RBI Monetary Policy: Repo Rate Holds Steady at 6.5%
The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) has made a pivotal announcement, maintaining the repo rate at 6.5 per cent. This decision marks the sixth consecutive time the rate has remained unchanged, following closely on the heels of the Interim Budget presented on February 1, 2024. The RBI’s stance continues to focus on the withdrawal of its accommodative monetary policy, aiming to balance inflation control with economic growth. The next meeting of the MPC is scheduled during April 3 to 5, 2024.
In a recent meeting that concluded on February 8, 2024, five out of six MPC members voted in favour of keeping the repo rate steady. This move was widely anticipated by financial experts, who expected the rate to remain at 6.5 per cent. RBI Governor Shaktikanta Das emphasized the importance of a disinflationary stance in monetary policy to ensure inflation aligns progressively with the target.
The RBI has maintained its inflation forecast at 5.4 per cent for the fiscal year 2023-2024, with a detailed outlook for the following year predicting a Consumer Price Index (CPI) inflation of 4.5 per cent. This detailed projection includes quarterly estimates, starting with 5 per cent in the first quarter and gradually adjusting to 4.7 per cent by the fourth quarter of FY 2024-2025.
Real GDP growth for FY25 is projected at 7%
The MPC’s decision comes with several significant announcements aimed at strengthening the economy and ensuring financial stability:
The RBI MPC is comprised of six members, including both external members and RBI officials. This includes the RBI Governor, 2 deputy governors, and 3 external members
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