RBI Monetary Policy Live: No decision has yet been taken on BRICS currency, says Shaktikanta Das

“The RBI's decision to retain the repo rate at 6.5% was widely expected and reflects a prudent, balanced approach to managing growth while keeping inflation within the tolerable range. The reduction of the Cash Reserve Ratio (CRR) by 50 basis points is an encouraging move, as it will inject significant liquidity into the banking system, enhance banks' lending capacity, and improve credit accessibility for individuals. Markets had already anticipated today's policy to be neutral, with a positive sentiment reflected yesterday.” - Bajaj Broking Research Team

MPC kept policy rates & stance unchanged and added liquidity by cutting CRR. Given uncertain global scenario & stubborn food inflation, keeping rates on hold show RBI commitment to financial stability and inflation framework. Liquidity easing will enable bank to support growth needs. More data on growth slowdown will make growth focus measures in next year. We believe that CRR cut has marked the beginning of monetary easing which will likely gain steam once food inflation starts declining from December onwards. Absent a major global shock, conditions are ripe for a cut in February. - Kaustubh Gupta, Co-Head Fixed Income, Aditya Birla Sun Life AMC Ltd.

‘In its MPC meeting concluded today, RBI kept its policy rates on hold, in line with its steadfast focus on durably aligning CPI with the 4% target. Pertinent to note that it wasn’t unduly perturbed by sharp moderation in Q2 GDP growth, which it saw as transitory. It instead chose to wait for more confirmation of CPI cooling off, especially given two elevated prints since the last MPC meet. RBI however cut CRR by 50 bps to alleviate liquidity tightness caused by aggressive FX intervention in the recent weeks. Going forward, CPI is expected to moderate over the coming months and is projected to reach around 4% by Q2FY26, while GDP projections have been revised downwards by RBI. Given this backdrop, we continue to expect a shallow rate cut cycle ahead beginning in February.’ - Piyush Baranwal, Sr. Fund Manager (Fixed Income), WhiteOak Capital Asset Management

“The RBI has walked a delicate balance between Inflation and Growth by keeping repo rates unchanged and cutting CRR rates. Estimate of Growth is revised downwards while inflation is revised upwards to reflect the 2 Q GDP no.” - Nilesh Shah – MD, Kotak Mahindra AMC

• Private firms are hesitant to invest due to moderate demand, according to Shaktikanta Das.
• The ongoing growth slowdown is linked to inflationary pressures.
• Shaktikanta Das stated that their assessment indicates growth is beginning to pick up.
• Inflation during September and October was higher than anticipated, as noted by Das. (Read More)

"RBI has started the monetary easing cycle by cutting CRR by 50bps to 4% while retaining status quo on other policy rates. The cut in CRR will release INR 1.16 lakh crore of liquidity in the banking system. The yield curve has steepened post the CRR cut with the money market curve up to 1yr outperforming the longer end of the curve.”  - by Puneet Pal, Head- Fixed Income, PGIM India Mutual Fund

• Expect tight liquidity over next few months, says Shaktikanta Das
• Expect currency circulation to rise, says Shaktikanta Das
• Main problem is investment in demand side, says Shaktikanta Das
• There has been a recovery after Q2 slowdown, says Shaktikanta Das

“The MPC decided to keep the benchmark repo rate unchanged at 6.5% for the 11th consecutive meeting, signaling a cautious stance on economic growth and inflation. In a bid to inject liquidity into the banking system, the MPC also slashed the Cash Reserve Ratio by 50 basis points to 4%, which will infuse ₹1.16 lakh crore into the system. Additionally, the RBI raised its CPI inflation target for FY25 to 4.8% from the earlier 4.5%, citing inflationary pressures, especially from food prices. Consequently, the RBI revised its GDP growth forecast for FY25 downward, reducing it from 7.2% to 6.6%, reflecting the challenges posed by global uncertainties and domestic factors. Governor Das also announced an increase in the limit for collateral-free agricultural loans to ₹2 lakh per borrower and proposed a new benchmark secured overnight rupee rate to enhance transparency and liquidity in the money markets. The measures aim to strike a balance between liquidity support, inflation control, and growth stimulation. The rupee could benefit from increased foreign inflows, while bond yields may remain elevated due to inflation concerns. Gold and other safe-haven assets might attract investor interest.” - Vinit Bolinjkar- Head of Research at Ventura Securities

