In its latest monetary policy review, the Reserve Bank of India (RBI) has decided to keep the repo rate unchanged at 6.5%, marking the eighth consecutive time this rate has remained steady.
The decision to maintain the current rate was made by the RBI’s six-member Monetary Policy Committee (MPC), as the central bank continues to focus on the ‘withdrawal of accommodation’. This policy stance aims to gradually reduce the supportive measures introduced during the pandemic to stabilize the economy.
RBI Governor Shaktikanta Das announced an upward revision in the projected real GDP growth for the financial year 2024-25, now set at 7.2%, an increase from the previous estimate of 7%. “The GDP growth that we are now projecting for the current financial year 2024-25 is 7.2%, with Q1 at 7.3%, Q2 at 7.2%, Q3 at 7.3%, and Q4 at 7.2%. The risks are evenly balanced,” stated Governor Das.
In addition to maintaining the repo rate, the RBI highlighted its commitment to a gradual withdrawal of its accommodative stance. The central bank’s outlook is further supported by expectations of a normal southwest monsoon, which is anticipated to boost kharif crop production and improve water storage levels in reservoirs.
The RBI has kept the inflation forecast for FY25 steady at 4.5%. Governor Das reaffirmed the central bank’s dedication to restoring inflation to the target of 4% over the long term, underscoring the RBI’s focus on maintaining price stability while supporting economic growth.
