Initial Thoughts - Balanced Policy - Growth Revised Higher while Inflation Projections Retained

"Progress is absolutely assured when there is unalterable dedication to the purpose."

Interest Rate Decision   

Unchanged at 6.5% and Monetary Policy Corridor at 6.25% (SDF) and 6.75% (MSF)

Monetary Policy Stance

Maintained the stance as withdrawal of Accommodation 

Liquidity Management Framework

On the liquidity front, Liquidity deficit turned neutral as Government spending kicked in. RBI announced a reversal of liquidity facilities during weekends and holidays from Dec 30 and the measure will be reviewed after 6 months or earlier. The objective of this measure was to institute better fund management by banks. 

There was no need for OMO Sales as system liquidity deficit remained in deficit before turning neutral at start of Dec while keeping the door open for OMO Sales

The Outlook for FY 24 Growth was materially revised higher by 50 bps while Inflation Outlook was retained at 5.40%.