RBI MPC Committee in its policy meeting, decided against cutting the repo rate which stands unchanged at 6.5% on the back of headline CPI inflation surging upwards towards 6.2%. Further, the MPC committee also cut the GDP growth projection to 6.6% for the current financial year, from an earlier forecast of 7.2% indicating a weakness in the overall economy. However, on the positive side, RBI decided to cut banks (CRR) ' cash reserve ratio by 50 basis points to 4% in two tranches of 25 basis points each, kicking in on Dec. 14 and Dec 28 to increase the lendable financial resources. Markets, however, appear to have factored in these developments and are likely to consolidate in the coming weeks. - Aamar Deo Singh, Sr. VP Research, Angel One Ltd

• Credibility of inflation target has to be reserved, says RBI guv
• Effort is to keep inflation horse in a tight leash, Shaktikanta Das says
• Growth in H2 looks better than H1 of FY25, Das says

RBI Monetary Policy Live News: RBI will use various policy instruments to restore growth-inflation balance, says Shaktikanta Das

The Monetary Policy Committee (MPC) decided to keep the repo rate unchanged at 6.5 percent, as expected, due to inflation surpassing the 6 percent threshold. However, the 50 basis points reduction in the Cash Reserve Ratio (CRR) is aimed at supporting growth, especially after a sharp downward revision in the FY2025 growth forecast. ICRA's chief economist, Aditi Nayar, noted that if CPI inflation falls below 5 percent by December 2024, the chances of a repo rate cut in February 2025 would increase. The RBI remains focused on inflation, which has stayed above its comfort zone of 2-6 percent, while also addressing concerns over India's GDP growth and global demand slowdown.

The Reserve Bank of India (RBI) has expanded the UPI-linked credit facility to include small finance banks, which were previously excluded. Initially launched in September 2023, this facility allows users to access instant credit through popular apps like BHIM, PayZapp, Paytm, and GPay. The credit, conceived by the National Payments Corporation of India (NPCI), offers a pre-sanctioned limit that can be used during transactions for goods and services.

The RBI adjusts the CRR to manage inflation and liquidity in the economy. When inflation is high, the RBI increases the CRR to reduce the amount of money banks can lend, helping to control inflation. On the other hand, when the economy is slowing down, the RBI lowers the CRR to increase the amount of money available for lending, which can stimulate growth and investment.

By cutting the CRR now, the RBI is aiming to boost economic activity, particularly at a time when growth is slower than expected.

The Bank Nifty index bounced back sharply on Friday, December 6, following the Reserve Bank of India’s announcement of a 50 basis point reduction in the cash reserve ratio (CRR). After an initial dip due to the RBI’s decision to keep the repo rate steady at 6.5%, the index surged by over 600 points from its intraday low, reaching 53,850 by 10:30 AM.

The CRR cut, which lowers the reserve requirement to 4%, is expected to inject Rs 1-1.25 lakh crore into the banking system, boosting liquidity and supporting credit growth. Among banking stocks, Axis Bank led the rally with a 1.5% gain, while SBI and ICICI Bank rose by 0.9% and 0.8%, respectively. HDFC Bank and Kotak Mahindra Bank remained flat.

As a country we can derive satisfaction that we have not only emerged successfully but also stronger, says Das

• MuleHunter.Ai set up by RBI Innovation Hub
• MPC to wait for better visibility on inflation and growth outlook

• Enhancement of collateral free agri loan increased from 1.6 lakh per borrower to Rs 2 lakh per borrower
• Credit line on UPI to be extended to SFBs
• The RBI proposes to introduced new benchmark of secured overnight rupee rate which is based on all secured money market transaction i.,e, overnight market repo and treps.

