RBI Monetary Policy 2024 Highlights: Can't give forward guidance on policy stance, says Governor Shaktikanta Das

RBI MPC Meeting LIVE: Cues from Reserve Bank's monetary policy

The RBI Monetary Policy was on the expected lines – no change in rates and status quo on the stance of 'withdrawal of accommodation'.

A section of the market had recently started believing that the Monetary Policy Committee (MPC) might want to bring in a change in policy stance (to something like neutral) in this policy, so as to comfort the markets and bring down the short term rates, but that was clearly not in the MPC agenda.

Overall, the MPC draws comfort from the inflation trajectory of the past few quarters, especially the core inflation, which has moderated quite well (fallen by 310 bps from the high of April 2022) and is now below the 4 percent target of the RBI. The softening in core inflation (CPI inflation excluding food and fuel) is seen as broad-based, across both goods and services, which suggests that the monetary policy is having the desired impact on the economy. Read more

Some disappointment in market over no change in policy stance, says Quantum AMC's Pankaj Pathak

"The RBI delivered another do-nothing policy. There was some disappointment for the market as a section a market including us was expecting at least a stance change from ‘withdrawal of accommodation’ to ‘neutral'," said Pankaj Pathak, Fund Manager- Fixed Income, Quantum AMC. "There was an expectation that the RBI will announce some liquidity infusion measures to deal with the recent tightness in the banking system. However, the RBI seems comfortable with the overall liquidity condition and doesn’t see any need to infuse durable liquidity at this stage."

RBI MPC Meeting LIVE: MPC's 5:1 vote for repo status quo indicates rate cut cycle likely in second half of 2024

An interesting observation in this MPC meeting is that while 5 MPC members voted for staying the course, 1 MPC member, Professor Jayanth R. Varma, actually voted to reduce the policy repo rate by 25 bps. Read more

RBI MPC Meeting LIVE: Here's what DG Swaminathan said on whether other banks could partner with Paytm Payments Bank

Reserve Bank of India (RBI) Deputy Governor Swaminathan J said the partnerships with Paytm Payments Bank will be a prerogative of banks. “It is a business decision for other banks (if they want to partner with Paytm Payments Bank),” Swaminatah said during the post-policy press conference. Read more

RBI MPC Meeting LIVE: Expect shallow rate cut in second half of the year, says CareEdge chief economist

"Going forward, we feel that RBI would remain cautious given the risk posed by high food inflation. Healthy economic growth gives room to the central bank to maintain status quo for some more time. However, in the second half of the year, as domestic inflationary concerns recede and the US Federal Reserve starts cutting rates, we can expect a shallow rate cut by RBI," said Rajani Sinha, Chief Economist, CareEdge.

RBI MPC Meeting LIVE: Rate cut probably in June, if not later, says CRISIL chief economist

"While fiscal prudence has smoothened the path for monetary policy, the RBI is wary of cutting rates or changing stance too soon given inflation is not fully tamed yet. We believe given the tensions around the Red Sea — and its attendant impact — and given the trajectory of food prices an interest rate cut is unlikely in the April monetary policy review and would most probably come in June, if not later," said Dharmakirti Joshi, Chief Economist, CRISIL.

RBI MPC Meeting LIVE: Key takeaways from Reserve Bank's policy review

Key takeaways: RBI MPC maintains repo rate at 6.5%, forecasts FY25 GDP growth at 7%. Inflation moderated, liquidity remains surplus. Rupee stable, forex reserves $622.5 billion. Details here

RBI MPC Meeting LIVE: What DG Swaminathan said on action against Paytm Payments Bank

The Reserve Bank of India's action against Paytm Payments Bank, the banking entity of Paytm, followed persistent non-compliance, deputy governor Swaminathan J has said.

