RBI MPC highlights: MPC to be on high alert to any signs of derailing of the ongoing disinflation process, says Das | Mint
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Business News/ Economy / RBI MPC highlights: MPC to be on high alert to any signs of derailing of the ongoing disinflation process, says Das

RBI MPC highlights: MPC to be on high alert to any signs of derailing of the ongoing disinflation process, says Das

RBI MPC Meeting Live Updates: The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) kept the repo rate unchanged at 6.5% and maintained the policy stance of 'withdrawal of accommodation' on Friday, December 8. The SDF rate remains at 6.25% and the MSF rate and the bank rate at 6.75%

RBI Monetary Policy Meet: The RBI held its expected stance and policy rates unchanged on Friday, December 8. Premium
RBI Monetary Policy Meet: The RBI held its expected stance and policy rates unchanged on Friday, December 8.

RBI Monetary Policy (MPC) Meet Live Updates: Reserve Bank of India (RBI) Governor Shaktikanta Das unveiled the fifth monetary policy of the financial year 2023-24 today at 10:00 am after a two-day review, amid strong macroeconomic fundamentals and resilient domestic markets. 

The RBI held its expected stance and policy rates unchanged on Friday, December 8. The Monetary Policy Committee (MPC) of the RBI unanimously decided to keep the repo rate unchanged at 6.5 per cent after its December meeting. The MPC maintained the policy stance of 'withdrawal of accommodation' by the majority of 5 out of 6 members. However, Das said that RBI would remain highly alert and prepared to undertake appropriate policy actions, as warranted.

India's economy is resilient, the central bank noted, even though the state of the world economy is still fragile. It kept its CPI estimate for the current fiscal year (FY24) but increased its real GDP projections.

As per Monetary Policy Statement, 2023-24 statement, the next meeting of the MPC is scheduled during February 6-8, 2024.

Stay tuned to LiveMint's blog for all live updates on the RBI Monetary Policy outcome today!

08 Dec 2023, 03:48:10 PM IST

RBI MPC Meeting Live: Views of Murthy Nagarajan, Head - Fixed income, Tata Asset Management on RBI MPC meet

"RBI maintained status quo on rates and stance in this monetary policy. Growth rates for the current year has be upped to 7 percent from 6.5 percent, CPI inflation for the current year has been maintained at 5.4 percent. With GDP growth strong, the focus will be on bringing CPI inflation to 4 percent levels and monetary policy is expected to disinflationary. The Governor stated food inflation remains a risk and the second round effect has to be closely monitored. This policy is on expected lines which acknowledges fall commodity prices including oil . RBI governor acknowledge fall in global yields due as CPI inflation in global markets have fallen. In India, Purchase manager index for manufacturing rose to 56 and services sector buoyancy remained intact with toll collections and port traffic growth in double digits.

Growth has surprised on the upside and CPI inflation is showing persistence due to global shock and weather related disturbances. RBI monetary policy in this type of situation cannot be in autopilot mode and need to be vigilant to control inflation. The ten year Government Securities are expected to be range bound with ten year trading in the range of 7.15 to 7.35 depending on global and domestic macro developments," said Nagarajan.

08 Dec 2023, 03:27:33 PM IST

RBI MPC Meeting Live: Das proposed the cloud facility during the Reserve Bank of India's MPC announcement. Here's all you need to know

Cloud facilities for financial institutions will enhance data security and privacy, RBI Governor Shaktikanta Das said while announcing a proposal to establish data storage facilities for financial institutions (FIs) in India on December 8, 2023.

"Banks and financial entities are maintaining an ever-increasing volume of data. Many of them are utilising various public and private cloud facilities for this purpose. The Reserve Bank is working on establishing a cloud facility for the financial sector in India," read an RBI statement.

The proposed facility is expected to enhance the security, integrity and privacy of financial sector data. It is also likely to enable "scalability and business continuity".

