New Delhi, October 09, 2024

The Reserve Bank of India (RBI) announced its fourth bi-monthly monetary policy for FY25 today, October 9. After a three-day meeting of the six-member RBI Monetary Policy Committee (MPC), the RBI Governor Shaktikanta Das announced that the rate-setting panel decided to keep the benchmark repo rate unchanged at 6.5% for the tenth straight meeting. However, the MPC changed the policy stance to ‘Neutral’ from ‘withdrawal of accommodation’. FY25 GDP growth estimates were retained at 7.2%, while CPI Inflation forecast for FY25 remained at 4.5%. Stay tuned to our RBI policy live blog for the latest updates.

We continue to see the possibility of a rate cut in Q4 2024. Despite the governors’ emphasis that monetary policy decisions are driven primarily by domestic considerations, we think that any rate cut action could end up being aligned with the timing of the Fed’s rate cut cycle to limit financial market volatility, said Abheek Barua, Chief Economist and Executive Vice President, HDFC Bank.

“RBI’s decision to hold rates while changing the stance to neutral is completely in line with our expectations. The tone of the Governor remains fairly balanced keeping further decisions data dependent. We continue to expect the onset of rate easing from December with a 25bps cut but the scale of easing in this cycle is expected to be shallow with limited scope for back-to-back easing in each policy. Said ” Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank.

RBI had identified certain deficiencies in the operations of gold loan companies. We have set a specific timeline for these companies to address and rectify the discrepancies, said RBI Deputy Governor Swaminathan J.

“The RBI’s shift to a ‘neutral’ stance marks a pivotal step in its approach, providing more flexibility in navigating the evolving economic conditions. With food inflation easing and the monsoon being favorable, this change signals optimism for India’s inflation outlook. Globally, trends such as the US Federal Reserve’s rate cut and easing monetary policies further support this shift. By adopting a more neutral position, the RBI is positioning itself to respond dynamically to future developments, while continuing to foster economic stability and long-term business confidence.”Said Anu Aggarwal, Head of Corporate Banking, Kotak Mahindra Bank