More Stories

Informist, Wednesday, Apr. 9, 2025

MUMBAI - Following are the highlights of the statement made by Reserve Bank of India Governor Sanjay Malhotra on Wednesday after the first bi-monthly meeting of the Monetary Policy Committee for 2025-26 (Apr-Mar):

KEY TAKEAWAYS

* MPC voted unanimously to cut repo rate by 25 bps 

* MPC voted unanimously to cut repo rate by 25 bps to 6.00%

* SDF rate adjusted to 5.75%
* MPC changed stance to accommodative

* Policy stance has been subject of plenty of commentary
* Our stance signals intended policy direction
* Policy stance should not be linked with liquidity conditions
* Stance means MPC only considering status quo or rate cut
* Stance change to not be associated with liquidity conditions
* Minutes of Apr MPC meeting to be released on Apr 23
 

INFLATION

* Apr-Jun CPI inflation seen at 3.6% vs 4.5% earlier
* Jul-Sep CPI inflation seen at 3.9% vs 4.0% earlier
* Oct-Dec CPI inflation seen unchanged at 3.8%
* Jan-Mar CPI inflation seen 4.4% vs 4.2% earlier

* Greater confidence about durable alignment of inflation with target
* More confidence of durable alignment of headline CPI with 4%

* Sharper than expected food inflation fall given us comfort

* Outlook on food inflation has turned decisively positive

* Risks to inflation two sided
* Tariff uncertainty may lead to pressure on rupee, imported inflation
* Upside risks to CPI include currency depreciation
* Upside risks to CPI include imported inflation
* Don't see high concern for India inflation from tariffs

* Crop estimates suggest durable decline in food inflation
* Falling crude prices augur well for inflation
* Cuts FY26 CPI inflation forecast to 4.0% from 4.2% earlier
* Risks to inflation forecasts are evenly balanced
 

GROWTH

* Cuts FY26 GDP growth forecast to 6.5% from 6.7%

* Cuts Apr-Jun GDP growth forecast to 6.5% from 6.7%
* Cuts Jul-Sept GDP growth forecast to 6.7% from 7.0% earlier
* Hikes Oct-Dec GDP growth forecast to 6.6% from 6.5% earlier
* Cuts Jan-Mar 2026 GDP growth forecast to 6.3% from 6.5% earlier

* MPC continues to support growth
* Risks to growth forecasts are evenly balanced

* Uncertainties around growth projections remain high
* Growth is recovering, lower than what we aspire for

* Quantification of adverse impact on growth difficult

MACROECONOMY

* FY26 has begun on an anxious note

* Some trade frictions are coming true, unsettling globe

* Global economic outlook is fast changing

* Recent trade tariff measures have exacerbated uncertainties

* Recent trade tariff measures a headwind for global econ

* Aiming for non-inflationary growth
* Domestic inflation-growth path demands monetary policy support growth

* Will remain agile, decisive in our policy response
* Monetary policy can play anchoring role to ensure stable econ

* Central bks are navigating cautiously in these circumstances

* Evolving situation needs monitoring of econ outlook
* Situation requires continuous monitoring and assessment
* Indian econ made steady progress on price stability, growth
* Uncertainty itself dampens growth by affecting investment decisions
* Higher tariffs will hurt net exports
* Global growth, dented by trade frictions, will impede local growth
* India very proactively engaging with US on trade agreements
* Services sector activity resilient
* Prospect of agri sector remains bright
* Manufacturing showing signs of a revival
* Bright prospects on agri positive for rural demand
* Urban consumption gradually picking up
* Services exports to remain resilient

* Merchandise exports to be weighed down by global uncertainties

* Investment activity expected to pick up

* Global econ going through period of exceptional uncertainty
* Difficulty to extract signal poses policymaking challenge
 

FINANCIAL MARKETS

* CAD for FY25, FY26 to remain within sustainable levels

* Svcs exports remain resilient
* Remittances, svcs trade expected to remain in large surplus

* ECB witnessed higher net inflows vs last year
* India's external sector remains resilient
* India FX reserves show import cover of around 11 mos
* Weighted avg call rate softened, near call since Feb policy
* Committed to provide sufficient liquidity
* Will proactively take measures to ensure adequate liquidity
* Banking system fundamentals continue to be robust
* Liquidity buffer in banking system well above regulatory threshold
* Systemic level parameters for NBFCs also very sound
* Profitability indicators of banks remain healthy
* Propose to enable securitisation of stressed assets via mkt system

* Securitisation of stressed assets via market in addition to ARC route
* Co-lending norms to extend to all regulated entities, loans
* To issue comprehensive guidelines on loans against gold
* To issue comprehensive guidelines for non-fund based entities
* To issue comprehensive norms for partial credit enhancement
* NPCI can now decide UPI transaction limits in consultation with banks
* Regulatory sandbox to be theme-neutral, on-tap
* No change in person-to-person UPI transaction limit

End

Compiled by Vinod Bhovad

Filed by Vandana Hingorani

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.