RBI Monetary Policy Meeting 2025 February: The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) will start its three-day meeting tomorrow (February 5) and the decision on interest rates will be announced by the governor of the central bank, Sanjay Malhotra on February 7. The RBI conducts six bi-monthly meetings each financial year to discuss interest rates, money supply, inflation outlook and other macroeconomic indicators and the February meeting will be the last of this fiscal. This financial year, the RBI MPC had met on December 4-6, October 7-9, August 6-8, June 5-7, and April 3-5. The MPC meets invariably for 3 days before announcing its decision at the end of the 3-day period.
Meet the RBI MPC members
The RBI’s Monetary Policy Committee (MPC) consists of six members – three internal members and three external members. Earlier in October last year, the Centre had appointed three new members to the RBI’s monetary policy panel. The new members are Saugata Bhattacharya, Economist; Dr Nagesh Kumar, Director and Chief Executive, Institute for Studies in Industrial Development; and Professor Ram Singh, Director, Delhi School of Economics, University of Delhi. The three members will hold office for a period of four years. The three external members of the committee are routinely nominated and appointed by the central government. The three external members had replaced Shashanka Bhide, Ashima Goyal, and Jayanth R Varma.
The three internal members include Chairperson Sanjay Malhotra, RBI Deputy Governor in charge of monetary policy Michael Debabrata Patra and Executive Director monetary policy department of RBI, Rajiv Ranjan.
This will be the first MPC meet under the leadership of Sanjay Malhotra. Earlier in December, Sanjay Malhotra took charge as the 26th governor of the central bank for the next 3 years, replacing Shaktikanta Das.
Highlights of December RBI MPC meeting
In the December 2024 meeting, the RBI MPC had decided to keep the key rates unchanged at 6.50 per cent while battling against inflation amid weakening growth momentum. Four out of its six members had voted to keep the policy repo rate unchanged for the eleventh bi-monthly review in a row. However, the MPC, acknowledging that the country is facing tight liquidity conditions, cut the Cash Reserve Ratio (CRR) for banks by 50 basis points to 4 per cent. The then RBI Governor Shaktikanta Das had said that maintaining price stability is a crucial factor. He had added that maintaining macro economic stability and creating buffers is important for the economy. The RBI had also revised its FY25 growth lower to 6.6 per cent and expected that the full-year inflation will be around 4.8 per cent.
Who announces the RBI MPC’s decision?
The governor of the central bank announces the decisions after the three-day deliberations. This year, the newly appointed RBI Governor Sanjay Malhotra will deliver the policy details on February 7.
Where can I watch the RBI monetary policy?
In order to check announcements from the RBI MPC, one can refer to the following sources:
-RBI Official Website: The central bank publishes all MPC announcements, including press releases, policy statements, and minutes of meetings, on its official website. Visit the Monetary Policy section of the RBI website for the latest updates.
-RBI Press Releases: RBI also makes available regular updates and detailed press releases on the Press Release section of its website. These releases provide comprehensive details about policy decisions and economic outlook.
-Financial News Websites and TV Channels: Major financial news platforms, including FinancialExpress.com, cover RBI MPC meetings and announcements extensively. The announcements are also broadcast on all news channels.
-RBI’s Social Media Channels: The RBI maintains official social media profiles on platforms like Twitter and LinkedIn.
-Government Websites and Portals: Websites such as the Ministry of Finance or economic research portals often reference or provide links to RBI MPC announcements.
Will RBI reduce repo rate in 2025?
According to economists, the RBI is expected to commence the rate easing cycle this February with a 25 bps cut, reflecting the current domestic growth-inflation dynamics. The central bank is also expected to add durable liquidity and keep a close watch on currency to limit excessive volatility.
Garima Kapoor, Economist and Executive Vice President at Elara Securities, said that with India’s headline inflation slowing down to 5.22 per cent led by moderation in food and beverage prices, the MPC is expected to cut repo rate by 25 bps in February 2025 policy. “The disinflation in food prices is expected to sustain in January as new supplies come through. While weakening INR and a surge in crude oil prices are emerging risks, weak demand will keep pricing power contained. We continue to expect the Monetary Policy Committee (MPC) to cut policy repo rate by 25bps in February 2025 policy, as risks to domestic growth have increased and as the RBI yields the control of the Rupee to embrace monetary independence (elevated and firm US Dollar limit the degree of freedom for the RBI),” she added.
Earlier, a Bloomberg report had stated that the RBI governor is showing a willingness to allow the rupee to move more freely in tandem with peers in the region, while maintaining that he is still intervening in the foreign-exchange market to curb excessive moves.
Upasana Chachra, Chief India Economist, Morgan Stanley, also stated, “We hold to our view of the MPC embarking on a shallow rate easing cycle from the February 7 policy meeting. We expect the MPC to retain its neutral stance. Consensus is also penciling in a rate cut from February.”