“This is supervisory action for persistence non-compliance. Such action is invariably preceded by months and sometimes years of bilateral engagement where we point out the deficiencies but also give time to take corrective action. As a regulator, it is incumbent upon us to protect the consumer,” Swaminathan said. Read more

RBI MPC Meeting LIVE: Press briefing concludes; RBI to issue FAQs on Paytm bank action next week

The press briefing of the RBI, following the Monetary Policy Committee (MPC) meeting, has concluded. A bulk of the questions were centred around the central bank's restrictionary order issued against the Paytm Payments Bank. The RBI officials, while noting that the action was based on non-compliance, said a list of FAQs on its action against Paytm's banking arm would be issued next week. Read more

RBI MPC Meeting LIVE: Paytm app unimpacted by our action against its banking arm, clarifies DG Swaminathan

"Just to clarify, the action is against Paytm Payments Bank, not against the Paytm app. The app is not impacted by our action," RBI Deputy Governor Swaminathan J said.

However, the stock of Paytm's parent One97 Communications has been hammered at the markets ever since the central bank issued the order directing the banking arm to stop accepting fresh deposits from March onwards.

RBI MPC Meeting LIVE: India's general govt debt to come down to 80% by 2028, says Guv Das

India's general government debt has come down from 88 percent to 81 percent or so, Shaktikanta Das said, adding that it should come down to 80 percent or so by 2028.

"I have raised the issue of elevated public debt in a global context, not in the Indian context. As of now, debt-to-GDP ratio is advanced economies is higher than that of emerging market economies. The fiscal deficit of some advanced economies is also high. This issue can become a future source of stress for the global financial system," the RBI Governor said.

RBI MPC Meeting LIVE: Indian financial sector strong, be it banks or NBFCs, says Governor Das

RBI Governor Shaktikanta Das asserted that the the Indian financial sector is "very strong", be it banks or NBFCs. "There is no doubt about that. The sector's growth is sound. But as a supervisor, we keep an eye on regulated entities and engage with them directly and ask them to take corrective action," he said.

The RBI is the custodian of financial stability, and stand strongly, he underlined.

RBI MPC Meeting LIVE: Not a case of regulatory deficiency, but issue of compliance, Guv Das on Paytm action

"The regulations are in place. They are robust. It is not a case of regulatory deficiency. It is an issue of compliance with various parameters. I don't want to specify the details," Governor Shaktikanta Das said, while being asked by reporters during the press conference about the RBI action against Paytm's banking arm.

RBI MPC Meeting LIVE: Can't give forward guidance on what pre-conditions stance may change to neutral, says Guv Das

"I cannot give any forward guidance on what are the pre-conditions for the stance of policy to be changed to neutral. There are a lot of uncertainties. In such an environment, we can't give any forward guidance," Shaktikanta Das said, during the RBI press conference.

RBI MPC Meeting LIVE: OTP most popular authentication method, but other technologies also available, says Guv Das

"Over the years, the OTP has become the popular authenticating method. But various other technologies have also become available. We just want players in the field to be aware of them. The RBI is agnostic to what method is used as long as it is a sound method," Governor Shaktikanta Das said, during the post-MPC meeting press conference of the central bank.

RBI MPC Meeting LIVE: Upto other banks if they want to partner with Paytm Payments Bank, says DG Swaminathan

It is a business decision for other banks (if they want to partner with Paytm Payments Bank), RBI Deputy Governor Swaminathan J said.

RBI MPC Meeting LIVE: Key Fact Statement for loans will be in interest of customers, says Guv Das

"From experience we know that customers don't read the entire terms and conditions while taking a loan. Which is why we have mandated a Key Fact Statement giving an annualised interest rate that includes all charges. All information is already given by banks, but to make it in customers' interest, we have asked for a Key Fact Statement for retail and MSME customers," RBI Governor Shaktikanta Das said.

RBI MPC Meeting LIVE: Stance of policy must not be read as excessive liquidity prevailing, says Guv Das

"What we have attempted to do today is to clearly state that the stance of policy should not be read as excessive liquidity is prevailing," RBI Governor Shaktikanta Das said.

"The instruments we utilise to manage liquidity will depend on the situation," he added.

RBI MPC Meeting LIVE: Programability of CBDC doesn't militate against its fungibility, RBI DG

"Programability of CBDC doesn't militate against its fungibility," RBI Deputy Governor T Rabi Sankar said.

"Programability of CBDC could be useful in the future, when CBDC is fully implemented, if the government wants to give some cash support to certain individuals for a specific purpose," Governor Shaktikanta Das added.

