RBI MPC Highlights: Repo rate unchanged at 6.5%, stance changed to ‘Neutral’

RBI MPC LIVE Updates: RBI Deputy Governor Michael Patra said, “The outlook for crude oil prices is softer than its today because Opec+ is planning to restore production in phased manner through 2025, and international energy estimate that demand for crude oil is softer than it is now, and increasing renewables, so all these factors make out for softer outlook for crude oil price.”

RBI MPC LIVE Updates: RBI governor said, “We have greater confidence that inflation is moderating, but acutely aware there are significant risk. We have changed the stance because growth and inflation are well poised, the balance is well poised. The timing is appropriate for a stance change.”

RBI MPC LIVE Updates: 'Can't say whether deposit rates or credit rates have peaked,' says Shaktikanta Das

RBI MPC LIVE Updates: 'Near-term inflation will remain high, says RBI governor

RBI MPC LIVE Updates: The NSE Nifty Bank index is up 0.51% or 260.30 points in the green to 51,281.30 points after the RBI announced it would be holding rates.

The top three gainers included SBI (2.29%), Axis Bank (1.89%), and Punjab National Bank (1.84%).

RBI MPC LIVE Updates: Boman Irani, President of CREDAI National said, "As RBI remains cautious regarding potential inflationary pressures, the central bank’s decision to keep the repo rate unchanged at 6.5% - albeit with a revised neutral stance - seems somewhat like a missed opportunity, especially with the festive season around the corner. With GDP growth clocking in at 6.7% in the last quarter, lesser than RBI’s target of 7%, a rate cut at this juncture would have provided the ideal boost to accelerate consumer demand across industries - positively impacting economic growth going into Q3 FY 2025. The housing sector, in particular, typically experiences a surge in homebuyer interest and transactions during the festive season and with the sector’s unique multiplier effect in play, a rate cut would have enabled real estate to have an even bigger compounding impact on India’s GDP growth and other macro-economic indicators. CREDAI remains hopeful that the central bank will cut rates in the next quarter and provide further momentum to the economic growth and demand across sectors"

RBI MPC LIVE Updates: Sujan Hajra, Chief Economist & Executive Director, Anand Rathi Shares and Stock Brokers said, "The change in stance was expected. This signals the start of an easing cycle, but as Governor Das emphasized, while the inflation "horse" has been brought back into the stable, the central bank will be cautious in opening the gates, lest the horse leaps out again. The latest set of growth and inflation projections from the RBI suggest they are confident that growth will sustain. Combined with the increase in the Q3 FY24 inflation projection, this implies they are willing to maintain the current stance and may wait to see further inflation reductions later in the fiscal year. We believe that if macro indicators continue to remain weak through October-December 2024, the probability of a rate cut in December 2024 will increase. However, if growth picks up—now that the monsoon season is over and government spending resumes—the central bank may wait until February 2025 before cutting rates."

RBI MPC LIVE Updates: RBI Governor Shaktikanta Das said, “At present, UPI and Immediate Payment Service (IMPS) provide a facility for the remitter of funds to verify the name of the receiver (beneficiary) before executing a payment transaction. It is now proposed to introduce such a facility for the Real Time Gross Settlement System (RTGS) and the National Electronic Funds Transfer (NEFT) system. This facility will enable the remitter to verify the name of the account holder before effecting funds transfer to him/her through RTGS or NEFT. This will also reduce the possibility of wrong credits and frauds.”

RBI MPC LIVE Updates: RBI Governor Shaktikanta Das said, "System liquidity remains in surplus during August and September and also in early October with a pickup in govt expanding and decline in currency-in-circulation. Liquidity conditions however turned into deficit for a brief period during the latter half of September with the build-up of govt cash balances on account of tax-related outflows..."

RBI MPC LIVE Updates: RBI Governor Shaktikanta Das said, "To further encourage wider adoption of UPI and make it more inclusive, it has been decided - first, to enhance the per transaction limit in UPI -1,2,3 pay from ₹5,000 to ₹10,000 and second, it has also been decided to increase the UPI lite wallet limit from ₹2,000 to ₹5,000..."

RBI MPC LIVE Updates: The Reserve Bank proposes to create a data repository, namely the Reserve Bank climate risk information system, RBI governor Shaktikanta Das said.

RBI MPC LIVE Updates: In his policy announcement today, the RBI governor quoted Mahatma Gandhi and said, “If the method is good, success is bound to come.”

RBI MPC LIVE Updates: Shaktikanta Das said that the monetary policy decision made today reflects the Monetary Policy Committee's (MPC) assessment that, “given the current circumstances, it is prudent to maintain greater flexibility and optionality in alignment with evolving conditions and the broader economic outlook.”

