The Reserve Bank of India’s Monetary Policy Committee has decided to keep the repo rate unchanged at 6.5% for the sixth time in a row.
The RBI governor pointed out that the withdrawal of accommodation stance should be viewed in light of the fact that CPI is not yet at the 4% target and full transmission of the cumulative 250 basis points hike is still underway.
The governor also said that the RBI MPC is cautious against premature easing and is resolute in bringing CPI down to 4%. GDP growth for FY25 has been projected at 7% while CPI inflation has been projected at 4.5%.
First RBI credit policy of 2024
The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) commenced its first meeting of the year on February 6, 2024.
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During the last MPC, for the fifth consecutive time, the RBI maintained the repo rate at 6.5 percent. The last adjustment occurred in February 2023, increasing the rate from 6.25 percent.
He said MPC will remain watchful of food inflation so that the benefits gained are not frittered away.
This is the first bi-monthly policy following presentation of Interim Budget 2024-25 last week.
In December, the Consumer Price-based Inflation (CPI) stood at 5.69 per cent.
The government has mandated RBI to ensure CPI inflation at 4 per cent with a margin of 2 per cent on either side.