RBI Monetary Policy Update : Shaktikanta das

The Reserve Bank of India's (RBI) Monetary Policy Committee headed by Governor Shaktikanta Das keep repo rate unchanged at 6.5%. The central bank also retained FY24 GDP growth forecast at 6.5%

The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) held its second bi-monthly monetary policy meeting of FY24, deciding to leave the repo rate unchanged at 6.5%. The MPC voted 5 members to 1, keeping the focus on the withdrawal of accommodation. The RBI also maintained its FY24 GDP growth forecast at 6.5% while expecting FY24 CPI inflation to be at 5.1%.

The RBI has been committed to keeping inflation at the target rate of 4%, and the MPC's decision to leave the repo rate unchanged is in line with this. This decision is expected to help keep the Indian economy on an inflation-targeting path. The MPC also noted that the Indian economy has shown signs of recovery, although it is yet to reach pre-pandemic levels.

The RBI also revised the outlook for FY24 GDP growth to 6.5% from the earlier forecast of 7.2%. This revision is in line with the global economic outlook, which has been weakened by the pandemic. The RBI also expects CPI inflation to stay at 5.1% in FY24, slightly higher than the earlier forecast of 4.7%.

Overall, the MPC's decision to leave the repo rate unchanged reflects the RBI's commitment to keeping inflation at the target rate of 4%. This decision is expected to help keep the Indian economy on an inflation-targeting path, while also providing some support to the country's economic recovery.

Share market end in red.

Midcap and small cap performance were noteworthy with the Nifty Midcap 100 index closing at 34200.40 down by 0.55%. Similarly, Nifty Smallcap 100 index ended at 10455.30 down by 0.95%.

Sensex ended at 62,848.64 down by 294.32 points or 0.47%. While Nifty 50 closed at 18,634.55, lower by 91.85 points or 0.49%. Bank Nifty shed over 280 points or 0.63%

The overall market breadth was in favour of the bears as 1,328 stocks on the NSE ended in red while 1,208 stocks ended in the green.

Analysts attributed the negativity in the market to mixed global cues and profit booking. Despite in-line monetary policy outcomes by RBI, Indian market ended in red on Thursday.

Major banking stocks such as Axis Bank, and Kotak bank were top laggards for the day. Nifty Auto index ended at 14692.00 down by 0.86%. Automobile stocks including Tata Motors, Mahindra & Mahindra were among the top losers.




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