RBI MPC Live Updates: Governor Das To Announce Interest Rate Decision Today
India gears up for the much-awaited key interest rate decision by the Reserve Bank of India's Monetary Policy Committee on Friday, as pressures build upon the central bank to ease liquidity to revive growth.
Of the 25 economists polled by Bloomberg, 21 expect the MPC to maintain the status quo for the eleventh straight meeting. The benchmark lending rate, or the repo rate, is expected to remain unchanged at 6.5%.
Pressure is mounting on the Reserve Bank of India to announce liquidity injections and keep local borrowing costs anchored, after a shocking slowdown in last quarter's economic growth.
Economists expect easier liquidity conditions and a possible cut in cash reserve ratio by the RBI, which has already sent the benchmark 10-year bond yield to near three-year low.
The six-member Monetary Policy Committee, headed by RBI Governor Shaktikanta Das, started its meeting to decide on the next set of bi-monthly monetary policy on Dec. 4.
It last hiked the repo rate to 6.5% in February 2023 and since then it has held the rate at the same level.
RBI MPC Live Updates: Growth Slows To Seven-Quarter Low
Gross Domestic Product grew 5.4% in the second quarter—slowest in nearly two years—led by slower growth across the industrial sector and compared to 6.7% in the April-June quarter.
Gross Value Added, which strips out indirect tax and subsidies, is estimated to have grown 5.6%, compared to 6.8% in the preceding quarter.
Alongside slower growth in industrial GVA led by manufacturing, private consumption, capex saw slower growth compared to the first quarter, as per expenditure wise trends.
The lower-than-estimated GDP growth prompted economists across the board to lower GDP forecasts for the full year, despite expectations of a sequential uptick in the second half of the fiscal. The RBI, too, is expected to lower its GDP growth forecast of 7.2% for the full fiscal.
RBI MPC Live Updates: Retail Inflation At 14-Month High In October
CPI inflation breaching the upper limit of RBI's tolerance band in October is not a favourable backdrop for the MPC to commence the easing cycle, even as the growth outcome in Q2 FY25 disappointed MPC's expectation, Barclays said.
"That said, we do not think the MPC's decision will be unanimous, and think it is likely that more than one member may dissent in the meeting."
High-frequency indicators for food prices show softer momentum almost across the board for nonperishables in November, though vegetable prices show only limited softening.
At the upcoming meet, the RBI could raise the third quarter inflation forecast upwards by about 80-100 basis points, but also trim fiscal 2025 GDP growth forecast by about 70 basis points.
RBI MPC Live Updates: Central Bank To Surprise With 25 Bps Cut, Says Nomura
Nomura expects the Reserve Bank of India to announce a 25 basis point repo rate cut in its Dec. 6 Monetary Policy Committee meeting decision announcement, as per its latest report. If the forecast holds true, this would bring the benchmark repo rate down to 6.25%.
While 42 of 49 economists surveyed by Bloomberg anticipate no change, Nomura assigns a 75% probability to its prediction, underscoring its confidence in a pivot towards rate easing. The brokerage further expects100 bps in total cuts by mid-2025, bringing the repo rate to 5.50%.
Nomura cited a sharp slowdown in India's GDP growth and subdued forward inflation outlook as key drivers for the expected cut. This fiscal's second quarter GDP growth slumped to 5.4% year-on-year, down from 6.7% in the first quarter, pointing to a significant decline in private demand.
RBI MPC Live Updates: Rupee Opens Stronger Ahead Of Interest Rate Decision
The India Rupee opened stronger ahead of the Reserve Bank of India's monetary policy decision that will be announced shortly by Governor Shaktikanta Das.
The domestic currency strengthened 7 paise to 84.66 against the dollar, according to Bloomberg data. The rupee closed at 84.73 against the greenback on Thursday.
Of the 25 economists polled by Bloomberg, 21 expect the MPC to maintain the status quo for the eleventh straight meeting. The benchmark lending rate, or the repo rate, is expected to remain unchanged at 6.5%.
