The RBI’s policy statement was fairly balanced, remaining upbeat on growth and marginally bringing down its inflation forecasts. Although, the central bank highlighted that risks around its inflation projections due to any global or domestic supply shocks continue to linger. The RBI pegged growth at 7% for FY25 and inflation at 4.5%. The central bank kept both its policy rate and stance unchanged.
The RBI left little room for any imminent policy pivot and therefore we do not expect rate cuts to happen before the August 2024 policy. On liquidity, the central bank seemed to suggest that liquidity deficits were broadly frictional and durable liquidity remained more comfortable. It did not announce any new measures and said that it would continue to manage liquidity through its fine-tuning operations including tools like the variable rate repo and reverse repo auctions.

Mr. Abheek Barua
Chief Economist
HDFC Bank