The Reserve Bank of India’s Monetary Policy Committee (MPC) has opted to maintain the status quo in its first bi-monthly policy review of the fiscal year 2024-25. This decision leaves the Policy Repo Rate unchanged at 6.5%, a move announced by RBI Governor Shaktikanta Das during the policy announcement. The two-day MPC meeting, responsible for setting interest rates, convened from April 3 to April 5.
This marks the seventh consecutive time that the RBI has decided to keep the key policy repo rate steady at 6.5%, with a majority 5:1 vote by the MPC. The policy stance remains at ‘withdrawal of accommodation,’ reflecting the cautious approach adopted amidst global economic challenges impacting India’s GDP growth and inflation trajectory.
RBI Governor Shaktikanta Das revised India’s real GDP growth forecast for FY24 to 7.6%, up from the previous projection of 7.3%. Additionally, the RBI forecasts CPI inflation for FY25 at 4.5%, assuming normal monsoon conditions. The MPC aims to sustain inflation within the lower range over an extended period, symbolized as the “elephant.” Despite expectations of strong growth in FY25, the RBI maintains its current stance, acknowledging the persisting challenge of inflation and opting to keep interest rates unchanged for now.
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