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Business News/ Economy / RBI MPC Meeting 2024 Highlights: RBI keeps repo rates unchanged, experts say ‘decision to ensure sustainable growth’
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RBI MPC Meeting 2024 Highlights: RBI keeps repo rates unchanged, experts say ‘decision to ensure sustainable growth’

RBI MPC Meeting 2024 Highlights: The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) kept repo rates unchanged at 6.5% and is focused on the withdrawal of accommodation, Governor Shaktikanta Das said. It projects real GDP growth of 7 percent for FY'25 with risks evenly balanced.

RBI MPC Meeting 2024 Highlights: Reserve Bank of India Governor Shaktikanta Das announced policy decision to keep repo rates unchanged at 6.5% (Bloomberg)Premium
RBI MPC Meeting 2024 Highlights: Reserve Bank of India Governor Shaktikanta Das announced policy decision to keep repo rates unchanged at 6.5% (Bloomberg)

RBI MPC Meeting 2024 Highlights:  The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) has kept repo rates unchanged at 6.5 percent. It has also decided to remain focused on the withdrawal of the accommodative stance, Governor Shaktikanta Das said. This is the sixth consecutive unchanged decision and comes after the Interim Budget was announced on February 1, 2024.

 

RBI Monetary policy — Key highlights

– RBI keeps the repo rate steady at 6.5% with five out of six members voting in favour of the rate decision Experts were also expecting the repo rate to remain steady at 6.5 percent

– MPC also decided by a majority (5 out of 6 members) to remain focused on the withdrawal of accommodation to ensure the inflation progressively aligns with the target while supporting growth. Monetary policy must continue to be actively disinflationary, RBI Governor Shaktikanta Das said in his statement.

– The Reserve Bank of India (RBI) has maintained its inflation projection at 5.4% for 2023–2024.

– CPI inflation is predicted to be 4.5% for the upcoming fiscal year 2024–2025, with Q1 at 5%, Q2 at 4%, Q3 at 4.6%, and Q4 at 4.7%.

 

The RBI MPC commenced its first meeting of the year on February 6, 2024. Chaired by RBI Governor Shaktikanta Das, the six-member MPC concluded discussions today, February 8, 2024, with Governor Das revealing the committee's decision at 10 am. The 10 am announcement will be followed by a post-policy press conference at noon today, live-streamed on the RBI's YouTube channel or the official X platform (formerly Twitter).

During the last MPC, for the fifth consecutive time, the RBI maintained the repo rate at 6.5 percent. The last adjustment occurred in February 2023, increasing the rate from 6.25 percent. 

08 Feb 2024, 08:24:35 PM IST

RBI MPC Meeting 2024 Live: With RBI's mandatory KFS, multiple hidden costs will be brought to light, says Veefin Solutions MD

RBI MPC Meeting 2024 Live: “We welcome the RBI’s decision to mandate Key Fact Statements (KFS) for all MSME loans. Initially this lack of transparency often led to financial stress and hindered informed decision-making for MSMEs. For example, oftentimes MSMEs have been unaware of charges like foreclosure fees, which can be substantial and significantly impact their bottom line. With KFS, such hidden costs will be brought to light, enabling businesses to make informed decisions and plan their finances accordingly. By requiring lenders to disclose all charges upfront in a standardized format, MSMEs may finally understand the full all-inclusive cost of their loans. This also empowers them to compare offers effectively, negotiate better, and prevent unfavorable circumstances in the future," said Raja Debnath, Managing Director, Veefin Solutions Ltd.

08 Feb 2024, 07:33:39 PM IST

RBI MPC Meeting 2024 Live: RBI's extension of KFS requirement will help MSMEs in dealing with opeaque nature of loan agreements, says M1xchange Director

RBI MPC Meeting 2024 Live: “The announcement by the Reserve Bank of India (RBI) extending the Key Fact Statement (KFS) requirement to cover all retail and MSME loans will spearhead enhanced transparency in lending practices. The opaque nature of loan agreements, laden with hidden charges has been a challenge faced by MSMEs when seeking financial support from traditional sources," said Sundeep Mohindru, Promoter & Director, M1xchange. 

08 Feb 2024, 07:29:12 PM IST

RBI MPC Meeting 2024 Live: We laud the RBI's continuous focus on boosting digital trust, says Signzy CEO

RBI MPC Meeting 2024 Live: Applauding the RBI's continuous focus on enhancing digital trust by implementing principle-based framework for authentication for digital payments security, CEO and Co-founder at Signzy, Ankit Ratan said, “ The rising financial cyber crimes are eroding the digital trust within the ecosystem, with approximately 1.1 million cases of such frauds had been registered in 2023 that involves an amount of 7,488.6 crore."

“By adopting a principle-based framework for authentication, businesses not only curb the financial frauds but will also be able to provide a secure environment for its customers and protect their data. The RBI also emphasised on streamline the process of on-boarding of Aadhaar Enabled Payment System (AePS) service providers and introduce additional fraud risk management measures. We believe that compliance transcends mere checkbox exercises; it serves as a critical tool in ensuring the safety of customer data and protecting the reputation of businesses," Ratan added.

08 Feb 2024, 07:03:01 PM IST

RBI MPC Meeting 2024 Live: RBI's announcement on KFS requirement for retai and MSME will foster transparency, says Jocata CEO

RBI MPC Meeting 2024 Live: Hailing the Reserve Bank of India's key announcement on Key Fact Statement (KFS) requirements for retail and MSME loans, Prashant Muddu, Managing Director & CEO, Jocata said the move will bring transparency within the credit system.