RBI MPC LIVE Updates: Shaktikanta Das said that India's current account deficit (CAD) widened to 1.1% of GDP in the first quarter. “However, buoyancy in services exports and strong receipts are anticipated to keep the CAD manageable,” he noted.

RBI MPC LIVE Updates: Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd, said, “The RBI's decision to hold rates steady aligns with expectations, to keep inflation under check. While the recent rate cut by the US Federal Reserve has sparked similar hopes in India, the domestic situation remains distinct, with the central bank prioritizing inflation management within its target range. Yet policy stability bodes well in the ongoing festive season which promises to be a significant phase in terms of real estate demand as the industry is hopeful of the continued rise in residential sales. As and when a rate cut is anticipated soon, which, when implemented, will benefit both homebuyers and real estate developers to capitalize on the market and strengthen overall economic growth.”

RBI MPC LIVE Updates: Shaktikanta Das said that the Reserve Bank of India has proactively engaged in two-way operations to manage liquidity over the past two months. As a result, yields on three-month T-bills and commercial papers have eased, while the yields on 10-year G-Sec have softened in response to global cues. Additionally, the term premium has remained stable in recent months, and the transmission of rates to the credit market has been satisfactory.

RBI MPC LIVE Updates: The RBI governor said, “Some NBFCs, including microfinance institutions and housing finance companies, are chasing excessive returns on their equity. These practices are sometimes further accentuated by what appears to be a push effect, as business targets drive retail credit growth rather than its actual demand.”

RBI MPC LIVE Updates: Mohit Jain, Managing Director, Krisumi Corporation, said, “The apex bank's stance to keep the rates unchanged for the tenth consecutive time is on the expected lines. While the real estate industry was hoping for an interest rate reduction, a status quo is the next best outcome for the industry. Stable rates ensure consistent EMIs, giving homebuyers the confidence to plan their purchases. Furthermore, the expectation of potential rate cuts in the coming months is also boosting optimism in the real estate market and we expect the robustness in demand to continue over the next few years.”

RBI MPC LIVE Updates RBI close monitoring stress buildup in unsecured loan segments, RBI governor said, adding, “There has been some recent commentary on the likelihood of stress buildup in a few unsecured loan segments, like loans for consumption purposes, microfinance, loans and credit card outstandings. The Reserve Bank is closely monitoring the incoming. Recent commentary on stress in MFI, credit card, consumer loans is being tracked by RBI, will take corrective actions if necessary, he said. Banks need to be careful with underwriting; continued attention needed on inoperative deposit account, cyber security, mule accounts.”

RBI MPC LIVE Updates: Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd, said, “The RBI's decision to hold rates steady aligns with expectations, to keep inflation under check. While the recent rate cut by the US Federal Reserve has sparked similar hopes in India, the domestic situation remains distinct, with the central bank prioritizing inflation management within its target range. Yet policy stability bodes well in the ongoing festive season which promises to be a significant phase in terms of real estate demand as the industry is hopeful of the continued rise in residential sales. As and when a rate cut is anticipated soon, which, when implemented, will benefit both homebuyers and real estate developers to capitalize on the market and strengthen overall economic growth.”

RBI MPC LIVE Updates: The exchange rate of the Indian rupee has remained largely range bound, RBI governor said adding that Indian rupee is the least volatile among emerging market currencies, reflecting strong macro economic fundamentals.

RBI MPC LIVE Updates: Ashish Agarwal, director, AU Real Estate, said, “As a real estate developer, we celebrate the Reserve Bank's decision to keep the repo rate unchanged at 6.5%. This stability is a festive gift for homebuyers, allowing them to secure their dream homes during this auspicious season. With affordable financing options, potential homeowners can take advantage of attractive offers and incentives that developers provide during festivals. The unchanged rate not only enhances consumer confidence but also ensures that the joy of homeownership is within reach for many families. We believe this environment will lead to increased sales and a thriving real estate market, making it an ideal time for buyers to invest in their future.”

RBI MPC LIVE Updates: RBI governor said, “Significant risks to inflation from adverse weather events, accentuating geopolitical conflicts, and the very recent increase in certain commodity prices continue to stare at us.”

RBI MPC LIVE Updates: RBI governor said, “Inflation horse has been bought close to stable, we must keep the horse at tight leash. Inflation is closer to the target, within the tolerance band compared to its highest or heightened levels two years ago.”

RBI MPC LIVE Updates:

1. CPI inflation projected at 4.1% in Q2
2. Expected to rise to 4.8% in Q3
3. Anticipated at 4.2% in Q4 and projected at 4.3% in Q1 FY26