Also Read: RBI monetary policy: Governor Das says central bank working on establishing cloud facility for financials

08 Dec 2023, 02:54:44 PM IST

RBI MPC Meeting Live: Here's when the RBI MPC will change its stance, says RBI Governor Shaktikanta Das

"We are not giving any forward guidance about our specific actions, with regards to stance or with regards to rates. With regards to the stance, the deputy governor has explained what is meant by withdrawal of accommodation, so you can interpret from that when the RBI will probably, if that situation materialises, that can be a situation where RBI can think of changing the stance. 

But at the same time, reaching 4%, I was just like to supplement; reaching 4% should not just be one of the events; it has to be durable 4%, and the MPC should have confidence that yes, 4% has now become durable. So therefore, you can interpret from that when the stance will change, and with regards to the rates, I will not be able to give any forward guidance that will depend on the evolving situation," said RBI Governor Shaktikanta Das at the press meet. 

Also Read: RBI Monetary Policy: What are the subtle hints from the central bank? 10 experts parse MPC decisions

08 Dec 2023, 02:24:43 PM IST

RBI MPC Meeting Live: What does 'withdrawal of accommodation' mean? - Deputy Governor, Michael Debabrata Patra explains at the press meet

"In modern times, monetary policy is chiefly opearted through interest rates, and monetary policy is a tool of stablisation. By stablisation I mean that when GDP goes way above its trend, the task of monetary policy is to bring it down to its trend, and when inflation goes above its target, monetary policy tries to bring it down to its trend.

So usually, when this kind of thing happens, i.e., GDP goes above target or inflation goes above target, monetary policy raises the interest rates, and conversely, when it goes below, it reduces the rate. So, the increase in reduction of rates is probably with some kind of benchmark.

So there is a certain benchmark, where if inflation is at target and GDP is at trend, monetary policy has to neither restrict nor accommodate. At the current time, GDP is at its potential and on trend with the new number. But inflation is way above target; in fact, if we take the average for the year, it's 5.4%, and the target is 4%. So we have to withdraw accommodation further to bring back inflation from 5 and a half percent to 4 percent. That is ‘withdrawal of accommodation’," explained Patra.

08 Dec 2023, 02:13:51 PM IST

RBI MPC Meeting Live: We expect current tighten Banking System liquidity environment to continue, says Amit Somani

“In line with market expectation, RBI delivered status quo policy. Both Policy rate as well as Stance are left unchanged. With GDP Growth coming in better than expected, RBI reiterated its focus on inflation target of 4%. We expect current tighten Banking System liquidity environment to continue until forward inflation trajectory reaches target. Short-term rates likely to remain at current attractive levels and may tighten somewhat in near-term. Overall, RBI’s sharp focus on bringing down inflation is positive for debt markets in medium-to-long term," said Amit Somani, Senior Fund Manager-Fixed Income, Tata Asset Management.

08 Dec 2023, 01:54:22 PM IST

RBI MPC Meeting Live: Views on RBI Monetary Policy by Suresh Khatanhar, Deputy Managing Director, IDBI Bank

"The decision of the central bank to keep policy rates unchanged is in line with expectations. The Indian economy is showing resilience with GDP growth for Q2 having exceeded forecasts, which is a good sign of a sustainable growth momentum. As fundamentals of the economy remain strong with banks and corporates reporting healthier balance sheets and fiscal consolidation on course, the external balance with strong forex reserves provides a cushion against external shocks. 

 A broad-based easing in core inflation certainly points towards past monetary actions yielding desired results. Domestic economic activity is holding up well as assessed by the RBI and the MPC remains alert and prepared to undertake appropriate policy actions as warranted – this provides a good sense of linear growth across sectors for the remaining part of the financial year," said Suresh Khatanhar.

08 Dec 2023, 01:47:57 PM IST

RBI MPC Meeting Live: RBI to set up of Fintech Repository

Fintechs and financial institutions such as banks and NBFCs are collaborating more frequently in India. Establishing a Fintech Repository is suggested as a way to better understand developments in the Fintech ecosystem and to assist this industry. The Reserve Bank Innovation Hub plans to make this operational by April 2024, if not before. It is recommended that FinTechs voluntarily contribute pertinent data to this repository.