RBI to add podcasts to its toolkit for communication

Foreign Portfolio Investment (FPI) inflows into Emerging Market Economies (EMEs) experienced a general decline in October. However, India has recorded net FPI inflows of $9.3 billion in FY25 so far. To boost capital inflows, the Reserve Bank of India (RBI) has announced an immediate increase in interest rate ceilings on FCNR-B deposits and raised FCNR deposit rates, aiming to enhance India's appeal as a destination for foreign investments.

Fx retail platform to be linked to Bharat connect platform of NPCI, announces Shaktikanta Das

Spread on FCNRB increased from 250 bps to 400 bps

RBI Guv Das highlighted the RBI's proactive approach to supervising the financial sector and its entities. He noted that the gap between credit growth and deposit growth in scheduled commercial banks has narrowed. The central bank remains focused on resolving issues in a non-disruptive manner, with business restrictions being imposed only in extreme cases. Ensuring stability in the banking system remains a top priority.

"The RBI's decision to retain the repo rate at 6.5% for the 11th consecutive time is a balanced approach to manage growth and inflation. With India's GDP expected to grow at 6.5–7% in FY 2024-25 and the real estate sector contributing 7% to the economy, this stability is vital for maintaining economic momentum. A steady rate ensures consistent repayment terms, which increases the confidence of homebuyers and encourages investments in the sector. With property prices rising, stable lending conditions and a steady market make real estate a key driver of economic growth, boosting demand and contributing significantly to India's economic progress." - Manju Yagnik, Vice Chairperson of Nahar Group and Senior VP, NAREDCO, Maharashtra

Banks advised to reduce the number of inoperative accounts and unclaimed deposits, says RBI Governor

RBI conducted VRRR to manage liquidity in the system

• The RBI's decision to keep the repo rate unchanged is a great move for the real estate sector. As per the Knight Frank report, the sector currently valued at $493 billion and contributing 7.3% to India's GDP, we're optimistic about its future growth prospects. Our projections indicate that the sector will increase to Rs 5.8 trillion by 2047, accounting for 15.5% of India's economic output, making this stability in interest rates a timely and welcome move. This stability in interest rates is particularly beneficial for high-value markets like Mumbai and Pune.
• With steady interest rates, buyer confidence will likely increase, driving steady demand and supporting sector growth. Moreover, the positive correlation between tax relief measures and high-end property sales is expected to persist. The combination of stable interest rates and reduced stamp duty will continue to drive sales of properties. This favorable environment will benefit both developers and homebuyers, ultimately fostering growth in the real estate sector. - Vishal Jumani - Joint Managing Director, Supreme Universal

This is the first CRR cut since March 2020. CRR to be cut in two tranches of 25 basis points each.

It is necessary to monitor incoming data for confirmation on decline in inflation

Prudence and practicality demand that we remain sensitive to dynamically evolving situation

• Inflation FY25: 4.8%
• Q3: 5.7%
• Q4: 4.5%
• Q1 FY26: 4.6%
• Q2 FY26: 4%
• Risks are evenly balanced

• FY25 – 7.2% (Earlier) 6.6% (Now)
• Q2 – 7.0% (earlier) 7.0%% (Now)
• Q3 – 7.4% (Earlier) 6.8% (Now)
• Q4 – 7.4% (Earlier) 7.2% (Now)\\
• Q1FY26 – 7.3% (Earlier) 6.9% (Now)
• Q2FY26 - 7.3% (Now)

• Growth FY25: 6.6%
• Q3: 6.8%
• Q4 7.2%
• Q1 6.9
• 7.3%
• Risks are evenly balanced

• MPC remains committed to restoring inflation-growth balance in overall economy
• Growth turned out to much lower than anticipated caused by substantial decelerating of manufacturing growth
• The slowdown in economic activity bottomed out in the second quarter.
• Industrial activity also expected to recover

• SDF remains at 6.25%
• MSF and bank rate at 6.75%
• Continue with Neutral stance
• MPC believes that only with durable price stability can strong foundations be set for high growth
• Inflation is gradually moving towards the targets after multi decade high
• Outlook for global economy clouded by protectionism which has tendency to push inflation higher

RBI Monetary Policy Meeting Live: Shaktikanta Das keeps repo rate unchanged for 11th time, retains 'neutral' stance

Last mile of disinflation turning out to be prolonged and arduous for economies

RBI MPC Live News: Price stability is very important for the people, but  growth is also important, says Shaktikanta Das.

