New Delhi : The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) decided to maintain the repo rate at 6.5 percent on Thursday, marking the sixth consecutive occasion of keeping the policy rates unchanged. This decision comes after a pause in the rate increase cycle in April 2023, following six consecutive rate hikes totaling 250 basis points since May 2022.
RBI Governor Shaktikanta Das announced that five out of six MPC members voted to retain the stance on “withdrawal of accommodation.”
RBI’s projections indicate retail inflation at 5.4 percent for the current fiscal year and 4.5 percent for 2024-25, emphasizing the central bank’s focus on aligning inflation targets to a durable 4 percent level.
Governor Das emphasized the need for vigilant monetary policy to navigate the final stages of disinflation, reaffirming the MPC’s commitment to containing inflation at the 4 percent target. He highlighted the government’s adherence to fiscal consolidation as per the Interim Budget and anticipated continued momentum in economic activity for the fiscal year 2024-25.
RBI anticipates a real GDP growth of 7 percent for FY’25 with balanced risks, though increasing geopolitical tensions may impact supply chains and exert pressure on commodity prices, especially crude oil.
In the credit market, monetary transmission remains incomplete, prompting RBI to maintain nimble and flexible liquidity management.
Key policy rates include:
- Repo rate: 6.5 percent
- Fixed Reverse Repo Rate: 3.75 percent
- Standing Deposit Facility Rate: 6.25 percent
- Marginal Standing Facility Rate: 6.75 percent
- Bank Rate: 6.75 percent