RBI MPC Meeting LIVE: FAQ on Paytm action to be issued next week

"Over the last few days, we have received a lot of queries. We have noted them down. Based on that, we will be issuing an FAQ sometime next week," RBI Governor Shaktikanta Das said.

"All our actions are in the best interest of systemic stability and protection of depositors' interests. These aspects cannot be compromised," he added.

RBI MPC Meeting LIVE: 'Focus is on always engaging with regulated entities bilaterally, giving them time to take corrective action'

"Our focus is always on engaging with regulated entities bilaterally and we nudge them to take corrective action. We give them sufficient time to take corrective action...Without making any specific references to Paytm, I want to make some general comments about all our regulated entities. One, over the last few years, we have significantly deepened our supervisory approach and methods," RBI Governor Shaktikanta Das said.

RBI MPC Meeting LIVE: Paytm issue not a worry for entire system, Governor clarifies

"Let me put the record straight on the Paytm issue. There is no worry about the entire system. It is an issue with a specific institution," RBI Governor Shaktikanta Das said.

RBI MPC Meeting LIVE: Speculative to say govt wants interest rates down, says Guv Das

"It is speculative to say the government wants interest rates to come down. Has it said so anywhere?" RBI Governor Shaktikanta Das said.

RBI MPC Meeting LIVE: Action against Paytm due to persistent non-compliance, says RBI

"We give sufficient time to every regulated entity to comply with regulatory requirements. Sometimes it is more than sufficient time. We are a responsible regulator. If everything is complied with, why should we act?" RBI Governor Shaktikanta Das said.

RBI MPC Meeting LIVE: Not proper to discuss Paytm Payments Bank issue, says RBI DG

"It will not be proper for us to discuss the details of Paytm Payments Bank. We are seized of the issue, RBI Deputy Governor Swaminathan J said.

RBI MPC Meeting LIVE: Action on Paytm Payments Bank due to persistence non-compliance, says RBI Deputy Governor Swaminathan J

"We don't want to discuss details of action on Paytm Payments Bank. This is supervisory action for persistence non-compliance. Such action is invariably preceded by months and sometimes years of bilateral engagement where we point out the deficiencies but also give time to take corrective action. As a regulator, it is incumbent upon us to protect the consumer," RBI Deputy Governor Swaminathan J said.

RBI MPC Meeting LIVE: Liquidity will be actively managed by the central bank, says Guv Das

Our multi-pronged and proactive policies have worked well to maintain and strengthen macroeconomic and financial stability. Systemic, sectoral, and institutional signs of risk are proactively monitored and acted upon wherever necessary, the RBI Governor told reporters.

RBI MPC Meeting LIVE: CPI Inflation moderating with intermittent interruptions, says Guv Das

"Domestic economic activity continues to be strong. CPI inflation is moderating with intermittent interruptions. We have to remain vigilant. Our focus on achieving 4 percent inflation on a durable basis has to continue," RBI Governor said.

RBI MPC Meeting LIVE: Shaktikanta Das begins briefing press

RBI Governor Shaktikanta Das is briefing the press on the decisions taken by the Monetary Policy Committee. The press interaction comes shortly after he made the major announcemens at 10 am. Stay tuned here for the latest updates.

RBI MPC Meeting LIVE: Overall tone of policy remained cautious, uncertainty on food inflation outlook, says IDFC First Bank's Gaura Sen Gupta

"The overall tone of the policy remained cautious with uncertainty on food inflation outlook. The Governor continued to highlight the risk successive food price shocks, resulting in un-anchoring of inflation expectations. Comfort was drawn from broad-based moderation in core inflation and inflation expectation remaining anchored," said Gaura Sen Gupta, India Economist, IDFC First Bank.

RBI MPC Meeting LIVE: RBI introduces framework for digital transaction authentication

“To facilitate the use of such mechanisms for digital security, it is proposed to adopt a principle-based framework for authentication of digital payment transactions,” RBI Governor Shaktikanta Das said at the Monetary Policy Committee announcement. Read more

RBI MPC Meeting LIVE | Quick take: What is the message from RBI Governor Shaktikanta Das?

As expected, the monetary policy committee (MPC), led by the RBI, retained the key lending rate, the repo rate, at 6.5 percent, making it the sixth consecutive policy review of no rate action. More importantly, the stance on withdrawal from accommodation too was retained, indicating that the MPC is not yet ready to lower the guard against retail inflation, at least until the inflation numbers comfortably align with the medium-term target of 4 percent.

