RBI Monetary Policy Review - Repo Rate Unchanged; Stance Changed To Neutral: IDBI Capital

IDBI Capital Report

In line with expectations, the Monetary Policy Committee continued to retain policy repo rate at 6.5%. However, the committee changed the stance from “Withdrawal of accommodation” to “Neutral”.

Inflation levels for FY25 projections have remained unchanged at 4.5%. Similarly, GDP growth forecast has remained unchanged at 7.2% for FY25.

The standing deposit facility rate remained unchanged at 6.25% along with marginal standing facility rate and the Bank Rate at 6.75%.

The system level liquidity was in surplus of about Rs 1.3 lakh crore in Aug-Sep, but turned into deficit of Rs 0.18 lakh crore between September 21-25. Average system liquidity is in surplus of about Rs 2.3 lakh crore in October so far.

Among our banking coverage universe, our top picks are City Union Bank, IndusInd Bank, and ICICI Bank.

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