RBI’s MPC Meeting In February 2025: Key Details

The RBI-led Monetary Policy Committee (MPC) is set to hold its first meeting of 2025, marking a significant moment in shaping India’s monetary policy for the year.

RBI MPC Meeting Dates

The RBI's Monetary Policy Committee (MPC) will take place according to the schedule for fiscal year 2024-25. This will be the final meeting of fiscal year 2025, which will be place from February 5 to 7, 2025, and the first MPC meeting of 2025.

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Overview of the RBI MPC

The RBI MPC makes essential economic decisions, such as setting the repo rate to control inflation and promote steady growth. The committee shapes India's monetary policy by analysing economic factors such as inflation, GDP, and global trends.

The MPC consists of six members: three RBI officials and three external members appointed by the government, with the RBI Governor serving as the chairperson.

What to Expect in the RBI MPC meet?

The Reserve Bank of India (RBI) is expected to relax the Liquidity Coverage Ratio (LCR) norms, as per a Jefferies report cited by ANI. Due to this change, banks may need to transfer about Rs 7 trillion from loans to government securities or other liquid assets. Also, it emphasises that the RBI may decide to include the Cash Reserve Ratio (CRR) in the liquid asset's calculation. These changes are anticipated to improve liquidity in the banking system and may have a positive impact on banks and non-banking financial companies (NBFCs) in 2025.

The report noted that despite the 50 basis points CRR cut in December 2024, which released Rs 1.1 trillion into the system, tight liquidity conditions persist. Market participants are hoping for further clarity on LCR norms and other regulatory measures in the upcoming MPC meeting. Another report by Jefferies, cited by ANI, mentions, “After easing the stance on liquidity and CRR by 50bps, the RBI may review policy rates; we anticipate 50bps rate cuts in 1H25.”