"The Reserve Bank of India's (RBI) announcement on Key Fact Statement (KFS) requirements for retail and MSME loans will foster more transparency within the credit ecosystem. This will bring clarity among borrowers about the terms of loan agreement including the complete cost of the loan such as loan rate of interest and other associated costs such as the processing fees, legal charges etc. Going forward, the industry will see further tightening of the regulatory environment and more policy push for banks, NBFCs, and FinTechs towards priority sector lending," said Prashant Muddu.

08 Feb 2024, 06:03:02 PM IST

RBI MPC Meeting 2024 Live: RBI rate pause highlights its vigilance in ensuring long-term financial stability, says Hedonova CIO

RBI MPC Meeting 2024 Live: “The Reserve Bank of India's decision to maintain the repo rate at 6.5 percent, as announced by Governor Shaktikanta Das, reflects a cautious yet steady approach towards India's economic management. This sixth consecutive hold, following the Interim Budget announcement, underscores the MPC's commitment to carefully navigating the balance between fostering economic growth and containing inflationary pressures. The continuation of the withdrawal from the accommodative stance highlights the RBI's vigilance in ensuring long-term financial stability," said Suman Bannerjee, CIO, Hedonova.

08 Feb 2024, 05:20:04 PM IST

RBI MPC Meeting 2024 Live: RBI remains a bit conservative while trying to balance inflation, says TRUS Mutual FUnd CIO

RBI MPC Meeting 2024 Live: "The Monetary Policy Committee (MPC) convened against a backdrop of softening headline inflation, stable core inflation, and a budget that is both fiscally prudent and non-inflationary. On the global front, recent data points to continued robustness of growth against general expectations of a slowdown. The US Fed removed the tightening bias from its statement leading to a question of when the rate cut cycle begin. Geopolitical unrest in the middle east and Red Sea region continue to possess key risks to fledgling global recovery.

Indian MPC thus maintained a status quo on rates as well as its stance (withdrawal of accommodation) as it believes the transmission of past rate hikes remains incomplete and the 4% CPI target may still be a bit distant. The MPC has projected FY25 GDP at 7.00% (FY 24 7.3%) and CPI at 4.5% (FY24 5.4%) reflecting a strong economic growth with easing inflation trajectory. The risks to these come from volatile food prices and potential supply side shocks from global factors. Overall the RBI remains a bit conservative while trying to balance the growth-inflation balances," said Mihir Vora, CIO, TRUST Mutual Fund.

08 Feb 2024, 04:55:11 PM IST

RBI MPC Meeting 2024 Live:  RBI decision to have a key fact statement related to retail and MSME advances will empower customers, says SBI Chairman

RBI MPC Meeting 2024 Live: “The MPC decision to hold rates and stance was expected but the set of regulatory decisions holds out a pragmatic and steadfast approach in the quest for digital robustness, customer centricity and price discovery. The decision to have a key fact statement regarding retail and MSME advances will empower customers to make informed decisions. Enhancing the robustness of AePS, authentication of digital transactions through new mechanisms and operational changes in CBDC are all important milestones of systemic resilience and a better future," said Chairman of SBI Dinesh Khara.

08 Feb 2024, 03:57:49 PM IST

RBI MPC Meeting 2024 Live: RBI MPC was dovish in its stance, says PGIM India MF's Puneet Pal

RBI MPC Meeting 2024 Live:  “The MPC meeting today maintained the status quo on policy rates and the monetary policy stance. Some sections of the market were expecting a change in stance which did not materialize though, in our view, the policy was dovish as Prof Jayant Varma voted for a rate cut and with the governor highlighting the underlying financial stability and FY25 Inflation forecast at 4.50% which is 200 bps below the policy repo rate. We think the monetary policy stance will be changed in the next MPC Policy in April 2024," said Puneet Pal, Head- Fixed Income, PGIM India Mutual Fund.

08 Feb 2024, 03:33:52 PM IST

RBI MPC Meeting 2024 Live: As inflation nears RBI's 4 per cent goal, there is room for monetary easing in coming quarters, AU Small Finance Bank

RBI MPC Meeting 2024 Live: "RBI’s policy was on expected lines with focus on bringing inflation towards targeted range of 4 per cent. Monetary policy stance and steady rates over last one year have helped maintain healthy growth momentum while lowering inflationary pressures. Going forward we believe as inflation nears RBI’s 4 per cent goal, space for monetary easing would open up in the coming quarters, to support lower interest rates and credit demand," said Uttam Tibrewal, Executive Director, AU Small Finance Bank.

08 Feb 2024, 03:19:23 PM IST

RBI MPC Meeting 2024 Live: RBI still concerned with the elevated food inflation, uncertainties about fuel inflation, says Resurgent India MD

RBI MPC Meeting 2024 Live:  "On expected lines, The RBI has maintained the status quo without any change in the repo rate. Given the lower government fiscal deficit as announced in the interim budget, a change in the stance to neutral was expected but RBI has chosen to be cautious and even the stance has not been changed. This indicates that RBI is still concerned with the elevated food inflation, uncertainties about fuel inflation and the supply side constraints due to the current geo-political situation. The reduction if any in the repo rate is therefore likely to be postponed to the later half of the next financial year specially because the overall headline inflation is now projected at 4.5 %for the full next financial year.

