RBI Policy

RBI Policy meeting updates

Live updates from the RBI Policy Committee meeting: Today, October 6, the Reserve Bank of India (RBI) released its fourth bimonthly monetary policy. The Monetary Policy Committee (MPC), headed by RBI Governor Shaktikanta Das, kept rates and stance unchanged as anticipated. The MPC unanimously opted to maintain the policy repo rate at 6.50%. As a result, the bank rate, marginal standing facility, and standing deposit facility (SDF) rates all stay at 6.75%. The MPC also resolved to continue concentrating on the withdrawal of accommodation to make sure that inflation gradually aligns to the target while promoting growth, with a majority of 5 out of 6 members.(RBI Policy)

Summary on RBI Policy meeting Committee

Rates of Interest

  • The repo rate remains at 6.5%.
  • The rate for the standing deposit facility (SDF) is at 6.25%.
  • The Bank Rate and the Marginal Standing Facility (MSF) Rate remain at 6.75%.
  • CRR at 4.5%
Rates of Interest

GDP Forecasts

The FY24 real GDP growth forecast remains at 6.5%.

  • 6.5% is the same as the Q2FY24 GDP projection.
  • The Q3FY24 GDP projection remains at 6%.
  • 5.7% is the unchanged Q4FY24 GDP prediction.
  • Q1FY25 GDP growth is expected to increase by 6.6% from April to June 2024.

Inflation Prediction

Inflation Rate

RBI keeps the CPI inflation forecast for FY24 at 5.4%; raises the CPI inflation forecast for Q2FY24 to 6.4% from 6.2%; lowers the CPI inflation forecast for Q3FY24 to 5.6% from 5.7%; maintains the 5.2% CPI inflation forecast for Q4FY24; and keeps the 5.4% CPI inflation forecast for April-June 2024, or Q1FY25.

PM Vishwakarma’s has been extended by two years, included in the PIDF initiative

The Payments Infrastructure Development Fund (PIDF) Scheme will include the PM Vishwakarma and its lifespan will be extended by an additional two years, ending on December 31, 2025.(RBI Policy)

PM Vishwakarma Yojna

This year Diwali Housing sales are resisted by RBI Intrest

For the fourth day in a row, the Reserve Bank of India (RBI) held the repo rate at 6.50 percent. This has been positively received by the housing market. According to analysts, the judgment has provided relief for both new and current borrowers of house loans. Due to the interest rate standstill, the EMI for both new loans and current loans will not increase.

“Equities to have serious competition from bonds” said Umesh Mehta of SAMCO Mutual Fund

Indeed, it is true to say that the Reserve Bank of India (RBI) is at a crucial period with regard to inflation. However, disturbing trends are also occurring on the global market, which is worrying central bankers all over the world. Anxiety is raised by the bond rates’ steadily rising daily pace of growth.(RBI Policy)

Given these factors, it is projected that the current central bank interest rate freeze will not last for a prolonged length of time. Interest rates are likely to move upward before a predicted pivot, which is predicted to take place around the middle of the following year. According to Umesh Kumar Mehta, the chief investment officer of SAMCO Mutual Fund, bonds are about to become a serious challenge to stocks.

 Expect September inflation at 5.3%, full year to average at 5.4%: Abheek Barua

The RBI issued a status quo policy, maintaining both its stance and the policy rate, as was predicted. The central bank maintained its cautious tone about the dangers of inflation while maintaining its growth and inflation forecasts for FY24.(RBI Policy)

With OMO sales now possible, the 10-year yield is probably going to move higher. Additionally, rising US rates may keep applying pressure in the foreseeable future. In terms of macroindicators, Abheek Barua, chief economist and executive vice president of HDFC Bank, predicted that September’s inflation reading would be 5.3% and that the year as a whole would be 5.4%.

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