Street sees no major surprise in RBI's interest rate pause decision

Realty stocks could see more gains while banking and NBFCs may witness a relief rally

The Reserve Bank of India’s (RBI’s) Monetary Policy surprised most commentators who were expecting a 25 basis points (bps) hike. However, while the MPC unanimously voted to hit pause on the rate hikes, it will also continue to tighten money supply in “withdrawal of accommodation”. 

The central bank lowered its inflation projections for the fourth quarter of the 2023-24 financial year (Q4FY24) by 40 bps while also lowering its Q1FY24 inflation expectations by 10 bps. The MPC dropped its FY24 CPI inflation forecast to 5.2 per cent (from 5.3 per cent previously), on the basis of moderating crude prices. 

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