RBI MPC Live News: Reserve Bank of India Governor Shaktikanta Das has begun his speech.

RBI MPC Live News: Calls for lower interest rates were gaining momentum even before the release of the September quarter GDP data, which reported growth at 5.4%, falling short of the expected 6.5%. Both Finance Minister Nirmala Sitharaman and Commerce Minister Piyush Goyal had expressed their views on the matter.

• Cyclical slowdown seen in market
• There Are Early Signs Of Pick Up And Expect Government Spending To Come In
• Expect first half of next year to see growth pick up in India
• Sensex target is 93,000 by December 2025
• Not alarmed about situation in India, it looks good to us
• India is one of the top 3 preferred markets for us, globally
• Emerging markets as an asset class doesn’t makes any sense, any more
• China is seeing a fall in earnings growth
• India’s nominal GDP growth rate 2.5x of China
• Indian corporate earnings are compounding in double digits
• Rupee is more stable than Chinese currency
• Remain overweight financials across major equity markets
• Like IT services names too, globally
• Underweight on defence and energies

If no action is taken on rates or liquidity, an immediate bond sell-off could occur, pushing the benchmark bond yield up to 6.75% and stabilizing around that level. - PNB Gilts MD Vikas Goel

•  Liquidity management is the sole responsibility of the RBI, and a CRR cut appears likely.
• “The banking system's liquidity has tightened due to the RBI's efforts to stabilize the rupee, including substantial dollar sales, which have impacted overall liquidity. In December, liquidity is expected to tighten further because of outflows related to advance tax payments, GST, and quarter-end credit demand,” said Madan Sabnavis, Chief Economist at Bank of Baroda.
• “Under these circumstances, the RBI may consider a permanent measure, such as a CRR cut or an Open Market Operation (OMO) purchase,” he added.

RBI Governor Shaktikanta Das has reached the RBI headquarters ahead of the 10:00 am announcements

• The Cash Reserve Ratio (CRR), currently at 4.5%, represents the proportion of a bank’s total deposits that must be held in liquid cash with the RBI as a reserve. It serves as a tool for the RBI to control inflation and regulate excessive lending.
• While the Monetary Policy Committee (MPC) decides on the repo rate and policy stance, managing liquidity falls exclusively under the RBI’s jurisdiction. Analysts suggest the RBI may opt to lower the CRR by either 25 or 50 basis points (bps).

• Cutting interest rates to boost economic growth faces hurdles due to rising inflation.
• Retail inflation climbed to 6.21% in October, surpassing the RBI’s target range for the first time in a year.
• HSBC economists predict: The RBI may reduce the Cash Reserve Ratio (CRR) by 50 basis points.
• Additional liquidity measures could follow in the coming months. "It's time to act, strategically," HSBC economists stated.

• BofA Securities expects the Reserve Bank of India (RBI) to hold interest rates steady, emphasizing that, despite sluggish economic growth, currency exchange dynamics will play a crucial role in shaping policy decisions.
• "The recent outflows from equity markets and pressure on the rupee have added a new dimension to the policy framework, prompting significant intervention by the RBI," BofA noted.
• "A sharp depreciation of the rupee could heighten concerns about financial stability and imported inflation." India's economy has shown signs of slowing, with GDP growth during the July-September quarter hitting a seven-quarter low.

