rbi-monetary-policy-2024

RBI Monetary Policy 2024

New Delhi, December 2024.

There is nothing that cannot be attainted by patience and equanimity, RBI Governor Shaktikanta Das said at the Monetary Policy Committee meeting.

Shaktikanta Das-led MPC decided to keep the benchmark repo rate unchanged at 6.5% and maintained its neutral stance. In a bid to ease liquidity pressures, the committee also reduced the Cash Reserve Ratio by 50 basis points to 4%..

The standing deposit facility remains at 6.25%, and both the marginal standing facility rate and bank rate have been kept unchanged.

Despite inflation exceeding the RBI's target range of 4 (+/- 2)%, it is expected to ease in the coming months, aided by fresh market arrivals. However, food price pressures may continue to keep inflation elevated in the short term. The MPC remains committed to balancing growth and inflation in the broader interest of the economy, he said.

ADITI GUPTA, ECONOMIST, BANK OF BARODA, MUMBAI

"RBI's rate decision was in line with our expectations. While noting risks to the growth outlook, the Governor stressed the need of maintaining a favourable inflation and growth balance."

"With inflation expected to moderate in the coming months, we believe that a rate cut in February 2025 looks most likely."

SHISHIR BAIJAL, CHAIRMAN AND MANAGING DIRECTOR, KNIGHT FRANK INDIA, MUMBAI

"The continued shift towards a neutral stance suggests that the central bank's focus is gradually moving from inflation control to supporting growth."

"At this point, a rate cut would be more beneficial for consumers, including home buyers, as borrowing costs remain high despite the unchanged repo rate. The growth in home loans has slowed, and consumption among lower-income groups has significantly decreased, as witnessed in sharp moderation in sales of affordable housing."

Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank said, “The RBI delivered in line with our expectations. While retaining its focus on last mile disinflation being achieved the RBI has taken note of the tightening durable liquidity and hence delivered the CRR cut. We see room for a 25-basis points repo rate cut in February with much dependent on the downside risk to growth which we foresee. Further disinflationary trends and global environment will also be key.”

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