New Delhi, June 07, 2024.
The
Reserve Bank of India’s Monetary Policy Committee (MPC), which had kickstarted
its meeting on Wednesday, has kept the repo rate unchanged at 6.5 per cent for
the eight consecutive time. This is the first time the MPC met after the
results of the Lok Sabha election were declared.
Addressing a press conference, RBI Governor Shaktikanta Das
revised the GDP (gross domestic growth) projection to 7.2 per cent for FY 25,
up from 7 per cent that it had expected earlier.
Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank Said" RBI’s status quo on rates
and stance was in line with market expectations, but the split in voting
patterns clearly shows the increasing probability towards a pivot in the
policies ahead. However, we believe the robust growth will give enough
opportunity for the MPC to remain on a wait and watch mode until better clarity
comes from monsoons and quality of expenditure from the Budget. We see room for
stance change in the August policy with a plausible easing from October
meeting."
The MPC meeting
outcome was cheered by the equity market, but the debt market didn’t react much
to the MPC meeting announcement. The market would perhaps be more keen to look
for the Union Budget announcement on the government's fiscal roadmap going
forward. Insurance companies with a greater focus on fixed-income portfolios in
their life funds would not have been significantly impacted by this MPC
decision. The equity portfolio of the insurance companies has made some
positive MTM gains, though, said Ajit Banerjee, CIO - Shriram Life Insurance
Company.
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