RBI MPC meeting highlights: RBI keeps repo rate unchanged at 6.5%, cuts CRR to 4%

RBI MPC meeting live updates: The MPC decision announcement and press conference has been concluded.

The RBI decided to keep the repo rate unchanged at 6.5%, making it the 11th consecutive time the repo rate has remained unchanged.

Meanwhile, the cash reserve ratio (CRR) has been cut by 50 basis points to 4%.

This came as a balancing act when India's inflation surged to 6.2% in October 2024, breaching the RBI's tolerance limit and gross domestic product (GDP) growth slowed down to 5.4% for the July-September quarter.

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RBI MPC meeting live updates: “We expect tight liquidity in the next few months,” RBI Governor Shaktikanta das said.

RBI MPC meeting live updates: “If you look at the supply side, manufacturing is the main issue,” RBI Deputy Governor Michael Patra said referring to the fall in GDP growth.

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RBI MPC meeting live updates: Rajeev Radhakrishnan, CIO - Fixed Income, SBI Mutual Fund said, “While being cognisant of the incoming growth inflation mix, prudence and practicality required the RBI to address the issue of declining core liquidity. The CRR cut by 50 Bps provides adequate signalling with respect to the direction of monetary policy going forward. In the near term we could anticipate other fine tuning liquidity measures such as repo auctions apart from screen-based OMO in case core liquidity tightens further. Given the Q2FY26 CPI projections, in the absence of any incremental inflation shocks, the Feb review could be live for a repo rate reduction.”

RBI MPC meeting live updates: The post-monetary policy press conference will begin in 30 minutes.

RBI MPC meeting live updates: Raghvendra Nath, MD, Ladderup Wealth Management, said, "We anticipate that supporting growth will become a priority, provided there are no significant negative shocks to inflation. We believe that the RBI will initiate a rate cut cycle starting in February 2025."

RBI MPC meeting live updates: The Indian stock market was in the green, though not rallying after RBI Governor Shaktikanta das announced the RBI MPC decision to keep the repo rate unchanged at 6.5% and cut the CRR by 50 basis points to 4%.

The benchmark BSE Sensex was up 0.10 % or 84.81 points, reaching 81,850.67 at 11 am IST while the broader NSE Nifty was up 0.07% or by 17.05 points reaching 24,725.45.

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RBI MPC meeting live updates: K V Srinivasan, Director and CEO at Profectus Capital said, "The RBI has maintained status quo, clearly expressing its discomfort on inflation levels. With GDP growth rates moderating and with private sector capital expenditure yet to pick up, perhaps they would signal soft interest rates sometime in the near future. CRR reduction by 50 bps should improve liquidity during the busy season, which should help with working capital management. The MSME sector would greatly benefit from a benign interest rate regime and have much more incentive to upgrade and modernise operations, leading to a significant competitive advantage."

RBI MPC meeting live updates: Anirudh Garg- Partner and Fund Manager at Invasset PMS said, "The RBI’s decision to keep the repo rate unchanged at 6.5% for the eleventh straight meeting reflects a prudent and calculated approach in the current economic environment. As inflationary pressures persist, particularly in food prices, the central bank’s focus on price stability aligns with its commitment to maintaining economic resilience. The upward revision of the inflation forecast to 4.8% for FY25 indicates the RBI’s cautious optimism, acknowledging supply-side challenges while aiming to anchor expectations.

The projected GDP growth of 6.6% for FY25 signals underlying strength in the economy, supported by a recovery in high-frequency indicators and sustained demand across key sectors. The CRR reduction, releasing ₹1.16 lakh crore into the banking system, is a welcome move to boost liquidity and support credit growth, especially for sectors such as infrastructure and housing.

From an investment perspective, the RBI’s neutral stance provides much-needed stability. For fund managers, this is an opportune moment to focus on sectors poised to benefit from sustained domestic demand and India’s long-term growth trajectory. While global headwinds remain a concern, India’s strong macroeconomic fundamentals and policy continuity offer a robust foundation for investors to navigate the current landscape with confidence."

RBI MPC meeting live updates: Anshul Jain, Chief Executive India & SE Asia & APAC Tenant Representation, Cushman & Wakefield, said "Amidst lingering inflationary concerns, RBI has decided to keep the repo rate unchanged at 6.5% for the 11th consecutive time, despite GDP growth tapering to 5.4% in Q2FY25 and recent rate cuts by the US Federal Reserve. While a neutral stance signals flexibility and remains focused on stabilizing the macroeconomic environment, a rate cut would have provided the necessary boost to the GDP while also improving homebuyer’s sentiment in the mid-and-affordable housing segment. However, we do anticipate that the RBI would provide the much-needed stimulus soon in the February-2025 MPC meet, to bolster the overall consumer spending. For the housing sector, in particular, lower lending rates would serve as a catalyst for a sustained momentum.”

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RBI MPC meeting live updates: Boman Irani, President of CREDAI said, “Acknowledging the challenges posed by persistent inflationary pressures, the Reserve Bank of India’s decision to maintain the repo rate at 6.5% reflects an understandable approach towards striking a balance between economic and price stability. However, going ahead into the new year, we hope to see the RBI and the government continue to leverage the robust growth and potential offered by real estate and agriculture sectors in particular, via a combination of policy interventions and reduced rates to form a conducive eco-system for sustained and sustainable economic growth.”

RBI MPC meeting live updates: Mohit Malhotra, Founder & CEO of NeoLiv said, “The RBI's decision to hold the repo rate at 6.5% is a positive sign for the real estate sector. This continued stability in interest rates will make owning a dream home possible. We expect this to translate into increased buyer confidence and a positive impact on home-buying decisions. This, in turn, will encourage new age fund and development companies to fuel further investment in the real estate sector, contributing to its overall health and India's economic well-being”

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RBI MPC meeting live updates: Manik Malik, CFO, BPTP said, "The RBI's decision to maintain the repo rate at its current level is a welcome move for the real estate sector, offering much-needed relief to both developers and homebuyers. Stable rates are likely to keep home loan interest rates steady, ensuring affordability for buyers and sustaining consistent demand across housing segments. This decision not only builds customer confidence, encouraging more investments in real estate, but also helps developers manage financial costs more effectively, enabling smoother project execution. Overall, it enhances market stability, fostering an environment that supports homeownership aspirations and drives long-term growth for the industry."

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