The GDP growth rate now projected at 7% for the next financial year augurs well for the economy based on better Rabi crop and demand lead growth duly backed by FDI and PLI policies. To support the same in the growth inflation trade a dovish stance is however expected soon, once the transmission of the previous repo rates increase is complete.

On the liquidity front, the assurance of RBI to be quick and flexible in providing the requisite amount in the system is a positive sign taking into the pick-up seen in credit growth in the last quarter and the extra need for currency in circulation during elections.

The RBI governor has also underlined the need to focus on customer requirements both from a regulatory angle as also by use of technology and innovation including digital currency.

Overall a pragmatic approach seen in policy with an aim to ensure long term sustainable development while controlling the inflation in the current scenario," said MD at Resurgent India Jyoti Prakash Gadia.

08 Feb 2024, 02:45:17 PM IST

RBI MPC Meeting 2024 Live: RBI likely to begin rate cuts in the second half of CY 24, says Millwood Kane International CEO

Founder and CEO of Millwood Kane International, Nish Bhatt expressed that RBI is likely to begin rate cuts in the second half of CY 24.

“The Reserve Bank of India (RBI) retained the key lending rate, repo, at 6.5% marking it the sixth consecutive policy review of no rate action. There was no change in stance of ‘withdrawal of accommodation’, indicating that the RBI is not yet ready to lower the guard against the retail inflation till it aligns with the committed target of 4 percent in a timely and sustainable manner. The CPI for FY24 is projected at 5.4%, while its likely to be at 4.5% in FY25. While, RBI has pegged real GDP growth for FY25 at 7%.

As the expectation is that headline inflation will moderate in the coming months, and there are concerns around continued high systemic liquidity deficit, while money markets continue to remain elevated and moderation happening in global inflationary pressure from last year’s high, we may likely see some rate cuts actions by RBI in the latter half of CY24," said Nish Bhatt.

08 Feb 2024, 02:11:11 PM IST

RBI MPC Meeting 2024 Live: Reactions - George Alexander Muthoot, MD, Muthoot Finance

"We appreciate the RBI’s prudent decision to keep the repo rate unchanged at 6.5% and maintain their stance on ‘withdrawal of accommodation’ to align with the evolving growth-inflation dynamics and remaining focussed on ensuring sustainable growth for the Indian economy. This may keep interest rates slightly elevated in the economy and on credit to small businesses. We remain optimistic on gold loan demand, credit demand from MSMEs, Microloans and demand for housing loans, given India’s resilient domestic economy, government thrust on capex, strong urban consumption and pick up in rural demand.

The RBI has further announced an important measure to ensure greater transparency for retail and MSME borrowers. The regulated entities are required to share a detailed document called Key Fact Statement (KFS), listing all the key information regarding a loan agreement. As an NBFC adhering to compliance, corporate governance and taking proactive measures to safeguard the interest of our customers is of prime importance to us, and we welcome this move as it will encourage and enable the borrowers to make informed decisions."

08 Feb 2024, 02:01:44 PM IST

RBI MPC Meeting 2024 Live: Reactions - Akhil Chaturvedi, Chief Business Officer, Motilal Oswal Asset Management Company

"Despite slight volatility in January, the market closed flat on a month-to-month basis. Equity schemes experienced a surge in inflows, reaching approximately 21,780 crores in Jan’24, compared to 16,997 crores in Dec’23. Sectoral/thematic and small-cap oriented funds were the primary contributors, with contributions of 4,804 crores and 3,256 crores, respectively. However, this was lower than the previous month's flows. Multi-cap category funds also witnessed a significant increase, reaching 3,038 crores in Jan’24 from approximately 1,852 crores in Dec’23. Large caps demonstrated positive contributions this month, reversing the net outflows experienced in December 2023. This shift in trend is in line with valuation differentials among large v/s mid and small caps, suggesting that large caps/flexi caps oriented schemes may attract higher flows in the future. In the Hybrid category, MAF observed notable inflows of 7,079 crores, a significant increase from 2,420 crores in the previous month.

Overall, investor sentiment remained bullish, supported by the market's persistent strength. Market and investor sentiment leading up to the general elections year remain positive."

08 Feb 2024, 01:52:54 PM IST

RBI MPC Meeting 2024 Live: Murthy Nagarajan, Head-fixed income, Tata Asset Management

"RBI in its monetary policy has kept the CPI Inflation target for next year at 4.5%. The potential GDP growth seems to be above 7% as RBI has projected growth of 7% even when global growth is slowing. As capex increases in the economy, we feel we may have a potential growth rate of 8% with CPI inflation around 4%. The government along with RBI is working together to have high growth and low inflation in the coming decades, which auger well for our economy. On the liquidity front, they have stated they will be doing a two-way operation to keep liquidity in balance, they are aiming for overnight rates to trade around policy rates of 6.5% as the RBI stance continues to be the withdrawal of accommodation. Given the geo-political uncertainty, RBI does not want to lower its cautious stance and put the Target of CPI inflation of 4 percent at risk.

The debt market has reacted slightly negatively due to no statement of easing liquidity, but the long-term positive lies in their commitment to bring CPI inflation to a 4% level. We should see 10-year yields going down to 7% in the coming days as monthly CPI inflation cools down below 5% in following months."