The Rupee could gain support from the RBI’s efforts to manage liquidity in the banking system, according to Amit Pabari, managing director, CR Forex Advisors. "We anticipate the Rupee’s downside to remain capped at 85, with the USDINR pair expected to trade within the range of 84.50 to 85 in the short term."
The Indian rupee is expected to open a tad stronger after the Central Bank sold dollars at 84.75 levels and ensured it stayed in the range of 84.70 to 84.75, Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said. "As the RBI announces policy rates amidst acweaker currency and stronger markets the range for rupee is expected between 84.60-84.80."
The dollar index—which tracks the greenback's performance against a basket of 10 leading global currencies—was trading 0.07% higher at 105.78.
International benchmark Brent oil was priced 0.15% down at $71.98 per barrel after US imposed more sanctions on Iranian crude. West Texas Intermediate was up 0.09% higher at $68.24 a barrel.
RBI MPC Live Updates: Yield On The 10-Year Bond Opens Flat
The yield on the 10-year bond opened flat at 6.68%.
It closed at 6.68% on Thursday.
Source: Bloomberg
RBI MPC Live Updates: Markets To See CRR Cut Definitely, Says JPMorgan's Jahangir Aziz
India will most likely see a rate cut but will "definitely" see a cut in the cash reserve ratio, according to Jahangir Aziz, Head-Emerging Market Economics at JPMorgan.
Consumption is growing on significant income transferred promised by state governments, he told NDTV Profit in an interview. "Consumption isn't weak in India, real income is weak."
India's central bank will do what is important for India, not necessarily follow US Fed he said adding that almost all central banks who've met in the last two to three weeks have cut rates.
Cutting rates right now could spike inflation while RBI is struggling to stabilize exchange rate, he said. A lot of liquidity has been taken out of the markets, he added.
Cash Reserve Ratio is the specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank.
RBI MPC Live Updates: Nifty, Sensex Open Slightly Higher Ahead Of Policy Decision
The NSE Nifty 50 and BSE Sensex opened with marginal gains on Friday as ICICI Bank Ltd. and Trent Ltd. share prices led.
Market participants exercised caution before the outcome of the Reserve Bank of India's Monetary Policy Committee policy decision.
As of 09:18 a.m., the Nifty 50 was trading 11.35 points or 0.05% down at 24,697.05, and the Sensex was trading flat at 81,752.29.
"On the global front, markets traded with mixed sentiment, while buying activity from FIIs suggests a positive momentum for the domestic market in the coming sessions," said Hardik Matalia, research analyst, Choice Broking
RBI MPC Live Updates: Bond Yields Near Three-Year Low On Likely Liquidity Boost
The yield on India's benchmark 10-year bond is on track to hit a three-year low in hopes of a liquidity boost via a quasi-rate cut in the upcoming monetary policy meet outcome, as economic woes deepen.
The yield on the 10-year bond opened flat after closing at 6.68% in the previous session. The yields have been on a decline throughout the year, and are nearing the nearly three-year low of 6.66%, previously seen in February 2022.
Since the latest GDP data was announced, the yields on the short-term two-year paper slipped by 2 basis points to 6.6%, while the long-term security fell by 5 basis points to 6.81 on Thursday.
Bond yields usually move in the direction of the policy rate as more liquidity makes bonds more attractive to investors.
The Reserve Bank of India's monetary policy committee will meet from Wednesday to Friday to decide on the key policy rates after the country's economic growth fell to the slowest in nearly two years.
RBI MPC Live Updates: Rate Cuts Likely To Start In February, Say Brokerages
The Reserve Bank of India is seen holding its repo rate for the eleventh straight meeting in December and brokerages do not expect a rate cut until February. However, they expect the regulator bank to act towards liquidity easing through unconventional policy tools.
BofA's report said that despite seeing a very weak GDP growth print, the RBI appears set to be on hold, but the MPC decision could be more contested than previous meetings, with more than one members voting for a rate cut.
