RBI MPC Meeting HIGHLIGHTS: Shaktikanta Das announces status quo on repo rate based on 5:1 MPC vote; full-year GDP, inflation forecasts unchanged

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RBI MPC Meeting April 2024 Live Update: RBI policy an affirmation of goldilocks for India with high growth, low inflation in FY25-FY26, says SBI Chairperson

“Tracking the market expectation of the status quo, the monetary policy statement is an affirmation of goldilocks for India with high growth and low inflation in FY25 and FY26," says SBI Chairperson Dinesh Kumar Khara. 

"Consumers' confidence in urban households continues to improve, while rural demand remains upbeat. The regulatory policy as usual has continued the deepening of payment systems with new functionality in UPI. The review of the LCR framework with the advent of 24/7 payment systems could act as a positive enabler to address frictional liquidity mismatches. The trading of sovereign green bonds in IFSC is also a welcome move and will broaden the markets," Khara adds. 

RBI MPC Meeting April 2024 Live Update: As we progress towards 'RBI @ 100', upcoming decade going to be a transformational journey, says Shaktikanta Das

"As we progress towards RBI@100, the upcoming decade is going to be a transformational journey," says Shaktikanta Das. 

Here are some highlights: 

• RBI continues to focus on preserving financial stability, promoting a robust, resilient, future-ready system to support economic growth
• Price stability to be a key component of this endeavour 
• Inflation is on a declining trajectory and GDP growth buoyant
• We should not lower our guard but continue to work towards ensuring that inflation aligns durably and sustainably to the target
• Our goal is in sight
• We must remain vigilant

RBI MPC Meeting April 2024 Live Update: RBI seems in no hurry to cut rates but to align inflation structurally to long-term target, says Mirae Asset Investment Managers' Mahendra Kumar Jajoo

The RBI may find itself in a pole position with growth momentum going strong, core inflation dropping and expectations of normal monsoon providing comfort on the headline inflation, particularly taming food inflation, says Mahendra Kumar Jajoo, CIO-Fixed Income at Mirae Asset Investment Managers. 

'However, possible spillovers from ongoing geopolitics developments, a reversion in commodity prices from recent lows, and the lingering impact of global food price volatility create caution amongst the members... Markets may find confidence in projecting rate cuts in later part of the year and interest rates may remain stable with a downward bias," Jajoo adds. 

RBI MPC Meeting April 2024 Live Update: Data till December 2023 indicates bank & NBFC capital, asset quality remain healthy, says Shaktikanta Das

Here are some highlights of what Shaktikanta Das says: 

• Financial indicators of NBFCs in line with banking system, as per latest available data
• Banks, NBFCs< other financial entities must continue to give highest priority to quality of governance, adherence to regulatory guidelines
• Financial sector players, by and large, should always be mindful of the fact that they operate with public money
• RBI to continue to constructively engage with financial entities in this regard
• RBI to continue to follow a consultative approach
• RBI to undertake review of regulations in line with evolving financial landscape 

RBI MPC Meeting April 2024 Live Update: Tight demand-supply situation in certain pulses, production of key vegetables warrant close monitoring

Here's what the RBI chief says on inflation: 

• Inflation has come down significantly but remains above target
• Food inflation continues to exhibit considerable volatility impeding the ongoing disinflation process
• Food price uncertainties continue to weigh on inflation trajectory
• A record rabi wheat production to help temper price pressure, replenish buffer stocks
• Early indication of a normal monsoon augurs well for kharif season
• International food prices remain benign
• Frequent, overlapping adverse climate shocks pose key upside risks to outlook on food prices in domestic as well as international markets
• Fuel deflation likely to deepen in near term
• Recent uptick in crude oil rates needs to be closely monitored
• Continuing geopolitical tensions pose upside risk to commodity prices, supply chains
• CPI inflation peaked at 7.8 per cent in April 2022
• Elephant has now gone out for a walk and appears to be returning to the forest | Read more on the RBI chief's 'elephant in the room' remark
• Would like elephant to return to forest and remain there on a durable basis
• It is essential in best interest of economy that CPI inflation continues to moderate, aligns to target
• Task remains unfinished till this is achieved   
• Effort is to ensure price stability on enduring basis, paving way for sustained period of high growth

