RBI MPC December Review HIGHLIGHTS: MPC votes 4:2 to leave repo rate unchanged, cuts GDP forecast; stance stays at neutral
RBI MPC December Review HIGHLIGHTS: RBI Governor Shaktikanta Das announced a status quo on the repo rate on Friday, December 6, as he presented the key decisions taken by the Monetary Policy Committee in its three-day, bi-monthly meeting. This is the last scheduled bi-monthly policy review of the calendar year.
RBI MPC December Review HIGHLIGHTS: RBI Governor Shaktikanta Das announced a status quo on the repo rate on Friday, December 6, as he presented the key decisions taken by the Monetary Policy Committee in its three-day, bi-monthly meeting. This is the last scheduled bi-monthly policy review of the calendar year.
Das said the MPC voted 4:2 to leave the repo rate unchanged while unanimously deciding to continue with its 'neutral' stance of policy.
The December 4-6 policy review comes at a time when two macroeconomic data sets are showing alarming signs: the country's GDP growth has slowed to a 7-quarter low while consumer inflation has worsened to cross the upper end of the RBI's tolerance band.
Follow this space to catch highlights of the December MPC review:
Latest Updates
RBI MPC Policy Review: Debt market expected to stabilise in next few days as traders positions get offloaded, says Tata Asset Management's Murthy Nagarajan
Murthy Nagarajan of Tata Asset Management highlights that the debt market has taken no rate cut or change in stance negatively, reflected in a rise in the 10-year yield from 7.72 to 7.75.
Until the market stabilises in the next few days, the 10-year yield is expected to trade in the range of 6.72 to 6.78 levels, says Nagarajan.
The RBI may have to cut more than 50 basis points in the coming months as the rate cut cycle is getting delayed and GDP growth is trending towards 6 per cent levels, he adds.
RBI MPC December Review: Repo rate & CRR decisions in accordance with expectations, says analyst
Parijat Agrawal of Union AMC expects a 25-basis-point reduction in the repo rate in the February review.
The moderation in growth and the persistence of headline inflation are concerning factors that may necessitate timely policy support, and addressing the challenge of stimulating growth is critical and should not be overlooked, adds Agrawal.
RBI MPC December Review: CRR cut a welcome move, says Shriram AMC's Deepak Ramaraju
Deepak Ramaraju of Shriram AMC highlights that the RBI has remained overall accommodative to boost growth and maintain price stability.
The CRR cut and the bottoming out of the slowdown will augur well with equity markets in the medium term, says the fund manager.
"The CRR cut is a welcome move and will lead to improved credit growth due to increased liquidity in the system," Ramaraju adds.
RBI MPC December Review: When can you expect first repo rate cut in current cycle?
Dhawal Dalal of Edelweiss MF believes that the first rate cut may potentially be in February.
"Leaning on prudence and practicality, the MPC kept the policy rate unchanged amid higher food inflation but cut the CRR to 4.0 per cent to ease the banking system liquidity deficit," says Dalal.
