Perspective on MPC Announcement by Mr. Nikhil Gupta, Chief Economist, MOFSL Group
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Below the Perspective on MPC Announcement by Mr. Nikhil Gupta, Chief Economist, MOFSL Group
RBI keeps policy rates unchanged
FY25 growth projections revised up to 7.2% (from 7% earlier), inflation kept unchanged at 4.5%
-- The Governor explicitly mentioned that the RBI does look at the global Central Banks' policies, but the RBI's monetary policy is primarily determined by domestic fundamentals. This, as we have highlighted many a times, is the most apt position and an explicit mention will certainly help guide market expectations.
-- RBI committed to bring bank inflation at 4% on durable basis.
Overall, we continue to believe that rate cuts in India could happen only in late CY24 or early 2025, based on domestic and global economic growth (inflation doesn't seem to be a significant policy variable at this stage). Also, we continue to believe that India's real GDP growth could be ~6.5% in FY25, lower than RBI's projection.
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