Emkay Research said the massive GDP undershoot has meant that the policy trade-offs have become even more acute as the economy looks to be in a stagflationary state.
The brokerage also expects a CRR reversal to pre-Covid 4% level, implying an infusion of Rs 1.2 lakh crore at a time when core liquidity may steadily move to a deficit ahead with unsterilised forex intervention and CIC leakages.
Read more here.
MPC Live Updates: Governor Das Arrives At RBI Headquarters
Reserve Bank of India's Governor Shaktikanta Das arrived at the headquarters ahead of the MPC decision. Of the 25 economists polled by Bloomberg, 21 expect the MPC to maintain the status quo for the eleventh straight meeting. The benchmark lending rate, or the repo rate, is expected to remain unchanged at 6.5%.
The six-member Monetary Policy Committee, headed by RBI Governor Shaktikanta Das, started its meeting to decide on the next set of bi-monthly monetary policy on Dec. 4.
Watch RBI MPC Decision Live Here
The Reserve Bank of India's Governor Shaktikanta Das will shortly announce the key rate decision after a muted second-quarter economic growth, prompting a boost in liquidity.
The six-member Monetary Policy Committee is anticipated to maintain the repo rate at 6.5%, however, a cut in CRR is anticipated by economists.
Log on to NDTV Profit platforms to catch all the live actions.
RBI Live Updates: Price Stability Is Of Paramount Importance, Says Das
Monetary policy is important as it affects every segment of economy and MPC's effort is to follow a flexible inflation target framework, says Governor Shaktikanta Das.
Governor says:
Monetary policy affects vegetable vendors, the middle class, big corporates.
MPC effort is to follow a flexible inflation target framework.
India has been growing at more than 8%.
It is always the effort of RBI, and MPC to follow the provision of law in letter and spirit.
Price stability is of paramount importance.
RBI MPC Live Updates: Repo Rate Unchanged; 'Neutral' Stance Retained
The Monetary Policy Committee has decided to maintain the repo rate at 6.5% for the eleventh time with a 4:2 majority, Reserve Bank of India's Governor Shaktikanta Das said in the press conference.
Governor says:
MPC decided by a majority of 4:2 to keep policy rate unchanged at 6.5%
The standing deposit facility remains at 6.25% and MSF rate, bank rate are unchanged.
MPC decided unanimously to retain "neutral" stance.
MPC took note of recent slowdown in growth momentum.
RBI MPC Live Updates: Committed To Retian Inflation-Growth Balance, Says Das
The Monetary Policy Committee believes that only with durable price stability can strong foundations be secured for high growth, Reserve Bank of India's Governor Shaktikanta Das said in the press conference. The MPC decided to maintain the repo rate at 6.5% for the eleventh time with a 4:2 majority.
Governor says:
Inflation surged above the upper tolerance band in October.
Food inflation is likely to linger in third quarter and start easing in fourth quarter.
High inflation reduces disposable income in hands of consumers, dents private consumption.
Lower consumption impacts real GDP growth
MPC remains committed to retaining an inflation-growth balance in overall interest of economy.
RBI MPC Live Updates: Real GDP For FY25 Cut To 6.6%
Reserve Bank of India has cut the real GDP growth for the ongoing fiscal year to 6.6% from 7.2% earlier, according to Reserve Bank of India's Governor Shaktikanta Das.
The central bank sees GDP growth in the third and fourth quarters at 6.8% and 7.2%, respectively. The growth is projected to be 6.9% in the first quarter of fiscal 2026 and 7.3% in the second quarter of the next fiscal.
RBI MPC Live Updates: CPI Inflation In FY25 Seen At 4.8%
Governor Shaktikanta Das said that the Reserve Bank of India sees India to record a CPI inflation of 4.8% in the ongoing fiscal year, according to to Reserve Bank of India's Governor Shaktikanta Das.
