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Below the MPC quote from Dr. Poonam Tandon, Chief Investment Officer at IndiaFirst Life Insurance Company.

The RBI continued to maintain its "status quo" on policy rates and no change in “withdrawal of accommodation” stance for sixth consecutive policy review of no rate action. The RBI stated that global narrative is getting benign as global growth is expected to remain steady in 2024 with global trade showing signs of recovery and inflation softening considerably. On the domestic side as well momentum in economic activity continue to remain strong. The FY25 GDP growth is estimated at 7% with risk evenly balanced. On the other hand, RBI expects CPI at 5.4% for FY24 and that for FY25 at 4.5% assuming normal monsoon. The RBI is comfortable with the current liquidity conditions and stated that it will continue to remain nimble and flexible in liquidity management through Repo and Reverse Repo transactions. It is looking to review the regulatory framework for electronic trading platforms (last updated in 2018) and the revised norms will be shared with stakeholders for feedback. This will help the customers make an informed decision and make lending process more transparent. It has also decided to allow resident entities to hedge price of gold in OTC segment in IFSC. Overall, the commentary was balanced with adequate focus on inflation while maintaining the growth outlook. We believe the RBI has enough space for holding rates at current levels and may not cut rates in at least first half of FY25.

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