08 Feb 2024, 01:43:43 PM IST

RBI MPC Meeting 2024 Live: Reactions - Sujan Hajra, Chief Economist & Executive Director, Anand Rathi Shares and Stock Brokers

"Quick take: RBI keeps rates unchanged at 6.5% along with the withdrawal of accommodation. Unlike market expectations, RBI's tone was not dovish. Das was clear that tail risks have the possibility of undoing the work on disinflation. With RBI's inflation projection of 4.5% for FY25, any expectations of cuts coming in the current year become unlikely. We think the progress in food prices will be the key monitorable for RBI's tone in the upcoming policy. Like other central banks, higher growth for the current and next year gives RBI more headroom to be on a wait-and-watch mode.

- RBI kept repo rates unchanged at 6.5% sighting above 4% inflation along with incomplete transmission of rate hikes in credit markets as key reasons.

- On the inflation front, while Das highlighted comfort in the progress in rabi sowing, tail risks emerging from Red Sea skirmishes having an impact on commodity prices and the possibility of weather-related disruptions would be important to watch for.

- RBI re-affirms India's growth outlook projecting FY25 growth at 7%. For the current year, the domestic economy is maintaining its growth momentum driven by strong investment from the public sector along with an upturn in the private capex cycle. Agriculture too is maintaining its growth momentum on account of strong rabi sowing.

- Withdrawal of accommodation on the liquidity front as the transmission of rates to credit markets was incomplete. Further, acknowledging durable liquidity remained positive on account of government cash balances, RBI would remain nimble with its operations relying on VRR & VRRR for fine-tuning operations."

08 Feb 2024, 01:27:55 PM IST

RBI MPC Meeting 2024 Live: Reactions - Raghvendra Nath, MD, Ladderup Wealth Management

"The outcome of the three-day Monetary Policy Committee meeting aligns with our expectations, as the repo rate remains unchanged at 6.5% and a continued effort towards reducing money supply in the economy is maintained. The cumulative effect of policy repo rate increases is still working its way through the economy through a gradual decline in inflation numbers, but geopolitical events and their impact on supply chains and commodity prices are key sources of upside risks to inflation. Although no specific timeline has been indicated for reducing repo rates, it is anticipated that the Reserve Bank of India will initiate this process only after observing a similar move by the United States, aiming to mitigate the risk of capital outflows from India."

08 Feb 2024, 01:18:50 PM IST

RBI MPC Meeting 2024 Live: Reactions - Shishir Baijal, Chairman and Managing Director, Knight Frank India

“The central bank’s decision to maintain a pause in policy repo rate is in line with our expectation, and we consider this a comforting signal for the industry. Even though the inflationary pressures in most consumption categories have ebbed, food inflation continues to remain volatile. The RBI continues to remain watchful of inflationary expectations and liquidity conditions, which are currently in deficit, and it may continue to further tighten the liquidity condition to rein in inflation. The fiscal consolidation plan outlined in the interim budget announcement, aiming to gradually reduce fiscal deficit to 4.5% over the next two years, also provides a buffer against potential inflationary pressure. All these measures have the potential to bring down inflation to the 4% target of the RBI which will be comforting for the central bank to gradually pivot with a rate cut. In the case of the country’s housing market, even as the mid and premium segment continue their growth trajectory, the lower segment has witnessed pressure from elevated interest rates and higher property prices. We believe that lower home loan interest rates in the near future will serve as a big boost to homebuyer sentiment and enable better affordability, which is an extremely sensitive factor in this segment of the housing market."

08 Feb 2024, 01:14:00 PM IST

RBI MPC Meeting 2024 Live: Reactions - Nikhil Gupta, Chief Economist, MOFSL Group

"The RBI has kept monetary policy unchanged, as broadly expected, with no change in interest rates or policy stance (Both with 5-1 voting.) Further, the Governor again emphasized the importance of achieving a 4% inflation target.

The Bank forecasts real GDP growth at 7% in FY25, with inflation at 4.5% vs. 7% and 5.4%, respectively in FY24. (FY25 growth forecast has been revised up, keeping inflation broadly unchanged.)

Overall, there were no major announcements, hinting at an imminent easing. The RBI has been managing daily liquidity with overnight infusion, as and when required. We don't see easy monetary policy anytime soon, especially with such strong growth."

08 Feb 2024, 12:56:38 PM IST

RBI MPC Meeting 2024 Live: Reactions - Ranen Banerjee, Partner and Leader Economic Advisory, PwC India on MPC Meeting

"The MPC decision to keep the policy rate unchanged was expected. The stance is also kept at the withdrawal of accommodation possibly is a surprise. This possibly is explained by the fiscal consolidation with the Government projecting a lower deficit than target in FY24 and an aggressive 5.1% deficit target for FY25. The lower government borrowings and higher international money allocations to Indian bonds owing to the inclusion of India in the JP Morgan Emerging Markets bond index will keep a downward bias on the yields. The growth momentum is also holding up and inflationary risks are still on the horizon. The MPC therefore has decided to conserve its rate and stance gunpowder at this stage."

08 Feb 2024, 12:46:29 PM IST

RBI MPC Meeting 2024 Live: RBI’s restrictions on Paytm Payments Bank due to persistent non-compliance: Dy Governor

The Reserve Bank of India’s (RBI) restrictions on Paytm Payments Bank’s business were a result of persistent non-compliance with the regulatory norms, said the deputy governor of the central bank.

In a post-policy press briefing, RBI Deputy Governor Swaminathan J said that the central bank will take suitable steps as warranted going ahead.