RBI MPC Policy Review Update: How rate-sensitive stocks fare at this hour
Consumer durable stocks
Stock Change (%) CMP BLUESTARCO 4.76 2,059.60 CENTURYPLY 2.64 784.4 KALYANKJIL 2.5 738.7 TITAN 1.28 3,484.95 BATAINDIA 0.89 1,452.50 DIXON 0.6 17,402.20 VOLTAS 0.54 1,676.90 AMBER 0.52 5,849.60 WHIRLPOOL 0.49 1,901.65 HAVELLS 0.28 1,751.65 RAJESHEXPO 0.28 236.38 VGUARD 0.09 426.85 CERA 0.05 7,677.00 CROMPTON -0.35 403.8 KAJARIACER -0.71 1,195.95 RBI MPC Policy Review Update: How rate-sensitive stocks fare at this hour
Realty stocks
Stock Change (%) CMP BRIGADE 1.53 1,323.05 RAYMOND 0.39 1,624.70 PRESTIGE 0.35 1,740.00 DLF 0.24 852.25 MAHLIFE 0.17 508.75 OBEROIRLTY -0.07 2,128.80 LODHA -0.27 1,365.95 GODREJPROP -0.52 2,845.75 SOBHA -1.32 1,648.50 PHOENIXLTD -3.12 1,748.70 Catch latest updates on rate-sensitive stocks here
RBI MPC Policy Review Update: How rate-sensitive stocks fare at this hour
Auto stocks
Stock Change (%) CMP BAJAJ-AUTO 2.12 9,080.55 MARUTI 0.66 11,255.85 EICHERMOT 0.6 4,866.70 M&M 0.51 3,087.15 TVSMOTOR 0.35 2,521.00 ASHOKLEY -0.19 232.15 TATAMOTORS -0.25 790.55 HEROMOTOCO -0.46 4,623.10 RBI MPC Policy Review Update: How rate-sensitive stocks fare at this hour
Banking, financial services and insurance stocks
Stock Change (%) CMP AXISBANK 2.01 1,189.90 MUTHOOTFIN 0.99 1,956.75 BAJFINANCE 0.96 6,916.45 LICHSGFIN 0.85 644.15 ICICIGI 0.66 1,945.50 SBILIFE 0.19 1,434.55 ICICIPRULI 0.13 675.6 SHRIRAMFIN 0.1 3,129.50 SBIN 0.02 865.6 ICICIBANK -0.07 1,335.50 BAJAJFINSV -0.26 1,639.80 HDFCBANK -0.37 1,858.90 HDFCLIFE -0.93 637.2 CHOLAFIN -1.27 1,275.00 RBI MPC Policy Review: Minutes of today's policy meet to be released on December 20
Minutes of RBI policy meetings offer details on the thought process behind the votes of various MPC members.
The central bank is set to release the minutes of today's meeting on December 20.
RBI MPC Policy Review: MPC votes unanimously to maintain 'neutral' stance
All six members vote for continuing with the neutral stance of monetary policy and to remain unambiguously focused on a durable alignment of inflation with the target.
RBI MPC Policy Review: Growing dissent in MPC as members vote 4:2 to hold repo rate at 6.5%
Here's how various members have voted:
For keeping repo rate unchanged
- Saugata Bhattacharya
- Rajiv Ranjan
- Michael Debabrata Patra
- Shaktikanta Das
For lowering repo rate by 25 bps
- Nagesh Kumar
- Ram Singh
RBI MPC Review LIVE: Full-year GDP growth projection revised lower by 60 bps citing evenly-balanced risks
Take a look at the RBI's quarter-wise GDP growth projections for the coming months:
- Q3 FY25: 6.8%
- Q4 FY25: 7.2%
- Q1 FY26: 6.9%
- Q2 FY26: 7.3%
RBI MPC December Review LIVE Update: Cash reserve ratio stands revised to 4% from 4.5%
The RBI Governor points out that the 50-bps cut will lead to Rs 1.16 lakh crore additional liquidity for banks.
Shaktikanta Das also mentions surplus liquidity in October and November driven by higher government spending.
RBI MPC Policy LIVE Update: BREAKING--RBI raises Q3 CPI inflation forecast to 5.7% from 4.8%
The RBI Governor acknowledges that consumer inflation breached the central bank's target range in October.
However, he expresses confidence that inflation will likely ease in the final quarter of the current financial year.
The MPC remains unambiguously focused on a durable alignment of inflation with the target while supporting growth, according to the RBI.
RBI MPC Review LIVE: BREAKING--Cash reserve ratio revised lower by 50 bps
RBI MPC December Review LIVE: RBI lowers full-year GDP forecast to 6.6% from 7.2%
The RBI Governor, however, points out that high frequency indicators are suggesting that the apparent slowdown in domestic economic activity has bottomed out in Q2.