08 Dec 2023, 01:35:09 PM IST

RBI MPC Meeting Live: I don’t expect a rate cut on the RBI’s table any time soon, says V. P. Nandakumar - MD & CEO at Manappuram Finance

"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," explained Nandakumar.

08 Dec 2023, 01:23:11 PM IST

RBI MPC Meeting Live: Here's what analysts have to say on RBI policy's impact on the markets

According to Sonam Srivastava Founder and Fund Manager of Wright Research, the MPC's decision is likely to be well-received by the stock market, as the maintenance of the status quo on interest rates often provides a sense of stability and predictability to investors. 

Specifically, the banking sector may see a steady operational environment, which can be conducive for sustained lending and financial activities. Other sectors, especially those sensitive to interest rate changes like real estate, automobiles, and consumer durables, could also witness a positive impact as the current interest rate environment supports consumer spending and borrowing.

According to Sreeram Ramdas, Vice President, Green Portfolio PMS the stock market is likely to react positively to the RBI's recent announcements. The decision to maintain the policy repo rate and the continued focus on inflation targeting provides a stable environment for investors. This stability, combined with India's strong economic fundamentals and GDP growth, is likely to boost investor confidence.

The banking sector may benefit from the steady interest rate environment, as it aids in better margin management. Furthermore, sectors like healthcare and education might receive a positive impact from the enhanced UPI transaction limits, enabling more significant financial transactions in these areas. However, the emphasis on inflation control and potential supply-side shocks could mean cautious investment in sectors heavily reliant on raw material prices. Overall, the stock market is likely to experience a steady momentum, buoyed by a stable policy environment and strong economic indicators.

This is a very bullish indication of where the economy is headed, but not so much for the markets.

08 Dec 2023, 01:13:23 PM IST

RBI MPC Meeting Live: RBI's growth forecast to boost investor confidence, says 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," said Chopra. 

08 Dec 2023, 01:09:04 PM IST

RBI MPC Meeting Live: While headline inflation has moderated over the last quarter, it still remains above target, testifying to its stickiness, says Umesh Revankar

According to Umesh Revankar, Executive Vice Chairman, Shriram Finance, expectedly, the MPC has once again decided to retain policy rates at earlier levels and continued to withdraw accommodation.

"While geo-political hostility worldwide continues to be a challenge, the softening of crude prices is a happy omen. Despite global trade remaining subdued, India’s domestic economic activity has shown remarkable resilience, as evidenced by the 7.6% growth rate in GDP for Q2. The increase in Government’s investments spending, the revival in rural consumption and the strong growth in infrastructure and manufacturing sectors along with improved consumption numbers, are promising signs that we may be nearing the end of the inflationary tunnel. I believe a regime of reduced rates is just around the corner.

Some steps on the anvil as announced by the Governor, including a repository for Fintechs, and a regulatory framework for loan web aggregation and connected lending are progressive steps. It can dispel the dark clouds of suspicion hanging over digital lending in recent times. We see great promise for buoyant economic activity and consequently, growth in commercial and retail credit in the near future," explained Revankar.

08 Dec 2023, 12:53:46 PM IST

RBI MPC Meeting Live: Governor refrains from giving any forward guidance during the press conference 

The RBI Governor, Das, while addressing the media said that he does not provide any forward guidance because of the level of uncertainty that exists. He also stated in his final paragraph of the statement that the future appears to be very  fickle. 

"And I have also said that new shocks can hit any economy. It can come from anywhere and hit any economy at any time. So if that is the level of uncertainty, and if our inflation is still quite away from 4%, we just cannot give any follow-up guidance about whether we will tighten further, whether we will lose them, or what we will do; everything depends on the evolving situation. It is not possible in the current situation. For any one central bank to give their forward guidance, you would have seen that the level of forward guidance also given by many central banks internationally has sort of come down," added Das.

08 Dec 2023, 12:38:19 PM IST

RBI MPC Meeting Live: The MPC continues to stress the policy stance has to stay actively disinflationary, while supporting growth, says Madhavi Arora

"A benign global narrative, tighter system liquidity and easing core inflation despite stronger growth acted as comfortable backdrop of today’s MPC meeting. Fears of financial stability risks have taken a back seat amid swift change in global risk appetite and low volatility in FX. This also thus precludes the need to conduct OMO sales.