On his part, RBI Governor Shaktikanta Das said the move was a "supervisory action on a regulatory entity for persistent non-compliance and comes after long-term dialogue. It is incumbent upon us to protect the consumer and financial system."

Das added that "emphasis is on bilateral engagement with regulated entities, and restrictions are proportionate to the gravity of the situation. All actions are in the best interest of systemic stability and customers/depositors interest."

Das added that an FAQ will be issued sometime next week, addressing all queries. He also stressed that RBI is and will continue to encourage innovation and tech in the financial sector.

08 Feb 2024, 12:42:02 PM IST

RBI MPC Meeting 2024 Live: Governor Shaktikanta Das highlights nine points in the press conference

First, domestic economic activity continues to be strong. We expect the real GDP to grow by 7% in the next financial year 2024-2025.

Second point, CPI inflation inflation is moderating with intermittent interruptions and spikes. We have to remain vigilant about the incoming data and the outlook. Our endeavour to achieve 4% inflation on a durable basis has to continue.

Globally, markets are front-running central banks in anticipation of policy waivers, but central banks remain apprehensive and await or more durable alignment of inflation with the targets for liquidity will be actively managed by the Reserve Bank.

Five, our multi-pronged proactive and calibrated policies have worked well to maintain and strengthen macroeconomic and financial stability. Six systemic, sectoral and institution-specific signs of stress are being proactively monitored and acted upon wherever necessary.

Seven let me reiterate that good governance robust risk management, sound compliance culture and prediction of consumer customers' interest are the hallmarks of the Reserve Bank's approach to the safety and stability of the financial system and individual financial institutions. the regulated entities must accord the highest priority to these aspects.

The eighth point is the external sector of the economy remains resilient. The current account deficit is expected to be eminently manageable. Nine, the exchange rate of the Indian rupee has remained stable.

08 Feb 2024, 12:31:22 PM IST

RBI MPC Meeting 2024 Live: Reactions - Dr Niranjan Hiranandani, MD, Hiranandani Group

"The status quo in repo rate by RBI is governed by a mix of global and domestic factors reflecting better anchoring of inflation and nimble liquidity management. With an outpaced GDP growth and a downward inflation curve trajectory, India's economic performance is noteworthy despite geo-economic shocks. Development of infrastructure, increased labour employment, enhanced fiscal expenditures, improved governance, and regulations along with structural policy reforms reflect the RBI's multifaceted approach to strengthening India’s financial stability. RBI indicates emphasises the need to consider macro-economic broad risk factors while keeping customer-centricity in mind while deploying effective monetary policy. Hence, retaining an accommodation stance even under the benign geo-political mood is a step in the right direction."

Further expressing his views on the real estate industry, he stated “The uptick in new project launches, fresh supply of housing units, soaring sales in luxury housing, record high property registrations, and an average price appreciation of 7% demonstrates the strong real estate market performance index in the backdrop of a conducive market scenario. An increase in government capital expenditures towards building physical infrastructure and fuelling liquidity management will continue to boost construction activities. This will increase employment, growth in GDP, housing demand, and economic stimulation. Industry highly recommends differential policy treatment to combat negative growth in the affordable housing segment. A calibrated approach including fiscal intervention, tax exemption or cross-subsidization is necessary to restore growth in affordable housing".

08 Feb 2024, 12:22:40 PM IST

RBI MPC Meeting 2024 Live: Reactions - Anil Rego, Founder and Fund Manager at Right Horizons

"In December 2023, the annual retail price inflation in India increased to 5.7%, as opposed to the 4.9% recorded in October. Headline inflation is still impacted by food price uncertainty. The MPC is still committed to keeping inflation within the 4 percent target range.

The Gross Domestic Product (GDP) increased by 7.3%, marking the third successive year in a row. The Monetary Policy Committee has maintained the status quo on the repo rate as inflation moderates in a resilient growing economy.

Since inflation is moderating, economic activity is steady and oil prices are lower and India is poised to be the growth engine for the global economy the markets were expecting the repo rate to be unchanged at 6.5%. We believe markets in the near term will now be driven by upcoming earnings season and 2024 elections.

Markets have touched new highs, especially with earnings for the Q3FY24 coming healthy supporting the trajectory. Investors are bullish as they are favouring rate cuts in 2024 which will unanimously boost the equity markets. The banking sector is the most sensitive to changes in rate cycles and has been a major reason for incremental earnings in FY23 and in H1 of FY24 benefitting from the hikes and credit growth being robust and persistent. Prolonged rate cuts will eventually lead to narrowing NIM but we expect rate cuts to begin in the last quarter and hence the trend in the banking sector is likely to continue in FY24. NBFCs will be best positioned to benefit from cuts in rates as credit growth will improve followed by banks. Also, credit-sensitive sectors like auto and real estate will see higher demand."

08 Feb 2024, 12:10:04 PM IST

RBI MPC Meeting 2024 Live: Reactions - Divam Sharma, Founder and Fund Manager at Green Portfolio

"As we had expected, the central bank has kept the repo rate unchanged maintaining the status quo. This has come following the global cues as food inflation stays high but overall inflation remains stable.

The GDP forecast has been raised for the first quarter of FY25 to 7.2% following how the Indian economy has been growing beyond expectations.

An unchanged repo gave way for some fleeting enthusiasm for the markets but we don't see much significant impact, particularly in the long run. Equity investors should remain cautious as markets are volatile and this volatility is expected to continue."

