NO CHANGE IN DECEMBER POLICY RATES - HOW AND WHY

NO CHANGE IN DECEMBER POLICY RATES - HOW AND WHY

Tuesday, December 05 2023

The MPC is likely to go in for an unchanged benchmark policy rates  on Dec , 8, 2023. This Policy would be announced against the backdrop of mixed macro economic and global canvas. Positive cues included unchanged Fed Reserve policy in the range of 5.25 % to 5.50 % for the second time on Nov.2, 2023, average crude price at below $85 per barrel for 8 months upto Nov, CPI inflation dropping from 5.02 % in Sept 2023 to 4.87 % in Oct., comfortable foreign exchange reserves of $ 600 billions and current account deficit (CAD) at 1.1 % of GDP in April -June 2023. There has been a robust GDP growth of 7.6 % on top of 7.8 % in Q1. This growth was spearheaded by manufacturing sector growth of 13.9 % over last year. Fiscal deficit has been restricted at 45% of the targeted estimates of April/Sept 2023 on surging direct and indirect taxes. Tailwinds also include  corporate profitability and investments.

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