A shift in stance to ‘neutral’ would have indicated the thinking within the central bank towards a rate cut in the near term. That hasn’t happened yet. A lot will depend on inflation numbers in the months ahead. The central bank wants inflation to come down to the 4 percent level on a sustainable basis. Read more

RBI MPC Meeting LIVE: Unlike market expectations, RBI's tone was not dovish, says Anand Rathi Shares' chief economist

"Unlike market expectations, RBI's tone was not dovish. Governor Das was clear that tail risks have the possibility of undoing the work on disinflation. With RBI's inflation projection of 4.5 percent for 2024-25, any expectations of cuts coming in the current year become unlikely. We think the progress in food prices will be the key monitorable for RBI's tone in the upcoming policy. Like other central banks, higher growth for the current and next year gives RBI more headroom to be on a wait-and-watch mode," said Sujan Hajra, Chief Economist, Anand Rathi Shares and Stock Brokers.

RBI MPC Meeting LIVE: Leaving stance unchanged is possibly a surprise, says PwC India's Ranen Banerjee

"The MPC decision to keep the policy rate unchanged was expected. The stance is also kept at withdrawal of accommodation, that possibly is a surprise. This possibly is explained by the fiscal consolidation with Government projecting a lower deficit than target in 2023-24 and an aggressive 5.1 percent deficit target for 2024-25," said Ranen Banerjee, Partner and Leader Economic Advisory, PwC India.

"The lower government borrowings and higher international money allocations to India bonds owing to inclusion of India in the JPMorgan Emerging Markets bond index will keep a downward bias on the yields. The growth momentum is also holding up and inflationary risks are still on the horizon. The MPC therefore has decided to conserve its rate and stance gunpowder at this stage," the expert added.

RBI MPC Meeting LIVE: Rate cut over six months unlikely, says Acuité Ratings chief economist

"The governor highlighted the significance of the ‘last mile of disinflation’ and also indicated that the monetary transmission is still incomplete. Given such a background, the central bank will continue to prefer a tighter liquidity position.Given the tone of the MPC statement and the expectation of growth buoyancy, we believe that the likelihood of any rate cut by RBI has significantly reduced over the next six months," said Suman Chowdhury, Chief Economist, Acuité Ratings & Research.

RBI MPC Meeting LIVE: Divide growing between MPC's external, internal members on policy trajectory, says Nomura's Aurodeep Nandi

"These are Goldilocks times for the RBI – with 2024-25 growth expected at 7.0 percent and inflation at 4.5 percent – and so it is not surprising that the MPC has maintained status quo on policy rates and stance of ‘withdrawal of accommodation’.That said, this is the first time one of the MPC members has dissented in favour of a cut, suggesting a growing divide between external and internal RBI members on the policy trajectory," said Aurodeep Nandi, India Economist, Nomura.

RBI MPC Meeting LIVE: Don't see easy monetary policy anytime soon, says Motilal Oswal's chief economist

"Overall, there were no major announcements, hinting at an imminent easing. The RBI has been managing daily liquidity with overnight infusion, as and when required. We don't see easy monetary policy anytime soon, especially with such strong growth," said Nikhil Gupta, Chief Economist, Motilal Oswal Financial Services.

RBI MPC Meeting LIVE: RBI continued to sound hawkish as against market expectations, says Acuité Ratings chief economist

"It was no surprise that RBI MPC decided to keep the status quo on the interest rates for the sixth consecutive time. However, RBI continued to sound hawkish as against the market expectations and has not provided any indication of the timing of the change in monetary stance from ‘withdrawal of accommodation," said Suman Chowdhury, Chief Economist, Acuité Ratings & Research.

