RBI MPC Updates: Shaktikanta Das headlines inflation, says no room for knee-jerk reactions

RBI Monetary Policy Meeting Dec 2024 Updates: Catch all the updates here

12:10 PM

MPC committed to balancing inflation & growth; inflation has to be brought down for sustainable growth: Das

12:05 PM

RBI MPC Meet LIVE: 'The commentary softened to acknowledge cyclical growth risks'

Radhika Rao, Senior Economist, DBS BANK, Singapore, said, "While the commentary softened to acknowledge cyclical growth risks, infusing permanent liquidity was accorded priority in light of the recent squeeze on account of tax outflows, a likely negative BOP balance in the quarter and stepped-up FX intervention."

11:41 AM

RBI raises collateral-free agriculture loan limit to Rs 2 lakh per borrower

The Reserve Bank on Friday enhanced the collateral-free agriculture loans limit to Rs 2 lakh per borrower from the existing Rs 1.6 lakh in view of inflation and rise in farm input costs. At present, banks are required to extend collateral-free agriculture loans up to Rs 1.6 lakh per borrower. This limit was enhanced from Rs 1 lakh, set in the year 2010 to Rs 1.6 lakh in the year 2019.

11:38 AM

Highlights of December monetary policy announced by RBI Governor Shaktikanta Das on Friday

Key interest rate (repo) kept unchanged at 6.5%

RBI continues with 'neutral' monetary policy stance

Cash Reserve Ratio (CRR) reduced to 4% from 4.5%, to unlock Rs 1.16 trillion of bank funds

RBI sharply lowers GDP growth forecast for FY25 to 6.6% from 7.2%

Inflation projection for FY25 raised to 4.8% from 4.5%

Collateral-free loan for agriculture sector raised to Rs 2 lakh per borrower from Rs 1.6 lakh

Interest rate ceiling on FCNR (B) deposits raised

Small finance banks permitted to extend pre-sanctioned credit lines through UPI

RBI to launch podcasts for wider dissemination of information to general public

RBI to set up an expert panel to develop a framework for responsible, ethical use of AI in the financial sector

Next monetary policy meeting scheduled for February 5-7, 2025.

11:31 AM

RBI keeps repo rate unchanged, cuts banks' CRR and lowers GDP forecast

The Reserve Bank of India (RBI) kept its key interest rate unchanged on Friday, but lowered the economic growth forecast to 6.6 per cent for FY25 from the earlier projection of 7.2 per cent. It cut the cash reserve ratio (CRR) that banks are required to hold, effectively easing monetary conditions as economic growth slows. The six-member monetary policy committee (MPC) continued with a “neutral” stance as it kept the repo rate at 6.50 per cent for the eleventh consecutive review. The CRR will be reduced to 4 per cent from 4.5 per cent.

 

Read full report here

11:28 AM

RBI MPC Meet LIVE: Indian shares erase losses after cenbank eases liquidity

Indian shares erased early losses on Friday, helped by financials, after the Reserve Bank of India (RBI) cut lenders' cash reserve ratio (CRR) by 50 basis points to ease liquidity conditions, while keeping interest rates unchanged. The NSE Nifty 50 was down 0.05 per cent to 24,696.2 points, as of 11:20 am IST, while the BSE Sensex traded flat at 81,763.25. The benchmarks were down about 0.3 per cent each after the RBI kept rates unchanged, but before it lowered the CRR to 4 per cent.

11:25 AM

RBI MPC Meeting LIVE: 'RBI delivered in line with our expectations'

Upasna Bhardwaj, Chief economist, Kotak Mahindra Bank, Mumbai, said, "The RBI delivered in line with our expectations. While retaining its focus on last mile disinflation being achieved the RBI has taken note of the tightening durable liquidity and hence delivered the CRR cut." She added, "We see room for a 25bp repo rate cut in February with much dependent on the downside risk to growth which we foresee. Further disinflationary trends and global environment will also be key."

11:23 AM

RBI MPC LIVE: Small finance banks permitted to extend pre-sanctioned credit lines through UPI

11:22 AM

No rate cut: Lock in fixed deposit interest rates now for maximum returns

Investors should consider short- to medium-term fixed deposits to maximise returns while taking advantage of the current rate environment. This strategy is particularly prudent if a rate cut is anticipated in the near future.

 

“"FD investors should make calculated decisions based on the current and expected interest rate environment. From next year, the repo rate may begin to decline if inflation moderates, a goal the RBI is working hard to achieve," said Adhil Shetty, CEO of Bankbazaar,” said Adhil Shetty, CEO of Bankbazaar.

Read full report here

11:20 AM

Repo rate unchanged: 'FD investors should make calculated decisions'

The Reserve Bank of India (RBI) has maintained the repo rate at 6.50%, unchanged since April 2023. This decision continues to benefit fixed deposit (FD) investors, who can take advantage of the prevailing high interest rates. Locking in deposits now allows investors to secure attractive returns over the long term.

  

Investors should consider short- to medium-term fixed deposits to maximise returns while taking advantage of the current rate environment. This strategy is particularly prudent if a rate cut is anticipated in the near future.

 

“"FD investors should make calculated decisions based on the current and expected interest rate environment. From next year, the repo rate may begin to decline if inflation moderates, a goal the RBI is working hard to achieve," said Adhil Shetty, CEO of Bankbazaar,” said Adhil Shetty, CEO of Bankbazaar.

 

Read full report here

11:11 AM

RBI MPC Meeting LIVE: 'Cut in the CRR by 50 bps would help support growth'

Aditi Nayar, Chief Economist & Head Research Outreach, ICRA Ltd, said, "The MPC's decision to keep the repo rate unchanged was along expected lines, with the CPI inflation exceeding the MPC's upper threshold of 6.0%. However, the cut in the CRR by 50 bps would help support growth, after the sharp downward revision in the forecast for FY2025. If the CPI inflation retraces to below 5.0% by the Dec 2024 print, the likelihood of a repo cut in Feb 2025 will rise sharply."

10:51 AM

RBI to set up expert panel to suggest framework for responsible, ethical use of AI: Governor Shaktikanta Das

The government in October reconstituted the Reserve Bank's rate-setting panel -- Monetary Policy Committee (MPC). This was the second MPC meeting of the reconstituted panel with three newly appointed external members -- Ram Singh, Saugata Bhattacharya and Nagesh Kumar

10:48 AM

Annual retail inflation rose to 6.21% in October, breaching RBI's tolerance band for 1st time in over a year

10:44 AM

Inflation continues to remain a key concern: Reserve Bank of India governor Shaktikanta Das

Inflation continues to remain a worry for the central bank. “Our effort is to follow the flexible inflation target,” said Das, reiterating the RBI’s dual mandate of ensuring price stability and supporting economic growth. He emphasised the importance of balancing inflation control with the broader goal of fostering growth, stating, “Price stability is very important for the people, but growth is also important. The last mile of disinflation is turning out to be prolonged and arduous for economies.”

 

Read full report here

10:42 AM

Collateral free loan in agriculture sector increased from Rs 1.6 lakh per borrower to Rs 2 lakh: RBI Guv Das