RBI Monetary Policy Meeting HIGHLIGHTS: RBI CUTS CRR by 50 bps to 4%, keeps repo rate UNCHANGED, FY25 GDP target revised LOWER to 6.6%

Before December 2023, the RBI MPC meeting was held on October 4-6. After the 3-day deliberation, the central bank had decided to keep the key policy repo rate unchanged at 6.5 per cent, maintaining the status quo for the fourth time in a row. The MPC decided by a majority of 5 out of 6 members to remain focussed at withdrawal of accommodation to ensure inflation aligns to the target by supporting growth.

At the end of its December 2023 meeting, the RBI MPC had decided to keep the repo rate unchanged at 6.50 per cent. “The Reserve Bank of India’s Monetary Policy Committee after a detailed assessment of the evolving macroeconomic developments, has decided unanimously to keep the repo rate unchanged at 6.5 per cent,” RBI Governor Shaktikanta Das had said. This was the fifth meeting wherein the MPC had decided to maintain the status quo on the repo rate. Governor Shaktikanta Das had said that FY24 real GDP growth was projected at 7 per cent. Real GDP growth for the next year was projected at 6.7 per cent in Q1, 6.5 in Q2 and 6.4 in Q3.

Before the April meeting, the RBI MPC had met on February 6-8 and the central bank had decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50 per cent. The stance was also maintained at ‘withdrawal of accommodation’ to ensure that inflation progressively aligns to the target, while supporting growth. “These decisions are in consonance with the objective of achieving the medium- term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth,” Shaktikanta Das had said.

During the deliberations at the April 2024 meeting, the RBI MPC unanimously decided to keep the key interest rates unchanged at 6.50 per cent. The policy stance was also maintained at ‘withdrawal of accommodation’. RBI Governor Shaktikanta Das had said that the GDP growth forecast for FY25 was at 7 per cent.

The RBI MPC meeting, prior to the August meet, was held between June 5-7 at the end of which, the RBI governor had announced that the panel members decided to keep the repo rate unchanged at 6.5 per cent for the eight consecutive time by a 4:2 majority. RBI raised its GDP growth forecast for FY25 to 7.2 per cent from 7 per cent earlier, while retaining the FY25 inflation forecast at 4.5 per cent.

Before the October meeting, the RBI MPC had met between August 6-8 and at the end of the 3-days deliberation, the central bank kept the benchmark interest rate unchanged at 6.50 per cent. The MPC had voted by a 4 to 2 majority to hold the policy rate. RBI Governor Shaktikanta Das had said that the MPC decided to maintain the policy stance of ‘withdrawal of accommodation’. RBI retained real GDP growth estimates for FY25 at 7.2 per cent, and CPI inflation projection at 4.5 per cent.

During its October meeting, the RBI MPC decided to keep the policy repo rate unchanged at 6.50 per cent for the 10th consecutive time, with five members voting in favour of the decision, which was aimed at taming inflation. The RBI, however, changed its stance to Neutral and the focus remained unambiguously on inflation. RBI Governor Shaktikanta Das had announced the GDP growth projection for FY25 at 7.2 per cent and inflation for the financial year at 4.5 per cent.

While all the monetary policy meetings for the financial year 2024-25 have already taken place, barring the February meeting. Here are the dates for RBI’s MPC meeting this fiscal:

April 3-5, 2024

June 5-7, 2024

August 6-8, 2024

October 7-9, 2024

December 4-6, 2024

February 5-7, 2025

The monetary policy committee determines the policy repo rate which is required to achieve the inflation target, while also keeping a watch on the liquidity condition and the state of the economy. This is the fifth MPC meeting for the financial year 2024-25. The body was constituted in 2016 and is required to meet at least four times a year.

The Monetary Policy Committee headed by RBI Governor Shaktikanta Das has three external members who hold office for a period of four years and are routinely nominated and appointed by the central government. Earlier, the Centre had appointed three new members to the 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.

And the internal members include Chairperson Shaktikanta Das, RBI Deputy Governor in charge of monetary policy Michael Debabrata Patra and Executive Director monetary policy department of RBI Rajiv Ranjan.

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The RBI MPC meeting led by Shaktikanta Das is ending today and the decision announcement will take place at 10:00 am. One can watch the RBI Governor’s speech at 10:00 am on the official YouTube channel of RBI. Further, one can also get updates from Major financial news platforms including FinancialExpress,com, and even on social media.

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With the RBI Governor Shaktikanta Das all set to announce the decision of the policy committee on the key interest rates, we, at FinancialExpress.com, are all set and ready to bring you all the updates on the repo rate, factors that may or may not have affected the deliberations at the 3-days meeting, state of Indian economy, GDP and inflation projections and much more, through this live blog. Stay tuned.