•  We closely monitor the potential turn in the interest rate cycle and the overall pace of monetary easing, as these factors will significantly impact the underlying margin trajectory. Additionally, progress in deposit mobilization will be critical, as an elevated CD ratio and rising inflation rates will make it challenging for lenders to reduce deposit rates and, consequently, lower their funding costs.
• Banks with a higher proportion of fixed-rate loans and a lower duration of liabilities are expected to report more resilient NIM performance over FY26. However, we remain cautious about the ongoing delinquency cycle in unsecured loans and the associated interest reversals, as high credit costs and an adverse asset mix will exert pressure on banks' profitability.
• PSU Banks: Earnings momentum of PSU Banks remain strong leading us to raise our FY25 projections by 1.5%. However, with RoA profile nearly maturing, we estimate earnings growth to broadly track loan growth at 10-11% CAGR over FY25-27E. Headwinds on margins and potential rise in credit cost remains a key risk. Top picks: ICICI, HDFCB, SBI, FB, and AUBANK.

RBI MPC Meeting Live Updates: Rupee opens at 84.64/$ vs Thursday’s close of 84.73/$

RBI MPC Meeting Live Updates: "FIIs turning buyers in December, in total reversal of their sustained selling strategy during the last two months, has altered the market sentiments in favour of the bulls. Encouraged by the FII buying, retail investors, too, have jumped on to the buying bandwagon. This has triggered short-covering leading to sharp intra-day volatility. The 500-point swing in Nifty from the peak to the trough yesterday indicates a tug-of-war between the bulls and the bears. The best strategy in this volatile context would be to remain invested with higher weightage for largecaps, where there is valuation comfort. The policy response of the RBI and the central bank’s commentary on the growth and inflation outlook will be keenly watched by the market today." - Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services:

RBI MPC Live Updates: The global landscape is growing more challenging, with markets bracing for a stronger dollar, rising capital costs, and substantial investment flows returning to the US. These factors could constrain the RBI’s options if economic growth slows significantly. In such a scenario, the central bank might explore non-rate measures, with a Cash Reserve Ratio (CRR) cut being a potential consideration, according to Suman Chowdhury, Executive Director & Chief Economist at Acuitè Ratings.

• Bimal Jalan - Nov 8, 1997 to Nov 22, 1997
• Bimal Jalan - July 10, 2002 to Nov 22, 2002
• YV Reddy - July 18, 2003 to Sept 6, 2003
• D Subbarao - Sept 1, 2008 to Sept 4, 2008
• D Subbarao - August 9, 2011 to September 5, 2011
• Raghuram Rajan August 6, 2013 to Sept 5, 2013
• Urjit Patel - August 20, 2016 to September 4, 2016
• Shaktikanta Das - Dec 11, 2018 to Dec 12, 2018
• Shaktikanta Das Oct 29, 2021 to Dec 11, 2021

Shaktikanta Das' term as RBI Goveronor is ending on December 12. He is the longest-serving Governor that the Central Bank has seen in the last 70 years. He was appointed as RBI Governor back in 2018 for three years. In 2021, he got an extension for another three years. While his term is ending, speculations are rife that he may just get another extension.

On RBI announcement, Narendra Solanki, Head of Fundamental Research at Anand Rathi, says, "Markets have already factored in the likelihood of no rate cuts in December. Attention will now turn to the Governor's commentary."

Kotak, in its latest report, noted that the slowdown in GDP growth raises the likelihood of early policy actions. The firm suggests a staggered 50-basis-point CRR cut by the Reserve Bank of India (RBI) at the upcoming MPC meeting, which could inject Rs 1.2 lakh crore into the economy, marking the start of a monetary easing cycle. However, Kotak Equities expects the RBI to keep the repo rate unchanged, citing high inflation in October-November and global economic challenges.

A 50 basis point (bps) cut in the Cash Reserve Ratio (CRR) by the RBI could free up Rs 1.1 lakh crore to Rs 1.2 lakh crore for lending, while a smaller 25 bps reduction would release Rs 55,000 crore to Rs 60,000 crore. With more money available to banks, this move could stimulate economic growth.

A CRR cut can help boost growth without fueling inflation, while also easing challenges posed by the RBI's interventions in the foreign exchange market to manage the rupee’s depreciation. Experts also suggest the RBI may consider other tools like foreign exchange swaps and open market operations (OMOs) to further support liquidity.

