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Business News/ Economy / RBI MPC 2024: Global trade momentum weak, disruption in Red Sea impart uncertainty, says RBI Governor Shaktikanta Das
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RBI MPC 2024: Global trade momentum weak, disruption in Red Sea impart uncertainty, says RBI Governor Shaktikanta Das

RBI MPC 2024: Global growth to remain steady in 2024, with heterogeneity across regions, says RBI Governor Shaktikanta Das.

RBI MPC 2024: Shaktikanta Das, governor of the Reserve Bank of India (RBI) said that the Global growth will remain steady (Bloomberg)Premium
RBI MPC 2024: Shaktikanta Das, governor of the Reserve Bank of India (RBI) said that the Global growth will remain steady (Bloomberg)

RBI MPC 2024: Global growth is expected to remain steady in 2024 with heterogeneity across regions, said Shaktikanta Das, during the Monetary Policy Committee meeting announcements on Thursday, February 8. Though global trade momentum remains weak, it is exhibiting signs of recovery and is likely to grow faster in 2024.

“Ongoing wars and conflicts and the emergence of new flashpoints in different parts of the world with the disruption in the Red Sea being the latest in the series impart uncertainty to the global macroeconomic outlook, the RBI governor said.

Inflation is edging down from multi-decade highs, with intermittent upticks. Financial market sentiments have been fluctuating with changing views about an early pivot by central banks in advanced economies (AEs). The likelihood of lower interest rates has spurred rallies in equity markets, although uncertainty about the timing of interest rate reduction is reflected in bidirectional movements in the US dollar and sovereign bond yields. Emerging market economies (EMEs) are facing currency fluctuations amidst volatile capital flows, according to the RBI MPC minutes announcement.

Public debt in developed economies is much higher than in emerging economies, said the RBI Governor. India's debts are expected to moderate in the years to come.

Also Read | RBI MPC Meeting 2024 Live Updates: RBI MPC keeps repo rate changed at 6.5%

The Reserve Bank of India's Monetary Policy Committee maintained thestatus quo for the policy repo rate at 6.5 per cent. With a majority vote of 5:1, the six-member committee chose to keep the repo rate unchanged in its final meeting of FY24, citing persistent retail inflation above the 4 per cent target. This marks the sixth consecutive meeting where the MPC has upheld the status quo on the repo rate, which serves as the interest rate for banks to borrow funds from the RBI to address short-term liquidity imbalances.

Also Read | RBI Monetary policy: MPC keeps FY24 inflation forecast unchanged at 5.4%

The latest projection for the real GDP in Q1 of 2024-25 stands at 7.1 per cent, up from the previous estimate of 6.7 per cent announced in December. Governor Das mentioned that the projected real GDP growth for Q2 of 2024-25 is 6.8 per cent, Q3 at 7 per cent, and Q4 at 6.9 per cent. These figures represent an increase from the previous projections of 6.5 per cent for Q2 and 6.4 per cent for Q3.

Also Read | RBI keeps repo rate unchanged. What does that mean for your home loan EMI

India's potential growth is propelled by structural drivers. Growth is accelerating and outpacing most analysts' forecasts, the RBI governor added.

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Published: 08 Feb 2024, 11:00 AM IST
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