RBI Monetary Policy Announcement Today Live Updates: The Reserve Bank of India’s Monetary Policy Committee on Friday unanimously decided to keep the key interest rates unchanged at 6.50 per cent. The RBI MPC headed by Governor Shaktikanta Das announced the committee’s decision after a three-day meeting that started on April 3. The RBI’s MPC voted by a 5:1 majority to keep key rates unchanged at 6.50 per cent. The policy stance is also maintained at ‘withdrawal of accommodation’, said Shaktikanta Das.
“Given the experience gained from card-less cash withdrawal using UPI at the ATMs, it is now proposed to also facilitate deposit of cash in CDMs using UPI. This measure will further enhance customer convenience and make the currency handling process at banks more efficient,” RBI Governor Shaktikanta Das said.
The RBI Retail Direct Scheme was launched in November 2021. The RBI governor said that it is now proposed to launch a mobile app for accessing the Retail Direct portal. “This will be of greater convenience to retail investors and deepen the G-sec market,” he added.
The RBI governor said that India continues to be the largest recipient of remittances in the world. “The cost of receiving remittances is gradually coming down. Overall, the CAD for 2024-25 is expected to remain at a level that is both viable and eminently manageable,” he said.
“During the first three quarters of 2023-24, India’s current account deficit (CAD) narrowed significantly on account of a moderation in merchandise trade deficit coupled with robust growth in services exports and strong remittances,” the RBI governor said in his speech.
“Liquidity conditions eased during February and March in the wake of increased government spending, the Reserve Bank’s market operations and the return-leg of a USD-INR sell buy swap auction. In particular, the liquidity situation improved in March with system liquidity turning intermittently surplus in the first half of the month.”
“The outlook for agriculture and rural activity appears bright, with good rabi wheat crop and improved prospects of kharif crops, due to expected normal south-west monsoon. Strengthening of rural demand, improving employment conditions and informal sector activity, moderating inflationary pressures and sustained momentum in manufacturing and services sector should boost private consumption. As per our survey, consumer confidence one year ahead reached a new high,” said RBI Governor Shaktikanta Das.
“The total flow of resources to the commercial sector from banks and other sources at Rs 31.2 lakh crore during 2023-24 is significantly higher than that of last year (Rs 26.4 lakh crore). External demand improved in February with exports registering double digit expansion. Trade deficit, however, widened in February as imports also accelerated,” the RBI governor said.
“Since the last policy, the growth-inflation dynamics have played out favourably. Growth has continued to sustain its momentum surpassing all projections. Headline inflation has eased to 5.1 per cent during January and February 2024 from 5.7 per cent in December 2023, with core inflation declining steadily over the past nine months to its lowest level in the series. Fuel component of the CPI remained in deflation for six consecutive months. Food inflation pressures, however, accentuated in February,” said the RBI Governor.
RBI Repo Decision Live: Here are key policy rates at present:
Repo Rate: 6.5%
Standing Deposit Facility Rate: 6.25%
Marginal Standing Facility Rate: 6.75%
Bank Rate: 6.75%
Fixed Reverse Repo Rate: 3.35%
RBI Repo Rate Live Updates: Financial indicators of NBFCs are in line with the banking system as per the latest available data. The key indicators of capital and asset quality of scheduled commercial banks continue to be healthy. Banks, NBFCs and other financial institutions must give high priority to regulatory guidelines, said the RBI Governor.
RBI Governor Shaktikanta Das says the relative stability of Indian rupee reflects India‘s sound macro economic fundamentals, financial stability and improvement in external position.
The RBI Governor said that the services PMI has remained above 60 in February and March suggesting sustained, healthy expansion. Urban consumption has remained buoyant. The resilience in cement production, import of capital goods, steel consumption augur well for investment cycle, he added.
RBI Governor Shaktikanta Das says “looking ahead the Reserve Bank of India will remain nimble and flexible in liquidity management through fine tuning operations in repo and reverse repo rate. We will ensure that money market interest rate evolve in a systematic manner. Rupee has remained largely stable and rangebound. Indian rupee exhobited lowest volatility in FY24.”
“Two years ago, around this time, when CPI inflation had peaked at 7.8 per cent in April 2022, the elephant in the room was inflation. The elephant has now gone out for a walk and appears to be returning to the forest. We would like the elephant to return to the forest and remain there on a durable basis. In other words, it is essential, in the best interest of the economy, that CPI inflation continues to moderate and aligns to the target on a durable basis. Till this is achieved, our task remains unfinished.”
RBI forecasts India’s CPI inflation at 4.5% for FY25.
Q1FY25: CPI estimates cut to 4.9% from 4.5% earlier
Q2FY25: CPI estimates cut to 3.8% from 4% earlier
Q3FY25: CPI estimates unchanged at 4.6%
Q4FY25: CPI estimates cut to 4.5% from 4.7% earlier
Inflation has come down significantly but still well over the 4% target. Food inflation continue to exhibit continued volatility which is impeding the true impact of disinflationary policy action. High food inflation could unhinge anchoring of inflation expectation. Unwavering focus on price stability by RBI
“With rural demand catching up, consumption is expected to support economic growth in 2024-25. Urban consumption stayed buoyant as evident from various indicators. The resilience in cement production, together with strong growth in steel consumption and production and import of capital goods, augur well for the investment cycle to gain further traction,” RBI Governor Shaktikanta Das said.
Early indication of normal monsoon augurs well for the Kharif season. International food prices also remain benign and the tight demand supply situation in certain category of pulses and the production outcome warrant close monitoring especially in the background of warning ‘above normal temperature’ forecast in April, May and June.
The RBI in its MPC meet projected the GDP growth for FY25 at 7 per cent for the Indian economy. RBI Governor Shaktikanta Das said that the GDP is estimated at 7.1 per cent in Q1, 6.9 per cent in Q2, and 7 per cent in Q3 and Q4. The risks are evenly balanced, he added.
The Reserve Bank of India in its MPC meet projected the CPI inflation for FY25 at 4.5 per cent.
RBI monetary policy live: Core inflation declined steadily. Ensure to meet the target 4 per cent for inflation and see upside risk on inflation. The MPC must be ‘actively disinflationary’, said RBI Governor Shaktikanta Das.
The second advanced estimates place India‘s real GDP growth for FY24 at 7.6%- the third successive year of 7% plus growth. Fixed investment and improving global environment supporting growth in India.
Rising levels of public debt may result in spillover impact across emerging economies. India‘s fiscal consolidation and GDP growth offers better cushion effect.
RBI Governor Shaktikanta Das says overall outlook challenged by Geopolitical tension, disruption of trade routes and high public debt
RBI Governor Shaktikanta Das said that the committee has decided to keep the MSF and SDF rates unchanged at 6.75 per cent and 6.25 per cent respectively.
RBI Governor Shaktikanta Das says robust growth prospects enables Policy focus to remain on inflation. MPC remains vigilant to the upside risks to inflation. The Monetary Policy must remain actively disinflationary to ensure anchoring of inflation expectation and fuller transmission of past Policy action.
RBI Governor announced that MPC has maintained its stance of ‘withdrawal of accommodation’.
RBI Governor Shaktikanta Das says that RBI has decided to maintain ‘withdrawal of accommodation’ stance as inflation has eased significantly in January and February.
RBI’s Monetary Policy Committee decides to maintain status quo in the first bi-monthly policy of FY25 and kept the policy repo rate unchanged at 6.50 per cent.