RBI MPC Meeting April 2024 Live Update: Domestic economic activity continues to expand at accelerated pace, says Shaktikanta Das 

Here are some highlights of what the RBI chief says on the domestic economy: 

• Domestic economic activity supported by fixed investment, improving global environment
• From supply side, industrial activity led by manufacturing continued momentum
• With rural demand catching up, consumption expected to support economic growth in FY25
• External demand improved in February with exports registering double-digit expansion but trade deficit widened as imports also increased
• Outlook for agriculture, rural activity bright; good rabi wheat crop, improved prospects of kharif crop amid expectation of a normal south-west monsoon
• Strong growth momentum gives policy space to unwaveringly focus on price stability 

RBI MPC Meeting April 2024 Live Update: People can deposits at cash deposit machines by using UPI, says Shaktikanta Das

"Our next announcement is related to enabling UPI for the cash deposit facility. Deposit of cash through cash deposit machines is primarily being done through debit cards. Given the experience gained from card-less cash withdrawal using UPI at the ATMs, it is now supposed to also facilitate deposit of cash in CDMs using UPI," says the RBI chief. 

RBI MPC Meeting April 2024 Live Update: Status quo on interest rate, stance & full-year GDP projection, here are key takeaways of FY25's first policy review 

• No change in key lending rate; repo rate stands at 6.5% 
• MPC votes 5:1 to hold repo rate, maintain policy stance
• MPC votes 5:1 to change stance to 'accommodative'
• Consumer inflation near target range but food prices remain a challenge 
• FY25 real GDP growth projection retained at 7% 
• FY25 CPI inflation forecast maintained at 4.5% 
• RBI sees possibility of surge in commodity prices owing to geopolitical tensions

Read more on key takeaways of the RBI's first policy review of FY25

RBI MPC Meeting April 2024 Live Update: Need to remain vigilant on food prices given higher temperature April-June projections, says Shaktikanta Das 

Reserve Bank Governor Shaktikanta Das says that the impact of lower fuel prices on inflation will deepen in the coming months.

Referring to consumer inflation, the RBI chief says that the "elephant seems to have gone for a walk" and the central bank wants it to "remain in the forest".

RBI MPC Meeting April 2024 Live Update: Don't expect rate cut before December, says Saugata Bhattacharya 

In conversation with Zee Business Managing Editor Anil Singhvi, senior economist Saugata Bhattacharya says he doesn't see the possibility of the RBI lowering the key lending rate before December. 

The RBI Governor has hinted at controlling inflation at all costs, in his elaborate "elephant in the room" remarks, which now suggests that the central bank won't only wait till October (as anticipated earlier) but till December before reducing the repo rate, the economist explains. 

RBI MPC Meeting April 2024 Live Update: MPC policy takes recognition of fluidity of global narratives, says Emkay Global economist

"As we expected, the MPC policy took recognition of fluidity of global narratives... This suggests that when needed, the aim of financial stability may even precede inflation management," says Madhavi Arora, Lead Economist at Emkay Global Financial Services. 

"We have long maintained that the RBI policy has been somewhat pegged to the Fed, specifically over the last two years, even as it formally targeted inflation. This seems fair, as external dynamics have been fluid, implying that the policy prerogative needs to be flexible for ensuring financial stability. The fluidity of global narratives and policy repricing, in conjunction with the near-term problem-of-plenty on INR/bonds, could make it arduous for the RBI to find a balance in its policy biases," Arora adds.  

"We maintain the RBI’s tone will slowly tiptoe to ‘gracklish’ from the usual ‘hawk-dove’ signaling, implying a non-committal stance and limited definite forward guidance ahead," the economist adds. 

RBI MPC Meeting April 2024 Live Update: Rate-sensitive stocks a mixed bag

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RBI MPC Meeting April 2024 Live Update: FY25 consumer inflation projection maintained at 4.5%

• Q1: 4.9% (vs 5% earlier)
• Q2: 3.8% (vs 4% earlier)
• Q3: 4.6%
• Q4: 4.5% (vs 4.7% earlier)

RBI MPC Meeting April 2024 Live Update: Inflation has moderated but remains above target range, says Shaktikanta Das