The December MPC meeting holds extra significance for RBI Governor Shaktikanta Das, as his term is set to end next week. With no official word yet on an extension, the Governor faces a tough balancing act: addressing slowing growth, which may call for a rate or CRR cut, while managing persistent inflation, which could necessitate holding rates steady.

Sources told Moneycontrol Das is likely to receive an extension, with speculation that it could be for two more years, though it remains uncertain whether he will secure a full three-year term. As his second term concludes on December 12, all eyes are on how he navigates this crucial juncture.

Despite ongoing uncertainty, Indian equity markets saw a strong rally on Thursday, driven by global optimism and robust FII inflows. The BSE Sensex soared over 800 points, closing at 81,765, while the NSE Nifty surged more than 240 points, finishing above 24,700, led by buying in heavyweight stocks. FIIs net bought Indian equities worth Rs 8,540 crore.

Aurodeep Nandi, India Economist at Nomura, anticipates a 25 basis point repo rate cut and a 50 basis point CRR cut, although he noted the challenges of a cyclical slowdown. He stressed that lower credit growth could impact domestic demand, and government spending needs to accelerate to meet targets.

Many analysts anticipate a cut in the cash reserve ratio (CRR) following a disappointing 5.4% GDP growth for the September quarter, marking a seven-quarter low.

The CRR, currently set at 4.5%, dictates the percentage of a bank's deposits it must hold as reserves with the RBI. By adjusting the CRR, the RBI can control liquidity and lending: raising it during inflation to curb lending, and lowering it in times of slow growth to encourage lending and stimulate the economy.

Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, noted that while the US has begun its rate cut cycle, India is yet to follow suit. “The RBI may ease rates in the second half of the year, benefiting interest rate-sensitive sectors,” he said.

Ajit Mishra of Religare Broking warned of a potential "knee-jerk reaction" in banking stocks if liquidity measures fall short of expectations. Meanwhile, Kunal Rambhia of The Streets suggested a stock-specific approach given the limited risk-reward at current index levels.

Narendra Solanki of Anand Rathi emphasized that markets have already priced in a pause, adding that the Governor’s commentary will be pivotal.

Most economists polled by Bloomberg and Moneycontrol expect the RBI to maintain the repo rate at 6.5%, citing high inflation and a neutral stance from October’s meeting. However, some predict a 50-basis-point CRR cut, potentially injecting Rs 1-1.25 lakh crore into the banking system to boost credit growth and investments.

The sharper-than-expected GDP slowdown to 5.4% in Q2 has intensified concerns about restrictive monetary policies dampening economic activity, increasing calls for liquidity-enhancing measures.

The Indian stock market is anticipating a liquidity boost as the Reserve Bank of India (RBI) gears up for its bi-monthly monetary policy announcement later today. After Sensex and Nifty gained 1% on Thursday, all eyes are on RBI Governor Shaktikanta Das and the Monetary Policy Committee (MPC) to see if they will announce a repo rate or cash reserve ratio (CRR) cut to counter the ongoing economic slowdown.

With the latest reading, headline inflation has surpassed the Monetary Policy Committee's (MPC) tolerance range of 2-6% for the first time in 13 months. Experts now suggest that with inflation exceeding the 6% mark, a rate revision by the MPC is unlikely in December and highly improbable in February.

Rising vegetable prices delivered a significant blow to headline retail inflation, pushing the Consumer Price Index (CPI) to a 14-month high of 6.2% in October. Among states, Chhattisgarh recorded the highest inflation rate at 8.8%, while Delhi experienced the lowest at 4%.

• Back in August this year, the six-member Monetary Policy Committee (MPC) voted to keep the repo rate unchanged at 6.50%, maintaining its disinflationary stance of "withdrawal of accommodation." Both decisions were made with a 4-2 majority.
• "Ensuring price stability is key to sustaining growth. With GDP growth holding steady, we decided to maintain the current repo rate," Governor Shaktikanta Das stated following the MPC's 50th meeting.

