In its bi-monthly policy review meeting, the monetary policy committee (MPC) on February 8 decided to keep the repo rate unchanged at 6.5 percent. It has remained at this level since February 2023.
LKP Securities estimates bank credit growth to be around 15% for FY24, around 400bps higher of India’s nominal GDP. Deposit growth is expected to be at 11% as the banks are raising the deposit rates.
Odds are high for a recession next year as the central bank continues albeit at a slower pace to boost borrowing costs in an effort to bring price pressures under control