The meeting of Monetary Policy Committee(MPC) of Reserve Bank of India(RBI) held on December 6,2024 revised its inflation forecast to 4.8% up from the previously calculated 4.5% projection. The MPC maintained its inflation forecast at 4.5% until October 2024 meeting.
Regarding rate cut, the MPC maintained its neutral monetary policy stance and did not deliver a decision on rate cut, but at the same time the RBI(MPC) did pare down economic growth.
The RBI(MPC) decided to revise its inflation forecasts to 4.8% after considering disappointing economic data of first two quarters of Financial Year 2024-2025.
During the first half of the financial year the inflation rate exceeded beyond RBI's expectations and breached its upper tolerance level of 6% in October 2024.
In the meeting the MPC (RBI) slashed Cash Reserve Ratio (CRR) by 50 bps. In the opinions of Charterd Accountants, Fund Managers and other financial analysts the decision to slash the CRR will lead to infusion of 1.16 lakh crore into the banking sector.