Analysis of RBI Monetary Policy Review Statement 2024-25

The webinar began with introductions and an overview of the agenda, which included presentations on the economic outlook, monetary policy announcements, impacts of the policy, and a discussion segment.

Global and domestic economic outlook

Sundarajan presented the global and domestic economic context in which the monetary policy decisions were taken. He outlined stable global growth and resilience, with India's economy projected to grow at 7.6% in 2023-24 led by manufacturing and construction. Inflation was analyzed along with other economic indicators.

Monetary policy announcements

Dr. Rao presented the key announcements from the monetary policy statement. The repo rate was kept unchanged at 6.5%, and measures relating to sovereign green bonds, retail participation in GSecs, and reviews of LCR and allowing small finance banks to deal in derivatives were summarized.

Analysis of policy impacts

Shri Kalia analyzed the positive sectoral impacts of continued growth on banks but flagged rising equity investments and the need to boost deposits. Food inflation and global uncertainties were risks, but domestic growth momentum and financial stability provided optimism if inflation moderates.

Discussion on the inflation outlook

Concerns around elevated global food prices impacting Indian inflation trajectories were addressed, with RBI monitoring all factors closely. Differing views emerged on the timing of potential rate cuts.