08 Feb 2024, 12:02:59 PM IST

RBI MPC Meeting 2024 Live: Reactions - Anirudh Garg, Partner and Fund Manager at Invasset on RBI MPC announcements

"In today's monetary policy announcement, the Governor of the Reserve Bank of India emphasized two critical points. First, he highlighted the optimistic outlook for India, with robust growth projections and inflation being effectively managed. The decision to maintain a steady monetary stance is driven by a couple of strategic considerations. Firstly, with upcoming elections, it's imperative to avoid inflationary pressures to ensure economic stability. Secondly, in light of the US Federal Reserve's decision to maintain its current interest rates, any reduction in rates by India could lead to a significant depreciation of the Indian Rupee. This careful approach underscores the RBI's commitment to balancing growth aspirations with macroeconomic stability, particularly in the context of global financial dynamics."

08 Feb 2024, 11:56:01 AM IST

RBI MPC Meeting 2024 Live: Reactions - Sonam Srivastava, Founder and Fund Manager at Wright Research

"With the decision to keep interest rates unchanged, the RBI aims to strike a balance between controlling inflation and supporting economic growth. This steady stance provides clarity and stability for investors and businesses, fostering an environment conducive to investment and planning.

For the financial markets, particularly the bond and equity markets, the unchanged interest rates signal continuity in borrowing costs, influencing investor sentiments. Equity markets may experience a boost as lower borrowing costs encourage corporate investments and consumer spending, potentially leading to higher stock valuations. However, bond markets might exhibit a subdued reaction as expectations for rate cuts are postponed.

In sectors sensitive to interest rate movements, such as real estate and automobiles, the unchanged policy could offer relief by maintaining affordability for borrowers. Additionally, sectors reliant on consumer spending, like retail and hospitality, may benefit from sustained consumer confidence resulting from stable borrowing costs.

Overall, the RBI's policy decisions are anticipated to provide stability and support economic recovery, although the exact impact may vary across different segments of the economy. Investors and businesses alike will closely monitor subsequent developments to navigate their strategies in response to evolving market dynamics."

08 Feb 2024, 11:47:39 AM IST

RBI MPC Meeting 2024 Live: Reactions - Mukesh Kochar, National Head of Wealth at AUM Capital

"The MPC outcome is on expected lines only. RBI will continue to focus on aligning inflation towards its target of 4% which is expected to be attained by the June-August. Inflation expectations for Q4 and Q1 have also been reduced. So the market may discount a rate cut possibility during the end of the 2nd quarter or 3rd quarter. Both the debt market and equity market may discount a rate cut possibility during the end of the 2nd or 3rd quarter.

The tight liquidity in the banking system may continue for some more time as the focus is on bringing down inflation towards 4%. Increased public debt globally has been cited as a concern and which is very important."

08 Feb 2024, 11:41:44 AM IST

RBI MPC Meeting 2024 Live: Reactions - Aalesh Avlani, Executive Director & Co-Founder, Credit Wise Capital

"The RBI MPC's decision to uphold the repo rate at 6.5% underscores a prudent stance towards economic stability. Amidst this backdrop, digital lending emerges as a catalyst for stimulating consumer expenditure and supporting the automotive sector. This trend was evident in the last few quarters too, including the festive period, where enhanced affordability in financing options spurred sales growth. We remain optimistic about the future as we navigate these favourable conditions and continue to drive forward".

08 Feb 2024, 11:36:54 AM IST

RBI MPC Meeting 2024 Live: Reactions - Anitha Rangan, Economist, Equirus

"In the last policy for this fiscal year, RBI has kept policy unchanged as expected. However, the decision is not unanimous with a 5-1 vote. No change in stance. The policy estimates a strong revision in growth for FY25 to 7% from 6.5% (Q1-Q3FY25) in the previous policy. Alongside, inflation is moderately revised downwards to 4.5% from 4.6% in the same period. The governor in his speech noted that the “job is not yet finished" with a 4% target in mind. While batting for India’s resilience amidst global volatility, it appears that RBI is not in discussion for rate cuts as a) 7% growth is very strong and does not require rate support b) Inflation is subject to food price risks and 4.5% is not 4% on a durable basis. Also no giveaways on liquidity. In the quest to preserve the strength and bat for long-term growth, RBI will rather look to maintain vigil and not in any rush to cut rates. The 7% growth does not seem to need the central bank’s nudge".

08 Feb 2024, 11:29:49 AM IST

RBI MPC Meeting 2024 Live: Reactions - Sunil Nyati, Managing Director of Swastika Investmart

"The RBI keeps interest rates unchanged, as expected, but the tone is still cautious about inflation, and there are no indications of an interest rate cut in the near term, while the market was expecting a dovish stance after the government kept the fiscal deficit at 5.1% in the budget. The market didn't react much to it, but the bias is bullish, so we can expect the bank nifty to catch up in the medium term.

Technically, 22125 is acting as an immediate hurdle; above this, we can expect a rally towards 22222 and 22350 levels. On the downside, a 20-DMA of 21670 is a strong support level.

Banknifty has formed a bottom 45500–44800 zone; however, a 20-DMA of 46300 is an immediate resistance; above this, we can expect a rally towards the 46800–47000 zone."

08 Feb 2024, 11:24:26 AM IST

RBI MPC Meeting 2024 Live: Full text of Governor Shaktikanta Das' speech on February 8, 2024

The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) on Thursday decided to keep its key policy rates unchanged. RBI bi-monthly Policy Committee (MPC) meeting, which commenced its meeting on February 6, and concluded its three-day deliberation today.