We have been insisting OMO sales was merely announced last time as a way to depict implied policy bias for higher rates and a way to offer higher risk premia to the world and to anchor INR – none of which turned out to be a worry and India-US 10Y spread has widened to ~300bps after having seen the decadal lows of ~240bps in mid-Oct ’23.

Meanwhile, the spread between avg weighted call money rate and repo rate has since widened as liquidity tightened further. We expect liquidity to stay comfortable and range-bound in the near term but to tighten by March.

The RBI’s FY25 GDP forecast for first three quarters looks healthy as well. On inflation, despite risks on account of patchy perishables, the MPC outlook is unchanged at 5.4% for FY24 (Emkay: 5.4%). Overall, the policy tone was comfortable, while MPC still insisting on keeping an eye on inflation and financial stability risk and active liquidity management.

We maintain the RBI will stay vigilant, and it is unlikely to precede the Fed in any policy reversal in CY24," said Madhavi Arora, Lead Economist, Emkay Global Financial Services.

08 Dec 2023, 12:22:29 PM IST

RBI MPC Meeting Live: Governor Shaktikanta Das outlines ten observations that sum up the current monetary policy in a press conference today

  • Das said that the 2020 to 2023 will perhaps go down in history as a period of great volatility.
  • Secondly, India's GDP growth remains resilient and robust as reflected in their projection of 7% growth for the current year.
  • Third, on the inflation front, the summer of 2022 is behind us. We have made significant progress in bringing down inflation, the steady decline in core inflation indicates that monetary policy is working, but don't rush into any conclusion.
  • The fourth point is moving forward, Inflation management cannot be on autopilot.
  • Fifth, the future path is expected to be clouded by uncertain food prices. CPI data for November is expected to be high five, the MPC will be highly alert to any signs of derailing of the ongoing disinflation process based on evolving situation, the MPC will take appropriate action to reach the 4% to reach the 4% target.
  • Sixth, liquidity will be actively managed consistent with monetary policy seven the balance sheet of the financial sector remains robust, sectoral and institution specific signs of stress are being proactively monitored and addressed. We do not wait for the House to catch fire and then act.
  • Prudence at all times is our guiding philosophy, said Das.
  • Current account deficit is expected to be modest and comfortably financed nine foreign exchange reserves at US dollar 640 billion provide a strong buffer against global spillovers.
  • Lastly, the stability of the Indian rupee reflects the improving macroeconomic fundamentals of the Indian economy and its resilience in the face of formidable global tsunamis.

08 Dec 2023, 12:07:01 PM IST

RBI MPC Meeting Live: Here's how the RBI MPC's announcement regarding UPI transactions will impact the healthcare 

“The announcement of the increased UPI payment limit is a welcome move, signalling a positive shift in the dynamics of financial transactions. This strategic decision holds the potential to bring about a transformative impact, especially in the context of healthcare. By starting with this elevated UPI payment limit, both patients and hospitals stand to benefit significantly, as it addresses existing challenges in a new era of seamless and efficient transactions. As per expectation, the UPI payment domain will boost in solving the frequent issues faced," said CA Jyoti Prakash Mahapatra, CFO, Ruby Hall Clinic. 

08 Dec 2023, 12:02:04 PM IST

RBI MPC Meeting Live: Although the policy stance was widely expected, the undertone remains precautionary over inflation risks, says Shishir Baijal 

"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," said Shishir Baijal, Chairman and Managing Director, Knight Frank India.

08 Dec 2023, 11:54:52 AM IST

RBI MPC Meeting Live: Details of next RBI MPC meet

As per Monetary Policy Statement, 2023-24 statement, the next meeting of the MPC is scheduled during February 6-8, 2024.

