Finance
RBI Shifts Stance to Neutral while Retaining Policy Rate
Published on
Author: DISHA PRAFUL SUKHANI
Highlights
- In its October 2024 meeting, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) maintained the policy repo rate at 6.5% with a 5:6 majority.
- However, the MPC has unanimously changed its stance to ‘neutral’ from 'withdrawal of accommodation.
- Despite a shift in stance, the governor maintained a cautious tone, emphasizing the ongoing risks to inflationary outlook.
- The GDP growth and inflation projection for FY25 was maintained at 7.2% and 4.5% respectively.
- The RBI can opt for a shallow rate cut of 25 bps in the December policy, followed by another 25 bps in the February policy, provided food inflation moderates.