RBI Monetary Policy: From Repo Rate To GDP Target And CRR, Five Key MPC Highlights Today
Reserve Bank of India has cut the real GDP growth for the ongoing fiscal year to 6.6% from 7.2%, while cutting CRR to improve liquidity.
The Monetary Policy Committee has decided to maintain the repo rate at 6.5% for the eleventh consecutive time, with a 4:2 majority, announced Reserve Bank of India Governor Shaktikanta Das.
The standing deposit facility remains at 6.25%, and both the marginal standing facility rate and bank rate have been kept unchanged. The MPC also unanimously agreed to retain a "neutral" stance.
Governor Das highlighted the recent slowdown in growth momentum, noting that the committee had taken it into consideration. Emphasising the importance of price stability, he stated that monetary policy impacts every segment of the economy, from vegetable vendors to large corporations.
RBI MPC Meeting: Five Key Highlights
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 Basis Points
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.
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, 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.
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%.
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.
