RBI Monetary Policy (MPC Meeting) Dec 2024: Repo-Rate CRR Updates

RBI Monetary Policy December 2024: RBI keeps repo rate unchanged at 6.5%, cuts CRR to 4%. RBI MPC Meeting updates, FY25 GDP growth estimates cut to 6.6%. RBI Governor Shaktikanta Das cuts FY25 GDP growth estimates to 6.6% from 7.2% earlier.

FY25: Cut to 6.6% from 7.2%

Q2FY25: Retained at 7.0%

Q3FY25: Cut to 6.8% from 7.4%

Q4FY25: Cut to 7.2% from 7.4%

Q1FY26: Cut to 6.9% from 7.3%

Q2FY26: 7.3%.

RBI MPC Policy Live Updates: Inflation forecast for FY25 at 4.8%

Q3FY25 - 5.7%

Q4FY25 - 4.5%

Q1FY26 - 4.6%

Q2FY26- 4%

Also Read | RBI MPC Meeting October 2024: Is a Repo Rate Cut Possible?

RBI Monetary Policy Dec 2024: Expectations

RBI monetary policy meeting is likely to begin from 4 December to 6 December 2024. The decision related to RBI’s repo rate and stance will be announced on Friday 6 Dec 2024.

This RBI monetary policy meeting Dec 2024 is important as we saw high retail inflation and low GDP growth. In the RBI meeting, if the committee is more concerned about the increasing inflation then an increase in repo rate is possible.

Whereas, if the committee is more concerned about the slower GDP Growth then repo rate cut is possible to boost the demand.

It is expected that RBI’s committee may cut the repo rate to 6.30% from 6.50% and keep the stance neutral. It means repo -rate of 0.2 basis points.

Currently, before the RBI monetary policy December meet, the repo-rate is at 6.50% and stance is Neutral. The neutral stance suggests RBI can increase or decrease the rates according to the infraction and economic growth.

RBI Monetary Policy Meeting: GDP Growth Concern

RBI monetary policy meeting biggest concern will be slower GDP growth for the economy. Recently, India’s Q2 FY25 data was released which is really disappointing and raises concern for the policy makers.

India’s Q2 FY25 GDP growth slows down to 5.4% in July - September period. It means demand for the goods is low and exports are also decreasing.

RBI Monetary Policy Meeting: Repo-Rate Cut Impact in Market?

If the RBI monetary policy meeting committee decided to cut the repo rate, then benchmark index Nifty and Sensex may continue to recover. The sectoral index Banknifty and Bankex may also get a positive impact because banks can provide more loans.

Conclusion

RBI monetary policy meeting conclusion scheduled on Friday, 6 December 2024. This time the possibility of the rate cut is high to boost the GDP and economic growth. However, Repo-rate cuts might lead to increase in inflation. Therefore, it will be interesting to see how, RBI tackles increasing inflation in future.

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