Bank of India (RBI) kept the repo rate unchanged at 6.5 per cent and maintained the policy stance of 'withdrawal of accommodation' on Friday, December 8. The standing deposit facility (SDF) rate remains at 6.25 per cent and the marginal standing facility (MSF) rate and the bank rate at 6.75 per cent. Besides, the RBI raised its real GDP growth projection for FY24 to 7 per cent from 6.5 per cent earlier with Q3 GDP at 6.5 per cent (against the estimates of 6 per cent earlier) and Q4 GDP at 6 per cent (against the estimates of 5.7 per cent earlier).
On the other hand, the RBI kept the inflation forecast unchanged as it projected Consumer Price Index (CPI)-based inflation, or retail inflation, at 5.4 per cent for FY24, with Q3 projection at 5.6 per cent and Q4 projection at 5.2 per cent. Also Read: RBI MPC Meeting: Repo rate unchanged; growth forecast raised; 7 key highlights of December policy meeting RBI expressed that its fight against inflation will continue but it also said it will not damage economic growth giving a subtle hint that growth is also in RBI's focus. Mint collated the views of 10 analysts on what they think about the RBI MPC's December meet outcome.
Here's what they said: While inflation estimates have been retained, near-term inflationary pressures primarily due to food inflation are expected to be visible. This development could make RBI maintain the status quo on rates in the upcoming meetings before considering rate cuts in the latter part of H1FY25. With the recent move by the RBI to increase risk weights on personal and credit card loans, we expect credit growth to slow down in these segments.
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