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RBI MPC:The meeting of the Monetary Policy Committee of the Reserve Bank of India is going on from 4th December and its monetary policy will be announced on Thursday 6th December. This credit policy is going to be very important for Reserve Bank Governor Shaktikanta Das. In this, RBI will have to take into account the concerns of inflation and the decline in the country’s growth rate in the second quarter.
Nomura’s estimate on rates is different
While most economists and financial experts are predicting a credit policy with no change in interest rates this time too, the estimate of Japanese investment bank Nomura is different. According to Nomura, in the December credit policy, RBI can cut the repo rate by 0.25 percent or 25 basis points and bring it to 6.25 percent. RBI has not made any change in the policy interest rates since the last 10 credit policies and it remains at 6.50 percent.
A total reduction of 100 bps in repo rate is possible by mid-2025
Nomura has also estimated that by the middle of next year (2025) i.e. by June, RBI can reduce the repo rate by 100 basis points or 1 percent, after which it will come down to 5.50 percent. This will start with the last policy of this calendar year i.e. the monetary policy coming tomorrow and a quarter percent reduction will be seen in it. RBI last changed it in February 2023 and it was brought down to 6.5 percent.
Nomura also reduced GDP estimates
Nomura has also reduced the GDP estimate for the financial year 2024-25 to 6 percent from 6.9 percent. Apart from this, the growth estimate of Reserve Bank of India which is 7.2 percent has been estimated to be less than that.
Nomura said that the combined impact of slow GDP growth, moderate credit growth, rising inflation and weak rupee will be seen in RBI’s decision. Based on all these facts, RBI can take a decision on rate cut but even if it does not do so, we are positive about India’s medium term outlook.
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