Cushman & Wakefield comments on RBI’s decision to keep the repo rate at 6.5%.
“RBI’s decision to hold the repo rate at 6.5% bodes well for Indian Real Estate and its ancillary industries, as it is expected to maintain the ongoing momentum in housing registrations in the final month of the year. With GDP growing at 7.6% in the July to September quarter - faster than the expected rate - Inflation relatively in check, the macro-economic indicators seem healthy enough and should act as an ideal platform for sustained infrastructural and economic growth. We can expect more homebuyers and fence-sitters coming to the fore and fulfilling their property purchases towards the end of this quarter and going into 2024. From a borrowing cost perspective, this move also ensures that homebuyers’ EMIs don’t increase whereas for developers, it doesn’t increase their financial burden owing to the consistent rate of cost of capital.”
2:20 PM
Here's what Jyoti Prakash Gadia, Managing Director at Resurgent India had to say on MPC meet
On expected lines, the RBI has kept the repo rate unchanged, primarily led by the overhang of sticky inflation with a target of 4% in mind, which is apparently being treated as sacrosanct. Simultaneously, buoyed by the high last quarter's GDP numbers, the RBI has chosen to revise the GDP targets from 6.5% to 7% for 2023-24 which is a healthy sign and augurs well for the economy.
RBI is not too optimistic about the inflation trend and has maintained the projected level at 5.4% apprehending food inflation and supply-side uncertainties. This has prompted RBI to maintain its stance and the repo rate at the existing level.
On the liquidity front, while the RBI has assured to keep a quick active approach, to facilitate better funds management an announcement has been made to allow reversal transactions under MSF and SDF on weekends and holidays. This will provide more maneuverability to the banks to shift their position of surplus or deficit liquidity on weekends and holidays thereby bringing in more efficiency and cost-effectiveness.
Additional Use of cloud computing in banking and the creation of a proposed repository for fin techs is expected to further the customer orientation by use of the latest technology which is a welcome move on the part of RBI
2:11 PM
Post RBI policy view from Palka Arora Chopra, Director, Master Capital Services Ltd.
The Monetary Policy Committee of the Reserve Bank of India decided to maintain the status quo. The Reserve Bank of India's policy announcement is largely based on market expectations and will not have a major impact on the domestic market. Interest rate-sensitive sectors such as autos and real estate will benefit as consumers will now spend more as taking into account borrowing cost forecasts. RBI has revised its FY2024 growth forecast from 6.5% cent to 7% which will boost investor confidence.
Nifty 50 hits the 21000 mark for the first time just around the RBI outcome announcement. Indian market movements ahead will depend upon a combination of International macros and domestic macros and earnings.
1:57 PM
Shishir Baijal, Chairman and Managing Director, Knight Frank India opines on RBI MPC meet
“Steady policy interest rates and maintained policy stance was widely expected and aligns with the trajectory of key global central banks. The undertone however remains precautionary over inflation risks in the upcoming months due to seasonal volatility in food prices. The decision will continue to support the existing momentum of residential real estate demand in India. Despite the escalations in the borrowing costs, the overall housing market has continued to remain upbeat; however, the momentum in the affordable segment has lagged. Thus, a pause is supportive of catering to the housing needs of the vulnerable segment.”
1:50 PM
RBI policy: EMIs won't go up immediately, housing bull run to continue
During the Monetary Policy Committee (MPC) meeting, the Reserve Bank of India (RBI) chose to maintain the repo rate at 6.5 per cent, affirming its dedication to stability while gradually scaling back accommodation to align inflation with the 4 per cent target. Repo rates wield significant influence over the interest rates set by banks for various loans, including home loans. Changes in the repo rate directly impact these loan interest rates.
" With the current repo rate holding steady at 6.5 per cent, existing borrowers can rest assured that their Equated Monthly Instalments (EMIs) won't be immediately affected," said Adhil Shetty, CEO of Bankbazaar.
An unchanged repo rate indicates stability in loan interest rates at banks, making borrowing more affordable. This creates an opportune time to consider loans, especially for significant investments like a home.
1:45 PM
Parijat Agrawal, Head – Fixed Income, Union Asset Management Company Pvt. Ltd shares views on RBI MPC meet
“The policy measures were in line with our expectations and reiterated a focus on bringing inflation to 4% on a durable basis while being supportive of growth. The resilience and optimism about growth were reflected in the upward revision of GDP estimate to 7% for F.Y. 2024. Medium term inflation risks remain from volatile food prices. Liquidity is expected to remain tight in the near term. Reversal of liquidity facilities under both Standing Deposit Facility (SDF) and Marginal Standing Facility (MSF) is a welcome measure and would smoothen the skewed liquidity in the banking system. We maintain our call for a prolonged pause by MPC with any rate cut happening in the second half of F.Y. 2025.”
1:33 PM
Here's what Rajani Sinha, Chief Economist, CareEdge had to say on RBI's monetary policy meet
Today’s monetary policy statement of RBI had a lesser hawkish undertone compared to the preceding October statement. The upward revision of the GDP growth forecast for FY24 to 7%, coupled with the absence of any reference to future OMO sales, represents a favourable development for both the economy and the markets. The Governor underscored the RBI's commitment to striking a balance in monetary policy, navigating between optimism fuelled by a few months of positive data and the risk of policy over-tightening. Additionally, the statement indicated the RBI's comfort with the existing liquidity conditions. Considering the current circumstances, the decision to maintain the status quo in both policy rates and stance appears justified.