The CPI is seen at 5.7% and 4.5% in the final two quarter in the ongoing financial year while it is seen at 4.6% and 4% in the first and second quarter of the next financial year.
RBI MPC Live Updates: CRR To Be Cut To 4% For All Banks
The Cash Reserve Ratio was cut by the Reserve Bank of India by 50 basis points to 4% to all banks in order to revive the economic growth by improving liquidity.
The CRR will be cut in two tranches in fortnights beginning Dec. 14 and Dec 28 by 25 basis points each, Governor Shaktikanta Das said. CRR cut to result in liquidity increase of Rs 1.16 lakh crore.
Cash Reserve Ratio is the specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank.
RBI MPC Live Updates: 'Exchange Rate policy Remains Consistent And Market-Determined'
The Reserve Bank of India's exchange rate policy has remained consistent and is market-determined, Reserve Bank of India's Governor Shaktikanta Das said in a press conference after maintaining status quo on repo rates.
Governor says,
Foreign exchange reserves are deployed judiciously.
Efforts to deepen, and modernise the forex market have yielded significant results.
The overall approach ensures forex acts as shock absorbers.
Flexible or market-determined exchange rate regime is important element to ensure market, macro stability.
RBI MPC Live Updates:RBI MPC Live Updates: Financial Sector Health At 'One Of Its Best In Long Time'
The financial parameters of banks and financial institutions continue to be strong and the financial sector health is at "one of its best in a long time," Reserve Bank of India's Governor Shaktikanta Das said in a press conference.
Governor says,
The health of financial sector is perhaps at one of its best in a long time
RBI's supervision of the financial sector continues to be vigilant, proactive.
Continuous engagement is held over several months with regulated entities.
Only in extreme cases, RBI resorts to the imposition of business restrictions as a last resort.
There are a large number of entities where corrective action is taken.
To address issues of unclaimed deposits, and frozen accounts due to KYC issues, banks advised to take necessary steps.
RBI MPC Live Updates: India's External Sector Remains Resilient, Says Das
India's merchandise exports expanded at 28-month high in October and continue to remain resilient, Reserve Bank of India's Governor Shaktikanta Das said in a press conference. Services exports sustained buoyancy in the second quarter, he said.
Governor says,
Current account deficit to remain within sustainable limits in fiscal 2025.
Gross FDI to India increased at robust pace in first half of fiscal 2025.
Foreign portfolio investment inflows to emerging markets have generally declined in October.
India's external sector remains resilient.
In order to attract more capital inflows it has been decided to increase interest rate ceilings on FCNRB deposits.
Banks permitted to raise funds via 1-year FCNRB deposits at 400 bps above overnight Alternative Reference Rate versus 250 bps now.
MPC Live Updates: RBI Increases FCNRB Deposit Rate Ceilings
In order to attract more capital inflows, the Reserve Bank of India has decided to increase interest rate ceilings on foreign currency non-resident bank deposits with immediate effect, Governor Shaktikanta Das said during monetary policy announcement.
Banks are permitted to raise FCNRB deposits of one year to less than three years maturity at rates not exceeding the ceilings of overnight alternate reference rate plus 400 basis points as against from 200 bps at present, Das said.
In addition to the overnight ARR, RBI has increased the spread for banks to 400 bps from a spread of 250 bps currently. Similarly for deposits of 3-5 years maturity, the ceiling has been increased to overnight ARR plus 500 bps as against 300 bps at present.
RBI MPC Live Updates: RBI To Add Podcasts To Its Communication Toolkit
The Reserve Bank of India proposed to add podcasts to its communication toolkit, Governor Shaktikanta Das said during the monetary policy announcement.
Governor says,
Financial sector landscape is witnessing rapid transformation using new technology.
themulehunter.ai has been developed by RBI to hunt "mule accounts", reduce digital fraud.
RBI MPC Live Updates: Key Highlights From December Meet
Repo Rate, SDF, MSF Unchanged: The RBI has kept the repo rate, Standing Deposit Facility and Marginal Standing Facility unchanged.