08 Dec 2023, 11:52:02 AM IST

RBI MPC Meeting Live: RBI policy statement presents a nuanced view of the global economic landscape, says Anirudh Garg, Founder, and Fund Manager at Invasset, PMS

"The recent RBI policy statement presents a nuanced view of the global economic landscape, acknowledging the ongoing uncertainties and volatility. India's economic resilience, highlighted by a robust GDP growth of 7.6%, showcases the strength of its fundamental economic structure. The maintenance of the policy repo rate at 6.5% reflects a balanced approach, aiming to align inflation with targeted figures while fostering economic growth.

 Inflation moderation to 4.9% is a testament to the efficacy of the current monetary policy. The RBI's continued focus on ensuring financial stability and introducing measures like the enhancement of UPI transaction limits, and the establishment of a cloud facility for the financial sector, indicates a forward-thinking approach. This policy stance, coupled with a cautious yet adaptive approach to the changing global scenario, positions India favorably in the face of global uncertainties," explained Garg. 

08 Dec 2023, 11:49:49 AM IST

RBI MPC Meeting Live: RBI raises UPI transaction limit for hospitals, educational institutions to ₹5 lakh

Governor Shaktikanta Das made two announcements related to the Unified Payments Interface (UPI) in India, one specific and one with broader ramifications for the online payments ecosystem.

The first announcement Das said is for "enhancing UPI transaction limit for specific categories" such as payments to hospitals and educational institutions from the current 1 lakh to 5 lakh.

Further, in the broader announcement, Das announced the enhancement of the limit in e-Mandates for recurring payments for specified categories.

Thus limits for e-Mandates for making payments of a recurring nature have been raised to 1 lakh for mutual fund subscriptions, insurance premium subscriptions, and credit card repayments.

Also Read: RBI MPC Meeting: UPI transaction limit for hospitals, educational institutions payments raised to 5 lakh

08 Dec 2023, 11:38:31 AM IST

RBI MPC Meeting Live: SDF and MSF allowed even on weekends, holidays

"With regard to the standing facilities of the Reserve Bank under the LAF, we have noticed simultaneous high utilisation of both MSF and SDF by the banks. This was pointed out in the last monetary policy statement. We propose to address this situation and have decided to allow reversal of liquidity facilities under both SDF and MSF even during weekends and holidays with effect from December 30, 2023.

It is expected that this measure will facilitate better fund management by the banks. This measure will be reviewed after six months or earlier, if needed," said Das during the announcement today. 

Also Read: RBI MPC Meeting: Repo rate unchanged at 6.5%, ‘withdrawal of accommodation’ stance

08 Dec 2023, 11:32:40 AM IST

RBI MPC Meeting Live: RBI Governor on Liquidity 

Das said that the net position under the liquidity adjustment facility (LAF), which measures system liquidity, entered deficit mode for the first time in September 2023 following a nearly four-and-a-half-year break since May 2019. Banks heavily used the marginal standing facility (MSF) as a result of persistently low liquidity conditions in October and November.

"The overall tightening of liquidity conditions is attributed mainly to higher currency leakage during the festive season, government cash balances and Reserve Bank’s market operations. Driven by these autonomous factors, system liquidity tightened significantly compared to what was envisaged in the October policy statement.

Consequently, the need to undertake auction of OMO sales has not arisen so far. The evolution of liquidity conditions has been in alignment with the monetary policy stance," added Das.

Also Read: RBI MPC Meeting: Repo rate unchanged; growth forecast raised; 7 key highlights of December policy meeting

08 Dec 2023, 11:24:18 AM IST

RBI MPC Meeting Live: Inflation forecast unchanged

Consumer Price Index (CPI) inflation is projected at 5.4% for 2023-24, with Q3 at 5.6% and Q4 at 5.2%. CPI inflation for Q1:2024-25 is projected at 5.2%; Q2 at 4.0%; and Q3 at 4.7%.

“We have made significant progress in bringing down inflation to below 5 percent in October 2023 despite occasional blips due to intermittent supply shocks. The summer of 2022 is behind us. Our policy of prioritising inflation over growth, hiking policy rate by 250 basis points in a calibrated manner and draining out excess liquidity have worked well, alongside supply-side measures taken by the government, to bring about this disinflation," said Das. 

