RBI Monetary Policy 🔥 banknifty gap up or gap down Friday | kal ka market kaisa rahega

Summary

In this video, the speaker provides a detailed analysis of recent market movements and updates from the RBI's monetary policy. Key highlights include the reduction of the Cash Reserve Ratio (CRR) from 4.5% to 4%, injecting ₹1.6 lakh crore into the banking system, which is expected to boost liquidity. Despite concerns over inflation and GDP growth, the RBI has kept repo rates unchanged. The speaker discusses the revised GDP forecast of 6.6% for FY2025 and rising inflation estimates. The video offers valuable insights for traders and investors to understand market dynamics amidst these economic shifts.

Takeaways

• 😀 The market is currently experiencing high volatility, with sudden ups and downs in Nifty and Bank Nifty.
• 😀 The Reserve Bank of India (RBI) has reduced the Cash Reserve Ratio (CRR) from 4.5% to 4%, injecting 1.6 lakh crores into the economy.
• 😀 CRR is a percentage of bank deposits that banks must hold with the RBI, and the reduction aims to improve liquidity and stimulate economic activity.
• 😀 The reduction in CRR is expected to have a positive impact on the stock market, particularly on banking stocks, as it increases liquidity.
• 😀 Despite this positive move, the RBI has kept its monetary policy unchanged, with no changes to interest rates or repo rates.
• 😀 The RBI's forecast for GDP growth in FY 2025 has been revised down to 6.6% from the previous 7.2%, reflecting slower growth projections.
• 😀 Inflation in India is expected to remain a concern, with estimates for Q3 and Q4 showing higher inflation than previously forecasted.
• 😀 The RBI has revised its inflation forecast for FY 2025, increasing it from 4.5% to 4.8%, signaling persistent inflationary pressures.
• 😀 Industrial activity in rural areas is expected to improve, thanks to strong demand during the festive season.
• 😀 The global market, especially in the U.S., showed a decline, which may influence the Indian stock market's movement for the day.

Q & A

What is the current state of the market as discussed in the video?

The market is experiencing significant fluctuations, with Nifty moving up and down sharply. The current situation is volatile, and it is not an ideal time to take big steps in the market.

How does the recent RBI policy impact the market?

The RBI has reduced the Cash Reserve Ratio (CRR) for banks from 4.5% to 4%. This move will release around ₹1.6 lakh crore liquidity into the market, which is expected to have a positive impact on the banking sector's stock prices.

What is CRR and why is the reduction significant?

The Cash Reserve Ratio (CRR) is the portion of a bank's deposits that must be kept in reserve and cannot be used for lending or investment. The reduction of CRR by 0.5% frees up ₹1.6 lakh crore for banks to use in the economy, potentially boosting market liquidity and supporting loan disbursements.

How does the RBI’s policy affect the banking sector?

The reduction in CRR will likely lead to increased liquidity in the banking sector, which could improve bank stocks as they now have more funds available for lending and other activities.

What was the RBI’s stance on monetary policy changes?

There were no significant changes in the monetary policy, with the repo rate and other key rates remaining the same. This suggests that the RBI is maintaining its stance in the face of ongoing inflation and economic challenges.

How has India’s GDP growth forecast changed?

India's GDP growth forecast for financial year 2025 has been reduced from 7.2% to 6.6%, reflecting the challenges faced by the economy. Additionally, growth projections for Q3 have been revised downward from 7.4% to 6.8%.

What is the outlook for inflation in India?

Inflation in India is expected to rise in Q3 to 5.7%, up from a previous estimate of 4.8%. However, inflation is projected to decrease in Q4, with expectations of reaching 4.2%. The overall inflation forecast for FY 2025 is now 4.8% instead of the earlier 4.5%.

What effect will the liquidity boost from the CRR cut have on the economy?

The ₹1.6 lakh crore liquidity boost from the CRR cut will likely improve economic activity by enabling banks to lend more, which could support business investments and consumer spending.

What is the likely impact of the RBI’s policy on the small-cap sector?

The small-cap sector is currently in a relatively stable phase, but the overall market volatility, influenced by RBI's policy changes, may lead to further fluctuations, especially in sectors like IT which are facing some pressure.

Will the RBI reduce interest rates in the near future?

It is unlikely that the RBI will reduce interest rates in the near future, as inflation is still not under control and GDP growth is weakening. The RBI seems to be in a wait-and-see mode, keeping the rates unchanged for now.