Neutral Stance Maintained: The Monetary Policy Committee has decided to maintain a neutral" stance on monetary policy.
CRR Cut by 50 bps: The Cash Reserve Ratio was cut by the Reserve Bank of India by 50 basis points to 4% to all banks in order to revive economic growth by improving liquidity.
Real GDP Growth Forecast Lowered: Reserve Bank of India has cut the real GDP growth for the ongoing fiscal year to 6.6% from 7.2% earlier.
CPI Inflation Forecast Revised: The Consumer Price Index inflation for FY25 is now expected to be 4.8%, up from the earlier projection of 4.5%.
MPC Live Updates: Rupee Strengthens Sharply After RBI's Liquity Boost Measure
The Indian rupee strengthened sharply after the Reserve Bank of India's Monetary Policy Committee took measures to inject additional liquidity via various instruments.
The local currency rose 16 paise against the US dollar to 84.57 on Friday, after opening at 84.66, according to Bloomberg data. The rupee closed at 84.73 on Thursday against the greenback.
The RBI has decided to increase interest rate ceilings on foreign currency non-resident bank deposits with immediate effect, providing means for more foreign deposits to come into banks.
Further, the central bank slashed the cash reserve ratio by 50 basis points to 4% to all banks in order to revive economic growth by improving liquidity.
Cash Reserve Ratio is the specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank.
RBI MPC Live Updates: Bank Limits For Collateral-Free Agri Loans Increased
The Reserve Bank of India has increased the limit for collateral free agricultural loans to Rs 2 lakh per borrower from Rs 1.6 lakh, Governor Shaktikanta Das said during the announcement of the monetary policy.
The last time the central bank had revised these limits was in 2019 from Rs 1 lakh set in 2010 to Rs 1.6 lakh. The latest revision has come on the back of a rise in agricultural input costs and overall inflation.
MPC Live Updates: RBI Launches AI-Based MuleHunter.AITM To Detect Mule Accounts
The Reserve Bank of India has encouraged banks to collaborate with its subsidiary Reserve Bank Innovation Hub on its new initiative--MuleHunter.AITM--to detect mule accounts, a pilot being run based on artificial intelligence and machine learning model, Governor Shaktikanta Das said.
This model enables detection of mule bank accounts in an efficient manner and a pilot with two large public sector banks has yielded encouraging results, according to the statement on developmental and regulatory policies.
RBI MPC Live Updates: Expect No More Than 50 Bps Cut This Cycle, Says Rajiv Anand
The Reserve Bank of India's Monetary Policy Committee is unlikely to cut repo rates by more than 50 basis points in the current rate-cutting cycle, according to Rajiv Anand, Deputy Managing Director at Axis Bank.
The CRR cut will positively impact margins of banks by three to five basis from the fourth quarter of this fiscal, Anand said adding that its a "welcome relief" that should help credit growth. "Expect 4% inflation by February and the rate cut cycle will be very shallow."
Rajiv Anand Says,
RBI has kept their eye on inflation, which is the prudent thing to do.
CRR cut will bring down deposit rates.
Expect short-term rates to come down.
Repo rate cut has been pushed, which is prudent.
Palpable slowdown in the economy is visible.
RBI MPC Live Updates: What Does A CRR Cut Mean?
India's Monetary Policy Committee, led by RBI Governor Shaktikanta Das, cut the Cash Reserve Ratio by 50 basis points to 4% on Friday.
The CRR is the percentage of total deposits a scheduled commercial bank must have in cash to operate risk-free.
The Reserve Bank of India decides the amount and keeps it for financial security. The bank cannot use this amount for lending and investment purposes and does not get any interest from the RBI on it.
A cut in the CRR frees up money for banks to lend, boosting credit growth in the economy.
RBI MPC Live Updates: Governor Addresses The Press
Governor Shaktikanta Das starts the presser saying he has five observations.