RBI MPC Policy Review LIVE: Monetary policy has a wide-ranging impact, says Shaktikanta Das
The monetary policy has a wide-ranging impact, with price stability being important for every segment of the society, says the RBI Governor.
RBI MPC Policy Review LIVE: BREAKING--Q1 FY26 GDP growth projected at 6.9%
The RBI Governor says that the central bank now expects GDP growth to be at 6.9 per cent in the first quarter of the next financial year (Q1 FY26) and 7.3 per cent in the following quarter.
RBI MPC Policy Review LIVE: BREAKING--FY25 GDP growth projection revised to 6.6%
The RBI Governor says that the central bank now expects GDP growth to be at 6.8 per cent in the quarter ending December 2024 followed by 7.4 per cent in the final quarter of the current financial year.
RBI MPC Review: BREAKING--Policy stance maintained at 'neutral'
RBI MPC Review: BREAKING--Repo rate unchanged at 6.5%, MPC votes 4:2 to maintain key lending rate
Sensex and Nifty
At around 10.08 AM, Sensex was trading at 81,626.28, down 0.17 per cent, while the Nifty was trading at 24,655.10, down 0.22 per cent.
RBI MPC Policy LIVE: Current account deficit to stay at sustainable levels in FY25, says Shaktikanta Das
The RBI Governor expressed confidence that the country's current account deficit is likely to stay at sustainable levels in the current financial year.
A current account deficit, which occurs when a country spends more money than it receives, is the shortfall between the money paid for imports and the money received for exports.
Simply put, it is the difference between the value of exports and that of imports.
RBI MPC December Meeting: How will today's announcements impact market?
Market guru Anil Singhvi is of the view that:
- The market will like a CRR cut, if it materialises
- A rate cut will be even better
- Even if the RBI does not cut repo rate or CRR today, a clear signal for a rate cut in the next policy will reflect positively on Dalal Street
- The market will be disappointed if the RBI ignores slowing growth and looks underconfident in controlling inflation
- It is a make-or-break session for Nifty Bank
- A good policy will help banking index scale a fresh high above the 54,500 mark
- A bad policy may trigger a correction in Nifty Bank given its near-one-way rally of 4,000 points
- Market participants should reduce their long positions if Nifty closes below 52,600 after the RBI's policy announcements
- A close above 54,375 will lead to more upside in the banking index
RBI MPC December Meeting: What to watch out for?
Zee Business Managing Editor Anil Singhvi has highlighted the following important points:
- The market only wants to hear growth, growth and growth from the RBI Governor
- What will be important to track is any clue on how concerned the RBI is about slowing growth and what it plans to do to boost it to higher levels
- Market participants want to know how confident the RBI is of taming inflation and how soon it can bring it under control
- All eyes will also be on any measure to rescue slowing credit growth in the banking system
- A big challenge is to balance growth and inflation
- The market keenly awaits the RBI's take on the repo rate, inflation and growth going forward
Indian stock market opens flat ahead of RBI MPC decision
The Indian stock market opened flat on Friday ahead of the announcement of the RBI's monetary policy committee (MPC) meeting. The market is keeping a close eye on the decision around repo and CRR rates.
RBI MPC Policy Review LIVE: Can you expect the RBI to change its GDP and inflation forecasts today?
According to Zee Business research, all of the economists polled expect the RBI to tweak its inflation as well as GDP forecasts in the December review.
Markets set for a positive opening as GIFT Nifty hints at gains; RBI policy decision in focus
Domestic headline indices Sensex and Nifty are poised for a positive opening on Friday, supported by cues from GIFT Nifty, which traded higher by 39.50 points or 0.16 per cent at 24,804.50.
However, volatility is expected to dominate as investors await the Reserve Bank of India’s (RBI) monetary policy announcement later today.
What is the repo rate? Does it impact you?
The repo rate, short for repurchase rate, is the rate at which central banks lend money to commercial banks.
It is one among the several monetary policy tools available to a central bank that are crucial in regulating the economy and controlling inflation.
