Perspective on Monatary Policy Committee Announcement by Mr. Nikhil Gupta, Chief Economist, MOFSL Group
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Below the Quote on MPC Announcement by Mr. Nikhil Gupta, Chief Economist, MOFSL Group
As broadly expected, the RBI kept interest rates unchanged. What probably was more important was the Governor's emphasis on the headline inflation (with food inflation playing an important role) and the focus on inflation deceleration when growth remains so good. This, to our mind, indicates that rate cuts are not coming anytime soon (unless growth falters).
-- The MPC has revised down its 1QFY25 GDP growth forecast to 7.1% (from 7.3% earlier), while retaining the full year projection at 7.2%.
-- Similarly, 2Q inflation is revised up to 4.4% (from 3.8%), while retaining the full-year projection at 4.5%.
Overall, the policy and the forward guidance was in line with our expectations and we appreciate the RBIs resolve to focus on inflation at this time when the growth is so strong.
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