The MPC also decided by a majority (5 out of 6 members) to remain focused on the withdrawal of accommodation to ensure the inflation progressively aligns with the target while supporting growth. Monetary policy must continue to be actively disinflationary, RBI Governor Shaktikanta Das said in his statement.

Here's the Full Text of RBI Governor Shaktikanta Das' MPC Announcement

08 Feb 2024, 11:09:03 AM IST

RBI MPC Meeting 2024 Live: Reactions - Anuj Puri, Chairman – ANAROCK Group

"With the fundamentals of the Indian economy remaining strong despite all global headwinds and inflation well under control, the RBI once again decided to keep the repo rates unchanged at 6.5%, thus extending the festive bonanza that it gave to the homebuyers in its last two policy announcements. Thus, homebuyers retain their advantage of relatively affordable home loan interest rates.

If we consider the present trends, the housing market has been unstoppable, and unchanged home loan rates will help maintain the overall positive consumer sentiments. Given that housing prices have risen across the top 7 cities in the last one year, this breather by the RBI is a distinct advantage to homebuyers.

As per ANAROCK Research, 2023 saw average housing prices rise by anywhere between 10-24% in the top 7 cities, with Hyderabad recording the highest 24% jump. The average prices in these markets stood at approx. INR 7,080 per sq. ft., while in 2022 it was approx. INR 6,150 per sq. ft. – a collective increase of 15%.

Going forward, we can expect the momentum in housing sales to continue, significantly aided by the unchanged repo rates which will keep home loan interest rates attractive and also signal ongoing robustness of India’s positive economic outlook."

08 Feb 2024, 11:00:52 AM IST

RBI MPC Meeting 2024 Live: RBI Monetary policy — Key highlights

– RBI keeps the repo rate steady at 6.5 percent with five out of six members voting in favour of the rate decision Experts were also expecting the repo rate to remain steady at 6.5 percent

– MPC also decided by a majority (5 out of 6 members) to remain focused on the withdrawal of accommodation to ensure the inflation progressively aligns with the target while supporting growth. Monetary policy must continue to be actively disinflationary, RBI Governor Shaktikanta Das said in his statement.

– The Reserve Bank of India (RBI) has maintained its inflation projection at 5.4% for 2023–2024.

– CPI inflation is predicted to be 4.5 percent for the upcoming fiscal year 2024–2025, with Q1 at 5 percent, Q2 at 4 percent, Q3 at 4.6 percent, and Q4 at 4.7 percent.

08 Feb 2024, 10:58:14 AM IST

RBI MPC Meeting 2024 Live: Reactions - Umeshkumar Mehta, CIO, SAMCO Mutual Fund

"RBI’s easygoing, accommodative policy laid no jolts on D-Street. The rates remained unchanged for the 6th consecutive time and there were no further surprises. With a similar stance as the last time, we feel the interest rates have peaked and there are higher chances that this accommodative stance would shift in the latter half of the year, by when the interest rate cuts would begin. Despite the global headwinds, growth in the Indian economy has remained resilient above 7% and with this balanced fiscal status, we expect huge inflows into India in the coming months".

08 Feb 2024, 10:54:40 AM IST

RBI MPC Meeting 2024 Live: Reactions - Shiwang Suraj, Director & Founder – InfraMantra

"RBI's decision to maintain the current repo rate is a strategic move that bodes well for the Indian real estate sector. This steadiness in the monetary policy framework helps in keeping the interest rates on loans stable, making financing more predictable for both developers and homebuyers. As a result, we can expect sustained investment and development in the real estate market, fostering an environment of growth and stability that is crucial for long-term sectoral health and prosperity."

08 Feb 2024, 10:47:11 AM IST

RBI MPC Meeting 2024 Live: Reactions - Ramani Sastri, Chairman and MD, Sterling Developers

"The long-term benefits of owning a home have led to sustainable growth in the segment and we see this up-cycle continuing in 2024. Hence, the pause in policy rates augurs well for the residential real estate sector. Consumers are keen to buy homes as stability and security are on top of their minds now and the recent past has been a testament to the fact that home buyer confidence is at an all-time high. An increase in earning potential, end user-driven demand, a need for a better standard of living and the growing base of aspirational consumers and their lifestyle changes have led to substantial demand and growth in the sector. With economic growth, the premium housing segment too will continue to witness higher demand in the future. Real estate investments hence remain one of the most desired investments due to their strong base and reliability factor. We will continue to see a multi-fold growth in real estate investments since the real estate market is less volatile than other investment markets and delivers higher returns. As long as the macro fundamentals are stable, demand for real estate will continue to grow. Going forward, there can be a further uptick in demand with a reduction in rates, making it even more enticing for prospective homebuyers and bolstering overall market confidence."

08 Feb 2024, 10:40:58 AM IST

RBI MPC Meeting 2024 Live: India's $622.5 billion forex reserve can meet all foreign obligations, says Governor Shaktikanta Das

India will remain the highest recipient of remittances

India's forex reserve at $622.5 billion; comfortable for meeting all foreign obligations

Lenders will have to provide key fact statements regarding loans to retail, MSME borrowers

08 Feb 2024, 10:39:08 AM IST

RBI MPC Meeting 2024 Live: Domestic financial system remains resilient with healthy balance sheet, says Governor Shaktikanta Das

We expect regulated entities to accord the highest priority to compliance culture, and protection of consumer interest.

