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Through Bloomberg Lense - RBI Monetary Policy Live

09-Oct-2024

On the 9th of October, 2024, Xavier Institute of Management and Research (XIMR) hosted a live Monetary Policy Session in Xavier Fintech Lab, specifically for MMS finance students. This engaging event was structured into three segments, each offering profound insights into India’s economic landscape and fostering an environment of active learning and critical thinking.

Part 1: Understanding the Macro Scenario in India

The first segment focused on providing students with a comprehensive understanding of the current macroeconomic scenario in India. The session began with an overview of the country's Purchasing Managers’ Index (PMI) composite, which had shown signs of a slowdown. Despite the general low inflation rates, food inflation continued to be persistently high, a phenomenon causing significant concern. A notable point of discussion was the steady repo rate, which had been fixed at 6.5% for the past nine Monetary Policy Committee (MPC) meetings. This segment was crucial for setting the stage for the following discussions by equipping students with the necessary context and data.

Part 2: Live Viewing of the RBI Governor's Address

In the second segment, students and faculty gathered to watch the live address of the Reserve Bank of India (RBI) Governor. This part of the session was particularly interactive as participants used the NSE website and Bloomberg Terminal to monitor the real-time market reactions to the policy announcements. This hands-on experience allowed students to see firsthand the immediate impact of monetary policy decisions on financial markets, bridging the gap between theoretical knowledge and practical application.

Part 3: Post-MPC Discussion and Analysis

The final segment of the session was dedicated to a thorough discussion of the key points mentioned by the RBI Governor. Faculty and students delved into the rationale behind the RBI’s decision to change the policy stance while maintaining the policy rate. The discussions covered a wide array of topics including the inflation versus growth trade-off, India’s burgeoning foreign exchange reserves, the widening current account deficit (CAD), and the dynamics of India’s imports and exports. This part of the event was particularly stimulating, as it encouraged students to form and articulate their own perspectives on the Indian economy.

In addition to the insightful discussions, a contest was organized where students predicted the RBI's policy stance and rate decision prior to the Governor’s speech. Three students, who accurately forecasted both parameters, were felicitated with small gifts, adding an element of excitement and engagement to the session.

Overall, the Live Monetary Policy Session at XIMR was a resounding success, providing MMS finance students with invaluable insights and a deeper understanding of India's economic environment. The event not only enhanced their analytical skills but also inspired them to stay informed and actively participate in economic discussions.

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