A string of favourable developments has positively influenced the broader economic landscape like the upward surprise in growth, benign core inflation, softening of UST yields, and cooling Brent crude prices. However, it is crucial to remain attentive to certain underlying factors that can increase economic headwinds. Following the projected contraction in Kharif production, close monitoring of the progress in rabi sowing is imperative, particularly in light of lower reservoir levels in certain regions. Lower agricultural output not only poses a risk to the growth of the agriculture sector but may also contribute to food inflation. Furthermore, the fragile state of the global economy and the contraction in global trade can potentially have spillover effects on the domestic economy. Consequently, the governor's statement carried a cautious undertone, acknowledging these considerations.
Unsurprisingly, the Monetary Policy Committee of the Reserve Bank of India (RBI) maintained status quo on rates and stance.
The RBI’s GDP growth forecast for this fiscal was revised up to 7.0% from 6.5% in view of the better-than-expected rise in the July-September quarter.
Although the repo rate has been left unchanged, there could be de facto tightening as the RBI may continue to use liquidity compression as and when needed to speed up transmission and rely on macro prudential measures to manage risks to financial stability.
The recently raised risk weights for unsecured, credit card and non-bank lending will crank up capital requirements of financiers and put pressure on lending rates. Additional announcements today for connected lending and digital lending underscores RBI’s vigil on buoyant credit growth.
This fiscal began with a pause on rates and stance and will end the same way. We expect rate cuts only in the first quarter of the next fiscal.
1:19 PM
V. P. Nandakumar - MD & CEO at Manappuram Finance comments on RBI's MPC meet
“The MPC’s decision on Friday (December 8) to keep the key policy rates steady while staying the course on monetary tightening is the best policy prescription that the central bank could deliver at this point of time. The tightening cycle, in my view, will continue till the headline inflation returns to the below 4% mark. For this to happen, we may have to wait for a few quarters more as food price inflation is listed as a major downward risk in the near term. The point, however, to note here is that the past policy actions have started showing results as mirrored in the moderating core inflation print. As economic expansion gathers momentum with the apex bank projecting the real GDP growth at 7% for the current fiscal, a full 50 bps up from its earlier forecast, it is only prudential for the central bank to continue its disinflationary stance. I don’t expect a rate cut on the RBI’s table any time soon”.
1:11 PM
RBI MPC meet updates: Vijay Kuppa CEO InCred Money opines on the announcements
The high interest rates prevailing now make a case for increasing allocation to debt in the portfolio to mitigate any material correction in the Equity portfolio. Investors should remain agile in their investments considering regulators have become vary of excesses forming in the financial space – both lending and investing.
While growth is not expected to be a cause of concern, inflation is. Despite cooling off in the last couple of months and within acceptable limits, it is still higher than the MPC mandated target of 4%.
The RBI is extremely clear and rightly so has a disinflationary stand. As per RBI projections, the headline CPI will come down to 4% only in Q2FY24. Inflation will need to be around 4% on a durable basis for RBI to consider cutting rates. Considering this, any rate cut before Q3FY24 seems unlikely.
It’s time to be ‘cautiously optimistic’! India is a bright spot among the faltering global economic backdrop. Growth numbers have been strong led by Festive sales and rural demand showing some turnaround.ORG: Foreigners Turn Bullish on India Stock Futures After Modi’s Wins
12:56 PM
Balance sheet of financial sector remains robust: RBI's Governor Das
Balance sheet of financial sector remains robust: RBI
12:51 PM
Future is very fickle, providing forward guidance on policy not possible: Governor Das
Future is very fickle, providing forward guidance on policy not possible: Das
12:48 PM
Call rate already gravitating towards repo rate: Governor Shaktikanta Das
Call rate already gravitating towards repo rate, says Das
12:43 PM
Here's what Governor Das said on inflation management
We have a long distance to cover on inflation management, there is no loosening on the table
12:41 PM
'Expect CPI inflation to be high in November', says Das
'Expect CPI inflation to be high in November', says Das
The Reserve Bank of India (RBI)'s Monetary Policy Committee (MPC) decided to keep the repo rate unchanged at 6.50 per cent for the fifth consecutive policy review. The RBI also decided to maintain its policy stance at "withdrawal of accommodation". The central bank raised the gross domestic product (GDP) growth forecast for FY24 to 7 per cent from 6.5 per cent, whereas retail inflation forecast for the current fiscal was retained at 5.4 per cent.
Further, Governor Shaktikanta Das announced the proposal to permit the reversal of liquidity facilities under the Standing Deposit Facility (SDF) and Marginal Standing Facility (MSF) during weekends and holidays effective December 30, 2023, in order to enhance fund management for banks. This measure will undergo review after six months, or earlier, if necessary.
"We propose to allow reversal of liquidity facilities under both Standing Deposit Facility (SDF) and Marginal Standing Facility (MSF) even during weekends and holidays with effect from December 30, 2023," said Das in his monetary policy statement.
 "RBI MPC meet highlights: Inflation is our top priority, says Guv Das")