RBI MPC Meeting LIVE: EMIs to stay unchanged as central bank holds repo rate at 6.5%

Your home loan equated monthly installments (EMI) and interest burden will remain unchanged for now, with the RBI Monetary Policy Committee (MPC) deciding to keep the repo rate steady at 6.5 percent for the sixth consecutive time. Leading banks such as the State Bank of India (SBI), Bank of Baroda, HDFC Bank and ICICI Bank currently offer home loan rates starting at 8.35-8.75 percent. Read more

RBI MPC Meeting LIVE: Don’t expect deficit to rise up to the highs of Rs 3 lakh crore plus on durable basis, says Piramal Group chief economist

The RBI has effectively addressed emerging concerns around continued high systemic liquidity deficit. The deficit since December is due to a confluence of seasonal and ad-hoc macro factors, and should ease on a sustainable basis over the next 2-3 months. With RBI’s continued intervention in managing call money rates at close to the repo rate, I don’t expect deficit to rise up to the highs of Rs 3 lakh crore plus on a durable basis once again during the rest of 2024," said Debopam Chaudhuri, Chief Economist at Piramal Group:

"A Union Budget focused on fiscal consolidation followed by RBI’s assurance to maintain comfortable liquidity levels should provide a breather to our debt markets, till the actual shift in monetary policy occurs during Q1 2024-25," Chaudhuri added.

RBI MPC Meeting LIVE: Liquidity in banking system in surplus even after adjusting for cash balances: RBI Governor

Reserve Bank of India (RBI) Governor Shaktikanta Das on February 8 said liquidity in the banking system was in surplus after adjusting with the government cash balances. “Systemic liquidity turned into deficit in September 2023 after a gap of four-and-a-half years. But after adjusting for government cash balances, potential liquidity in the banking system is still in surplus,” Das said during monetary policy announcement. Read more

RBI MPC Meeting LIVE: Retail borrowers to get greater transparency in loan pricing

Keeping its focus on customer centricity, the Reserve Bank of India announced that banks will have to offer loans at a rate that includes the entire cost of the loan. That is, not just the interest rate itself but also other costs such as processing fees, documentation charges etc. This will apply to all retail loans and MSME (micro, small and medium enterprises) loans. Read more

RBI MPC Meeting LIVE: Expect 10-year govt bond yield to trade in 7.06%-7.15% range, Rockfort Fincap

The 10-year benchmark bond yield rises to 7.0861% after the monetary policy announcement.

"The impact on government bond yields would now depend upon investor perceptions of the effectiveness of the RBI's policies, expectations regarding future interest rate movements, government borrowing programmes and broader market dynamics. Overall we expect the 10-year government bond yield to trade in the range between 7.06% to 7.15% in near term," said Venkatakrishnan Srinivasan, founder and managing partner of Rockfort Fincap LLP.

RBI MPC Meeting LIVE: Top 10 highlights from Shaktikanta Das' announcement

- Repo Rate Unchanged At 6.50%, MSF And SDF Rates Remains Unchanged
- FY25 CPI Inflation Seen At 4.5%, Inflation Will Further Soften In 2024
- FY25 Real GDP Growth Projected At 7%
- Policy Stance In Light Of Incomplete Transmission Of Rates
- RBI To Deploy Appropriate Mix of Tools To Modulate Liquidity
- Central Banks Remain Cautious Against Premature Easing
- Financial Parameters Of NBFCs Improving In Tandem With Banks
- Customer Loans' Other Fees Must Be Included In Interest Rate
- All Retail, MSME Loans Now Need Key Fact Statement
- Resident Entities Can Now Hedge Gold In IFSC OTC Market.

RBI MPC Meeting LIVE: RBI policy somewhat pegged to US Fed, says Emkay Global economist

"On rates cut timing, we understand that shifting debates on global narratives requires the RBI to be flexible as well. We have long maintained that the RBI's policy has been somewhat pegged to the US Federal Reserve, specifically in the last two years, even as it formally targeted inflation. The swift turn of tone and action pivots of the RBI in the last two years have been influenced purely by global narrative. We do not see RBI preceding the Fed in rate cuts," said Madhavi Arora, Lead Economist, Emkay Global Financial Services.

RBI MPC Meeting LIVE: Monetary policy member Jayant Varma voted to cut rate by 25 bps against majority decision

MPC external member Jayanth Varma voted to reduce the policy repo rate by 25 basis points to 6.25 percent , against the majority decision. Varma was in the minority when it came to the stance too, as he wanted to change the stance of monetary policy to ’neutral’ from ‘withdrawal of accommodation’.