India's services export remained resilient during Oct-Dec period of FY'24

The domestic financial system remains resilient with a healthy balance sheet

08 Feb 2024, 10:36:06 AM IST

RBI MPC Meeting 2024 Live: RBI remains nimble and flexible in managing liquidity, says Governor Shaktikanta Das

In the credit market, monetary transmission remains incomplete

Indian rupee saw the lowest volatility in 2023-24, exchange rate has remained fairly stable

RBI remains nimble and flexible in managing liquidity

08 Feb 2024, 10:32:59 AM IST

RBI MPC Meeting 2024 Live: RBI focused on aligning inflation target, says Governor Shaktikanta Das

Increasing geopolitical tension impacts the supply chain and puts pressure on commodity prices, especially crude oil.

RBI projects retail inflation at 5.4 pc for current fiscal, 4.5 pc for 2024-25.

Monetary policy has to remain vigilant to successfully navigate the last mile of disinflation.

RBI stresses it remains focused on aligning the inflation target of 4 percent on a durable basis.

08 Feb 2024, 10:25:08 AM IST

RBI MPC Meeting 2024 Live: Rural demand continues to gather pace, says Governor Shaktikanta Das

MPC will carefully monitor any sign of pressure on food prices.

Going by the Interim Budget, the government is adhering to fiscal consolidation.

Momentum in economic activity is expected to continue in fiscal year 2024-25 also.

The investment cycle gaining steam aided by a sustained thrust of government capital expenditure

Rural demand continues to gather pace, urban consumption remains strong

08 Feb 2024, 10:20:15 AM IST

RBI MPC Meeting 2024 Live: Governor Shaktikanta Das — CPI Inflation

Headline inflation moderated to 5.5% in April -December 2023, from 6.7% in FY23. Headline CPI inflation for FY24 is at 5.4%, with projection for FY24Q4, the current quarter at 4 5%

CPI inflation projection for FY25 is 4.5%

CPI inflation projection for FY25Q1 is 5%

CPI inflation projection for FY25Q2 4%

CPI inflation projection for FY25Q3 4.6%

CPI inflation projection for FY25Q4 4.7%

08 Feb 2024, 10:16:57 AM IST

RBI MPC Meeting 2024 Live: Governor Shaktikanta Das — Real GDP Growth

RBI projects real GDP growth of 7 pc for FY'25 with risks evenly balanced.

Real GDP growth for FY25 is projected at 7%

For FY24Q1 is projected at 7.2%

For FY24Q2 is projected at 6.8%

For FY24Q3 is projected at 7%

For FY24Q4 is projected at 6.9%

08 Feb 2024, 10:14:49 AM IST

RBI MPC Meeting 2024 Live: Governor Shaktikanta Das says

Uncertainty in food prices continues to impinge on headline inflation. MPC remains resolute on containing inflation at the target of 4 percent. Global growth expected to remain steady in 2024

08 Feb 2024, 10:12:44 AM IST

RBI MPC Meeting 2024 Live: Governor Shaktikanta Das Says

Uncertainty in food prices continues to impinge on headline inflation. Momentum in domestic activities continues to be strong. Real GDP at 7.3% for FY24, third successive year of growth

08 Feb 2024, 10:10:09 AM IST

RBI MPC Meeting 2024 Live: Governor Shaktikanta Das — On Growth

India's potential growth is propelled by structural drivers. Growth is accelerating and outpacing most analysts' forecasts.

08 Feb 2024, 10:06:30 AM IST

RBI MPC Meeting 2024 Live: Governor Shaktikanta Das — Rates unchanged

RBI MPC keeps the policy repo rate changed at 6.5% in a unanimous decision. MPC decides to remain focused on the withdrawal of the accommodative stance, Das said.

08 Feb 2024, 10:03:41 AM IST

RBI MPC Meeting 2024 Live: RBI Governor Shaktikanta Das begins MPC announcement

Reserve Bank of India Governor Shaktikanta Das begins his Monetary Policy Committee meeting announcement

08 Feb 2024, 09:56:55 AM IST

RBI MPC Meeting 2024 Live: Who are members of the RBI MPC?

The RBI MPC is comprised of six members, including both external members and RBI officials. This includes the RBI Governor, 2 deputy governors, and 3 external members

1) Shaktikanta Das, Governor of RBI

2) Michael Debabrata Patra, Deputy Governor of RBI

3) Rajiv Ranjan, Officer of RBI nominated by the Central Board, Member

4) Prof. Ashima Goyal, Professor, Indira Gandhi Institute of Development Research, Member

5) Prof. Jayanth R. Varma, Professor, Indian Institute of Management Ahmedabad, Member

6) Dr. Shashanka Bhide, Senior Advisor, National Council of Applied Economic Research, Member.

08 Feb 2024, 09:51:50 AM IST

RBI MPC Meeting 2024 Live: Check date, time, schedule, where to watch

-- RBI MPC Meeting Date: RBI Governor-headed Monetary Policy Committee (MPC) will start its three-day deliberations on February 6. Governor Shaktikanta Das will announce the decision of the six-member panel on February 8.

-- RBI MPC Meeting Timing: RBI Governor Shaktikanta Das will unveil the MPC decision around 10 am on February 8.

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

-- RBI MPC Meeting Live Streaming Link: The central bank will live stream the RBI Governor's policy statement on RBI's YouTube channel or RBI's official X (formerly Twitter) handle.

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