Also Read: RBI MPC Meeting: FY24 inflation forecast remains unchanged at 5.4%

08 Dec 2023, 11:19:03 AM IST

RBI MPC Meeting Live: RBI Policy on Right Lines, says Manoranjan Sharma, Chief Economist at Infomerics Ratings.

According to Sharma, as repeatedly stressed by us both in the print and electronic media, e.g., on October 10, October 11, December 5, December 6 and 7, 2023, the RBI kept the benchmark Policy rates unchanged and also retained the stance of the Policy as “the withdrawal of accommodation" on the basis of a comprehensive assessment of the global and domestic environment.

This Policy is entirely in conformity with our pre-policy expectations.

In view of the evolving growth-inflation trade-off, the MPC took the right call in holding the rates steady.

08 Dec 2023, 11:12:09 AM IST

RBI MPC Meeting Live: GDP growth forecast 

The real GDP growth for 2023-24 is projected at 7% from 6.5% earlier.

Q3FY24 GDP growth forecast is projected at 6.5% against the estimate of 6% earlier.

Q4FY24 GDP growth forecast is projected at 6% against the earlier estimate of 5.7%.

Real GDP growth for Q1:2024-25 is projected at 6.7%; Q2 at 6.5%; and Q3 at 6.4%.

Also Read: RBI MPC Meeting: Repo rate unchanged; growth forecast raised; key highlights of December policy meeting

08 Dec 2023, 10:49:37 AM IST

RBI MPC Meeting Live: Current repo rate is the new normal, says Himanshu Panchmatiya - Cofounder - Switch My Loan

According to Panchmatiya, with a focus on inflation, liquidity & currency management, the repo rate is expected to remain 6.50% for next 6-9 months. The market has realised that the current repo rate is the new normal.

With no change in the repo rate, there will be no changes in floating-rate home loans and other advances which are linked to an external rate such as the repo rate. The affordable housing market has already taken some beating due to the prolonged higher repo rate.

RBI may still consider deploying different tools in sucking out liquidity from market in case the inflation further shoots up.

08 Dec 2023, 10:38:03 AM IST

RBI MPC Meeting Live: India is better placed to withstand the uncertainties compared to many other countries, says Das 

“We have now reached a stage when every action has to be thought through even more carefully to ensure overall macroeconomic and financial stability. more so because the conditions ahead could be fickle. We have to remain vigilant and ready to act as per the evolving outlook. India is better placed to withstand the uncertainties compared to many other countries," said Das. 

08 Dec 2023, 10:21:40 AM IST

RBI MPC Meeting Live: Shaktikanta Das on retail inflation

 Retail Inflation (CPI) forecast for FY24 was kept unchanged at 5.4%.

08 Dec 2023, 10:16:58 AM IST

RBI MPC Meeting Live: Shaktikanta Das on GDP 

Real GDP growth for FY24 is projected at 7% from 6.5%.  Real GDP for Q1FY25 is projected at 6.7%, for Q2FY25 at 6.5%, and for Q3FY25 at 6.4%

08 Dec 2023, 10:10:06 AM IST

RBI MPC Meeting Live: Shaktikanta Das on global economy 

The global economy remains fragile due to elevated debt levels, lingering geopolitical tensions and extreme weather conditions, says Das.

08 Dec 2023, 10:08:31 AM IST

RBI MPC Meeting Live: RBI maintains stance of ‘Withdrawal of Accommodation’

The MPC maintained the policy stance as 'withdrawal of accommodation' by 5 out of 6 majority.

08 Dec 2023, 10:04:47 AM IST

RBI MPC Meeting Live: Repo rate remains unchanged at 6.5%

Repo rate remains unchanged at 6.5%. 

08 Dec 2023, 10:04:19 AM IST

RBI MPC Meeting Live: Governor of RBI, Shaktikanta Das starts speaking

Long-awaited normality still eludes the global economy, says Das.

08 Dec 2023, 10:01:08 AM IST

RBI MPC Meeting Live: Watch RBI Governor Shaktikanta Das; policy statement here

Watch RBI Governor Shaktikanta Das' Monetary Policy speech here.

