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Below the Quote on RBI Monetary Policy Committee Announcement by Mr. Killol Pandya, Senior Fund Manager of Debt at JM  Financial Asset Management Ltd

RBI Monetary Policy Takeaways:

* Reserve Bank of India (RBI) kept Repo rate unchanged at 6.50%, Standing Deposit Facility (SDF) at 6.75% and Marginal Standing Facility (MSF) at 6.75%.
* The Monetary Policy Committee (MPC) retained its stance as ‘Neutral’. The principal drivers for the status quo stance were RBIs focus on managing the inflation-growth dynamic while navigating global and domestic volatility and uncertainty. RBI reiterated its objective of bringing headline inflation towards the targeted 4.00% on a durable basis.

* RBI significantly lowered its Gross Domestic Production (GDP) expectations for FY24-25 to 6.6%. (Vs 7.2% earlier) and hiked its Consumer Price Index (CPI) inflation forecast for FY24-25 to 4.8% (Vs 4.5% earlier).
* RBI expressed its view of a resurgent growth and softening in inflation in the coming months but reiterated the need for vigilance at this juncture, given the risks posed by volatile food prices and uncertainty regarding global commodity prices (esp. crude oil).
* In line with market expectations, RBI reduced Cash Reserve Ratio (CRR) by 50 bps (to 4%), thereby releasing ~INR1.16 tn. in two fortnightly tranches starting 14th December, 2024.
* RBI reiterated its position of being ‘nimble footed and flexible’ in managing liquidity conditions.
 

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