Monthly Installments (EMIs), a stable repo rate means their interest rates will remain unchanged for now.
RBI Monetary Policy 2024 Live: Buzz Surrounding the New RBI Governor
The policy press conference is likely to be filled with questions about whether Governor Das will receive an extension or who his successor might be, if no clarity is provided before Friday. His term is set to end on December 10, 2024. When Das was last extended in 2021, the government had announced it over a month in advance.
RBI Monetary Policy 2024 Live: Analysts Expect CRR Cut
To ease liquidity, analysts anticipate that the RBI may reduce the Cash Reserve Ratio (CRR), the portion of deposits that banks are required to hold as reserves with the central bank. Upasna Bhardwaj, an economist at Kotak Mahindra Bank Ltd., stated that a CRR cut would serve as a soft signal for an upcoming monetary easing cycle.
RBI Monetary Policy December 2024 Live: Additional Liquidity Measures Expected
Economists also expect the RBI to introduce measures to address liquidity concerns. Recent capital outflows and pressure on the rupee have added complexity to the policy outlook. The rupee has hit new lows, and any easing of monetary policy could further weaken the currency by reducing the interest rate differential with the US.
Tight liquidity conditions have resulted from the central bank’s large forex interventions and currency outflows from the banking system. According to ICICI Securities Primary Dealership, the core banking system liquidity surplus has dropped to Rs 1.2 trillion, down from Rs 4.5 trillion at the end of September.
RBI Monetary Policy December 2024 Live: More MPC Members May Vote for a Rate Cut
In the October meeting, external member Nagesh Kumar voted in favor of a 25 basis point rate cut. With increasing calls for a reduction in interest rates, more MPC members may join him in supporting a rate cut. Madhavi Arora, an economist at Emkay Financial Services Ltd., anticipates that at least two members may vote for lowering the key rate to support growth.
RBI Monetary Policy December 2024 Live: Growth-Inflation Divergence Poses a Dilemma for the RBI MPC
The RBI faces a tricky dilemma with the ongoing divergence between growth and inflation. Volatile food prices pushed headline inflation to 6.2% in October, the fastest pace in over a year. According to Radhika Rao, an economist at DBS Bank, this growth-inflation divergence will create a difficult decision for the RBI MPC. She expects the RBI to lower its full-year growth projection by 30-40 basis points and revise its inflation forecast upwards from the current 4.5%.
RBI MPC LIVE Updates: Das & Co. May Lower GDP Forecast
The central bank’s growth forecast of 7.2% for the fiscal year through March 2025 is now at risk after the 160-basis point miss in the second-quarter GDP figures. Economists, including those from Goldman Sachs, have revised their growth projections downward, with Goldman now predicting a 6% expansion, down from a previous estimate of 6.4%.
RBI Monetary Policy December 2024 Live: A Shift in the MPC’s Policy Narrative is Inevitable
“We believe a shift in the MPC’s policy narrative is inevitable, starting with acknowledging the growth slowdown and the need for counter-cyclical support,” said Teresa John, an economist at Nirmal Bang Institutional Equities Ltd., to Bloomberg. While the RBI may hold off on rate cuts until next year, she noted that a surprise move cannot be entirely ruled out.
RBI Monetary Policy Meet December 2024: Inflation & Growth Remain Key Challenges for Shaktikanta Das
Finance Minister Nirmala Sitharaman and Commerce Minister Piyush Goyal have both called for lower borrowing costs in recent months. Some economists are urging the RBI to take further action to stimulate lending and drive growth. Governor Das is under pressure to tackle both inflation and growth challenges, with his six-year term set to end next week, and no clear indication of an extension.
RBI Monetary Policy Meet December 2024: Rate Cut Unlikely
Governor Shaktikanta Das has repeatedly ruled out an immediate rate cut, despite the RBI adopting a neutral stance in its October meeting. Inflation continues to remain above the RBI’s 4% target. However, the weaker-than-expected GDP growth of 5.4% for the July-September period is raising concerns that the RBI’s restrictive policies may be impacting economic activity.
RBI Monetary Policy Meet December 2024: RBI Kept Its Policy Rates Unchanged Over The Last Ten Meetings
Over the last ten meetings, the RBI has kept its policy rates unchanged at 6.5%. The central bank has taken a more hawkish stance on inflation, primarily due to persistent food price inflation that has not been effectively contained. At the same time, it remains optimistic about growth, driven by favorable monsoon rains and expectations of a revival in capital expenditure.
RBI Monetary Policy Meet December 2024: Shaktikanta Das To Announce Repo Rate Decision Today
The RBI is set to announce its interest rate decision today, as the country grapples with high inflation and sluggish GDP growth. Stay tuned for the latest updates and detailed analysis on India’s economic outlook.