MPC remains committed to restoring balance between inflation, growth, which has got unsettled recently.
RBI will use various policy instruments to create conditions for restoring inflation-growth balance.
Credibility of inflation-targeting framework needs to be preserved.
Inflation has to be brought down in the interest of sustainable growth.
Prudence, practicality and timing will continue to be guiding principles for RBI's future actions.
RBI MPC Live Updates: Timely Action Is Key
Addressing the press, Das noted that, "Timing of actions is the key," and that the second half of the financial year will be better in terms of growth. Actions like rate cuts and liquidity measures need to be well-timed, he added.
"Actions like rate cuts and liquidity measures need to be well-timed," the RBI Governor said.
RBI MPC Live Updates: Das Refuses To Speak On His Term As Governor
The Governor declined to comment and said, "I am not giving you any headlines today,"
RBI MPC Live Updates: Governor Speaks On Inflation
In the previous MPC, Governor Das had compared inflation to a horse ready to bolt. He answered today saying, "Horse has made a very valiant effort to bolt; our attempt is to keep it on a tight leash."
Our effort is always to follow the legal mandate given to us on inflation and growth, he added.
RBI MPC Live Updates: JPMorgan Flags Potential February Rate Cut
JP Morgan views India's MPC decision to hold rates as dovish, with a 50 bps CRR cut that "opens door" to a February rate cut, contingent on inflation tracking the RBI's projections.
A rate cut would be unlikely if RBI raises its inflation forecast at the same time. JP Morgan sees modest downside risks to the 6.6% GDP growth forecast, with the RBI likely to act on growth once more confident in CPI trends. The CRR cut will release Rs 1.16 trillion in durable liquidity into the system.
RBI MPC Live Updates: No Room For Knee-Jerk Reactions, Says Das
In the life of a central bank, there is no room for knee-jerk reactions, Governor Shaktikanta Das in a press conference with reporters after keeping the key benchmark rates unchanged. The RBI expects tight liquidity in the remainder of the financial year, he said.
Governor says,
Our effort is always to follow the legal mandate given to us on inflation and growth.
We need more credible evidence on what the outlook is likely to be.
Whatever action we take must be well-timed.
I think we have managed to remain in-line with the curve on monetary policy
RBI MPC Live Updates: Time To Normalise CRR As It Served Its Purpose, Says Das
The CRR increase was done in April 2022 as a temporary measure, Governor Das said adding that it has "served its purpose and it was time to normalise it."
The central bank slashed the cash reserve ratio by 50 basis points to 4% to all banks in order to revive economic growth by improving liquidity.
Governor says,
What the banks use the CRR money for is their call.
We clearly see that liquidity is going to be tight in the latter part of December and going into January.
We don't make monetary policy or liquidity decisions keeping in mind the balance sheet requirements of banks.
RBI MPC Live Updates: No Decision Yet On A BRICS Currency, Says Das
The BRICS currency was an idea that was raised by one of the member countries and "no decision" has been taken on the same, Governor Shaktikanta Das in a press conference with reporters after keeping the key benchmark rates unchanged.
His comments come after US President-elect Donal Trump warned BRICS nations that he would require commitments that they would not move to create a new currency as an alternative to using the US dollar and repeated threats to levy a 100% tariff.
Governor says,
There is no step that we have taken with the intention of de-dollarisation.
We have permitted the opening of Vostro accounts and entered agreements with two countries for local currency trade.
De-dollarisation is not on the table at all; rather it is a narrative in certain sections.
Even if the US increases tariffs, it won't be an isolated event.
Difficult to say what the unilateral move would be in response to higher US tariffs.
RBI MPC Live Updates: 'Forex Reserves Are Quite Robust', Says Das
India's foreign exchange reserves are "quite robust" and the depletion of reserves is because of valuation losses, Governor Shaktikanta Das in a press conference with reporters.
Governor says,
Forex reserves are quite adequate currently.
How the forex market will behave can't be assessed; there are so many uncertainties.
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