• Despite the slowdown in GDP growth to a two-year low in Q2 FY25, the rate-setting Monetary Policy Committee (MPC) is likely to maintain the repo rate, as retail inflation exceeded the 6% tolerance level in October.
• The six-member MPC is expected to prioritise reducing retail inflation to 4%.
• MPC members are anticipated to hold firm on their stance, despite recent remarks from a few Union cabinet ministers and the Chief Economic Adviser, who have called for softer interest rates.

• According to well-placed sources, Governor Shaktikanta Das is regarded as a strong candidate who has managed his sensitive position effectively.
• What remains unclear is whether he will receive a full three-year extension. "It is expected that he will continue for two more years after his current term ends on December 12," said a person familiar with the matter.
• Another source mentioned that a potential third term for Das is being considered and could be announced soon. (Read More)

The December meeting is critical for Governor Shaktikanta Das, as his term ends next week and he has yet to receive an extension from the government. This may be his final MPC meeting before his tenure concludes. The Governor faces the challenge of addressing slow growth, which may require a rate or CRR cut, while also managing inflation, which calls for keeping rates steady.

The Cash Reserve Ratio (CRR) is the percentage of a bank's deposits that must be held as reserves with the central bank. The RBI uses this tool to manage inflation, control the money supply, and ensure liquidity in the economy. Currently, the CRR for banks is set at 4.5%.

• Discussions on a potential CRR cut began after GDP growth slowed in the September quarter.
• This reduced the central bank's ability to keep the policy rate unchanged, opening up options like CRR cuts to stimulate growth without affecting inflation.
• The economy grew at 6.7% in the previous quarter and 8.1% in the same quarter last year.

Nomura, in a report, stated that it expects the RBI to reduce the repo rate by 25 basis points (bps) in December, along with a 50 bps cut in the Cash Reserve Ratio (CRR).

•  Most experts anticipate that the central bank will keep its stance "neutral" in the December policy. However, one respondent expects a shift to "accommodative" from "neutral."
• Murthy Nagarajan, Head of Fixed Income at Tata Asset Management, noted, "An accommodative stance seems likely, as inflation is expected to stay in the 4% range going forward."

Economic growth fell to a seven-quarter low of 5.4% year-on-year (YoY) in Q2 FY25, driven by slower expansion in the manufacturing and consumption sectors.

A Moneycontrol poll of 17 economists, bankers, and fund managers suggests that the central bank is expected to keep the policy rate unchanged for the 11th consecutive time, driven by higher-than-anticipated inflation levels. (Read here)

The policy decisions announced today will define the direction of India's monetary policy, impacting inflation control, liquidity management, and overall economic growth.

In October, the RBI maintained the repo rate at 6.5% for the 10th straight time. Other key rates, such as the Standing Deposit Facility at 6.25% and the Marginal Standing Facility at 6.75%, also remained unchanged.

• Market participants will be watching closely for:
• Repo Rate: Expected to remain unchanged at 6.5%, consistent with the previous 10 MPC meetings.
• Liquidity Measures: Potential adjustments, such as changes to the Cash Reserve Ratio (CRR) or Open Market Operations (OMO), to address liquidity needs.
• Inflation Strategy: Details on the RBI's approach to managing persistent inflationary pressures.

The MPC meeting takes place amid slowing GDP growth, persistent inflation, and declining production levels, fueling public and industry expectations for corrective action.

The speech will be streamed live on RBI's official YouTube channel and social media platforms such as Facebook and X (formerly Twitter). A press conference, scheduled for 12:00 pm, will also be broadcast on these platforms.

RBI Governor Shaktikanta Das is set to deliver a live address at 10:00 am, highlighting the key policy decisions and their underlying rationale.

Hello and welcome to our live coverage of all important RBI MPC announcements today. Will there be a repo rate cut or a CRR cut? What's Central Bank's take on GDP and headline inflation? Stay with us for latest on RBI MPC decisions, buzz around extension of Shaktikanta Das' tenure and much more.