The repo rate—or the key interest rate—serves as a benchmark for the interest rates that banks offer to borrowers for various financial products, such as home loans, auto loans, and fixed deposits (FDs).
The repo rate directly influences the interest rates on loans and other financial products offered by banks.
When the central bank reduces the repo rate, banks can borrow money at a lower cost.
As a result, banks may lower the interest rates on loans such as home loans, car loans and other auto loans, and personal loans.
RBI MPC Policy Review LIVE: What happened in October policy review?
In October, the MPC unanimously switched to a 'neutral' policy stance from 'withdrawal of accommodation' while voting 5:1 to keep the repo rate intact.
A neutral stance allows the RBI to move on either side with rates based on domestic macroeconomic conditions.
Additionally, the RBI maintained its full-year GDP and inflation projections at 7.2 per cent and 4.5 per cent respectively, while tweaking some of the quarterly projections.
RBI MPC Policy Review LIVE: When can you expect the first rate cut?
Economists are also divided over the timing of the next rate cut.
According to Zee Business research, six out of every 10 economists expect the first rate cut to be in February, while two expect it in December itself, and the remaining two neither in December nor February.
RBI MPC Policy Review December: Will there be a cash reserve ratio (CRR) cut?
According to Zee Business research, six out of every 10 economists polled expect a reduction in the cash reserve ratio in today's policy.
What is the cash reserve ratio?
It is another important tool used by the RBI.
The CRR determines the percentage of deposits that commercial banks must hold as cash reserves, rather than using them for lending.
Currently, the CRR stands at 4.5 per cent.
RBI MPC December Review LIVE: What makes today's policy announcements important?
While the market has been anticipating a reduction in the repo rate over the past few weeks, the latest inflation and GDP readings have convinced many that the RBI may not find enough room to cut lending rates as yet.
The country's GDP growth has slowed to a 7-quarter low pace while consumer inflation has crossed the upper band of the RBI's target range of 2-6 per cent.
RBI MPC December Review LIVE: Nomura maintains out-of-consensus call
Foreign brokerage Nomura expects a 25-basis-point reduction in the repo rate, to 6.25 per cent, in today's policy announcements.
The RBI Governor is set to announce the key policy decisions at 10 am today.
Shaktikanta Das will also interact with the media in a customary press conference at noon.
RBI MPC December Review LIVE: Can you expect a repo rate cut today?
Well, most economists think the RBI may refrain from lowering the repo rate in today's policy.
Eight in every 10 economists polled by Zee Business expect no change in the repo rate in the December review.
RBI MPC December Review LIVE: Today's policy review marks the last scheduled meeting of 2024
Yes, this is going to be the last scheduled bi-monthly policy review of the calendar year.
The RBI meets six times every year.
These are known as scheduled bi-monthly policy reviews.
In case of economic or financial emergencies, the RBI's MPC--the central bank's rate-deciding panel--convenes additional meetings.
Such meetings are outside the normal bi-monthly review cycle.
RBI MPC December Review LIVE: What makes today's policy announcements important?
While the market has been anticipating a reduction in the repo rate over the past few weeks, the latest inflation and GDP readings have convinced many that the RBI may not find enough room to cut lending rates as yet.
The country's GDP growth has slowed to a 7-quarter low pace while consumer inflation has crossed the upper band of the RBI's target range of 2-6 per cent.
RBI MPC December Review LIVE: Will Shaktikanta Das-headed MPC cut repo rate today?
At 10 am, the RBI Governor is set to announce key decisions by the Monetary Policy Committee at the end of a three-day bi-monthly meeting.
This is the last scheduled policy review of the calendar year.
RBI MPC December 2024 Review, Rate Decision Due Today
Welcome to Zeebiz.com's blog on the RBI's December 2024 policy review
Will the Reserve Bank of India (RBI) cut or hold the repo rate today?
The repo rate is the key interest rate at which the RBI lends short-term funds to commercial banks.
Currently, the repo rate stands at 6.5 per cent.
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