08 Dec 2023, 09:55:31 AM IST

RBI MPC Meeting Live: Market hits record high ahead of RBI MPC meeting 

According to Ruchit Jain, Lead Research Analyst at 5paisa, the index traded within a range in Thursday’s session but the broader market was no short of action. The stock specific movement was positive as the market breadth was in favor of advances. The RSI oscillator which is overbought on the hourly charts post the recent run up, has started cooling-off but the index has not breached its support. 

Also, FIIs have been buying in the index futures segment and their ‘Long Short Ratio’ has surpassed over 50 percent which is a positive sign. Thus, the overbought set ups could cool-off with some consolidation, but the uptrend still remains intact. Hence, traders should continue to trade with a positive bias until there are any signs of reversal. 

The immediate support for Nifty is placed around 20,800 followed by 20,650 while the possible target on the index as per the retracement is seen around 21,080.

08 Dec 2023, 09:52:30 AM IST

RBI MPC Meeting Live: Three-day RBI MPC Meeting details

The three-day meeting of the RBI's rate-setting panel started on Wednesday, December 6 and the outcome is due on today (Friday, December 8).

RBI Governor Shaktikanta Das will unveil the MPC decision around 10 am today.

After the MPC decision which starts around 10 am, RBI Governor Das will address a post-policy press conference at noon on December 8.

08 Dec 2023, 09:37:31 AM IST

RBI MPC Meeting Live: Is there going to be any hint of rate cuts? here's what analyst say 

According to Sharad Chandra, Director, Mehta Equities Ltd,  RBI monetary policy will maintain the repo rate. But the expectation of a cut will not be indicated. As the target inflation is still not under control. The risk weight for banks & NBFC for unsecured loans has already been hiked. But if the impact is not seen in books of the banks, there may be further indication of tightening. The sector that has to be watched closely is the real estate segment. RBI may indicate measures to tighten the funding to that segment.

08 Dec 2023, 09:26:49 AM IST

RBI MPC Meeting Live: Market opens with minor gains ahead of RBI MPC meeting 

Market opens with minor gains. The Sensex is nearly at the 69,700 level, and the Nifty 50 opens above 20,900.

08 Dec 2023, 09:06:40 AM IST

RBI MPC Meeting Live: What do analysts say about inflation? 

According to Sheersham Gupta, Director and Senior Technical Analyst at Rupeezy, the RBI would be meeting for the last time in 2023 for the monetary policy discussions. The October retail inflation was 4.87%, well within the RBI’s comfort range of 4 (+/-2)%, and the GDP numbers were better than expected. Spread of lending rates and repo rate have also been narrowing down in the past couple of months, indicating a more direct transmission of monetary policy

Given the sound macroeconomic indicators and keeping in mind that 2024 is an election year, the RBI should persist with the rate hike pause for the fifth consecutive time. The central bank is also expected to revise its annual growth forecasts modestly.

“However, 2023 being a monsoon-deficient year, the economy will see supply-side headwinds resulting in food inflation. The RBI may use other monetary policy instruments, like the hike of risk weight for credit, to keep inflation within the limits," said Gupta. 

08 Dec 2023, 08:50:09 AM IST

RBI MPC Meeting Live: RBI is poised to maintain its hawkish stance, says Shishir Baijal, Chairman and Managing Director, Knight Frank India

According to Baijal, the 7.6% GDP growth has surpassed the RBI's expectations in Q2 FY24, complemented by consumer inflation comfortably within the RBI's zone of comfort. With these favourable economic indicators, the likelihood of a rate hike in the upcoming MPC is minimal. Despite potential challenges such as a possible uptick in food inflation and a volatile external environment, the RBI is poised to maintain its hawkish stance, keeping the repo rate steady at 6.5% for the fifth consecutive time this year.

"The real estate sector's demand is intricately linked to economic conditions and prevailing mortgage rates. A positive economic outlook and stable interest rates create a conducive environment for sustaining home purchases. Notably, in the affordable segment, where demand momentum has trailed the overall residential market, interest rate movements play a pivotal role. Ensuring stable interest rates becomes imperative in this vulnerable segment, serving as a crucial catalyst to address the housing gap and propel the real estate market forward," added Shishir.


