IGI Logo

Below the Views on RBI Monetary Policy by Manish Chowdhury, Head of Research, StoxBox

Highlights of RBI Monetary Policy Meeting:

* The MPC meeting outcome was in line with our expectations. A majority of 4:2 kept the repo rate at 6.5%. The SDF and MSF rates were unchanged at 6.25% and 6.75%, respectively.
* The MPC decided by a majority of 4 out of 6 members to remain focused on withdrawing accommodation to ensure that inflation progressively aligns with the target while supporting growth.
* The GDP growth forecast for FY25 was revised upwards to 7.2% from 7% estimated earlier, underpinned by a resilient global economy, rural demand improvement, healthy capacity utilization levels at industries, and robust business optimism. The GDP forecast for Q1, Q2, Q3, and Q4FY25 stood at 7.3%, 7.2%, 7.3%, and 7.2%, compared to 7.1%, 6.9%, 7%, and 7% estimated earlier, respectively.
* The consumer price inflation forecast for FY25 was kept unchanged at 4.5%, with the outlook for agriculture and rural economy looking bright. Also, this year's expectations of a normal monsoon forecast underpinned the inflation outlook. The consumer price inflation forecast for Q1, Q2, Q3 and Q4FY25 remained unchanged at 4.9%, 3.8%, 4.6% and 4.5%, respectively. However, the central bank remains guarded as the trajectory of key rabi crops, particularly pulses and vegetables, needs to be closely monitored given the recent sharp upturn in prices.