Will Shaktikanta Das-led MPC cut repo rate on Friday? What to expect from the final policy review of 2024
Will RBI announce rate cut on December 6? On Wednesday, 4 December, the Reserve Bank of India Governor’s Monetary Policy Committee—the central bank’s rate-setting body—began its last bimonthly review meeting of the year. Once again, the question on everyone’s mind is: Will the repo rate be cut this time? If not the repo rate, will the MPC decide to change any other key rate? The December 4-6 revision comes amid a 7-quarter low GDP growth and sticky inflation, beyond the upper end of the RBI’s tolerance range of 2-4 percent.
When will RBI Governor Shaktikanta Das announce policy decisions?
As per tradition, the RBI Governor will announce policy decisions at 10 am.
Upcoming:
Monetary Policy Statement on #RBI The ruler @DasShaktikanta
on December 06, 2024, 10:00 am Watch live at: https://t.co/IlVH3hYA5d
Live broadcast of the Post-policy press conference at 12:00… pic.twitter.com/7cAan1v3TB— ReserveBankOfIndia (@RBI) December 5, 2024
The RBI governor will also address a post-policy press conference at noon.
Will there be a rate cut on December 6?
Many economists believe there will be no change in the upcoming policy statement.
According to a Zee Business survey, eight out of ten economists polled do not expect a change in the repo rate in the December review.
Foreign brokerage Nomura kept the call without consensus, expecting a 25 basis point cut in the repo rate, to 6.25%, on December 6.
Six out of 10 economists polled expect a rate cut in December policy, according to the survey.
RELATED: What is CRR? Analysts expect the CRR to be lowered in the RBI’s December policy review
Economists are also divided on the timing of the next rate cut. While six out of ten economists expect the first rate cut to take place in February, two expect it in December itself, and the remaining two expect it in December or February.
Would you expect the RBI to change its GDP and inflation forecasts?
All the economists polled expect the RBI to change its inflation and GDP forecasts.
What happened in the October policy review?
At the October two-month review, the MPC unanimously switched to a ‘neutral’ policy stance from ‘local withdrawal’ while voting 5:1 to keep the repo rate unchanged.
The neutral stance allows the RBI to move in either direction with rates based on domestic macroeconomic conditions.
Additionally, the RBI maintained its full-year GDP and inflation projections at 7.2 percent and 4.5 percent respectively.
ALSO READ: October RBI MPC review: No change in repo rate, stance revised to ‘neutral’, announces Shaktikanta Das