08 Dec 2023, 08:25:38 AM IST

RBI MPC Meeting Live: Here's where experts think the RBI would focus on 

According to CARE Ratings, the RBI to focus on liquidity management and personal credit growth. While an overall tight liquidity situation is anticipated, the RBI aims to ensure that it does not unduly impede credit growth.

The RBI is likely to continue supporting economic growth, while remaining cautious on inflation. Therefore, we anticipate that the RBI will keep its policy rates and stance unchanged. We do not anticipate any further rate hikes by the RBI in this fiscal year.

08 Dec 2023, 08:03:42 AM IST

RBI MPC Meeting Live: Inflation concerns 

According to Sujan Hajra, Chief Economist & Executive Director, Anand Rathi Shares and Stock Brokers, as inflation is still a concern and growth strong, the RBI will pause, letting rate hikes work their way through the system. 

“With liquidity in deficit, there is no need for OMO (open market operations) sales although the RBI would rely on active liquidity management. We will be watching out for the RBI Governor’s commentary on adjusted risk weights and retail credit portfolio. While we expect no change in the liquidity stance, the commentary is likely to be neutral," said Hajra. 

08 Dec 2023, 07:31:00 AM IST

RBI MPC Meeting Live: Here's what expert says on GDP growth 

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services pointed out that the RBI MPC will be meeting this week under very favourable conditions. CPI inflation has come down from 5.02 per cent in September to 4.87 per cent in October. Q2 GDP growth at 7.6 per cent has surprised on the upside.

Vijayakumar believes RBI is likely to revise the FY24 GDP growth to 6.7 per cent from 6.5 per cent earlier.

Moreover, as the growth momentum in the economy is strong, a monetary stimulus through a rate cut is not needed now. So, the ideal response of the MPC would be a pause both in rates and stance, Vijayakumar said.

08 Dec 2023, 07:16:37 AM IST

RBI MPC Meeting Live: Shanti Ekambaram, whole-time director at Kotak Mahindra Bank comments ahead of policy decision at 10 am

The Reserve Bank of India is likely to hold the key interest rates in its December monetary policy review and continue with its emphasis on containing inflation, which has shown encouraging trends over the past two months. Macroeconomic indicators remain healthy, with GDP growing at 7.6 per cent in Q2, exceeding expectations.

With economic growth continuing to be strong, the central bank will focus mainly on inflation, liquidity, and currency management. Given the global economic trends and geopolitical situation, expect RBI to keep its key rates and stance unchanged.

08 Dec 2023, 06:58:16 AM IST

RBI policy announcement at 10 am: Here's what Rahul Bajoria, MD & Head of EM Asia (ex-China) Economics, Barclays says

With strong growth momentum, core inflation declining, and the global backdrop turning more benign, the RBI's policy optionality is widening. Still, we expect the bank to stay cautious, taking macroprudential steps to curb lending, while keeping an eye on supply shocks and potential second-order inflationary effects.

In its 8 December meeting, we expect the MPC to remain on a cautious hold and keep the repo rate unchanged at 6.5 per cent. The central bank may flag risks to inflation from a potential recurrence of food price shocks and its impact on inflation expectations, even as it draws comfort from the moderation in core inflation.

The MPC is likely to flag a moderation in the pace of monetary transmission, as spreads of lending rates over the repo rate have narrowed in the past few months. Accordingly, we expect the committee to maintain the monetary policy stance pointed towards a "withdrawal of accommodation" despite deficit liquidity conditions.

We think the RBI may raise its annual growth forecast modestly, but is likely to keep its inflation forecasts unchanged, citing uncertainty around the near-term outlook due to possible changes in domestic food and international energy prices.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

08 Dec 2023, 06:44:01 AM IST

RBI governor Shaktikanta Das will announce the monetary policy decision at 10 am. The monetary policy committee is widely expected to hold the rates steady after deliberations during December 6-8 meeting.

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