RBI Credit Policy: Repo rate unchanged at 6.5% for 7th time in a row

RBI Monetary Policy Meet April 2024: In the first Monetary Policy meet for the financial year 2024-25 the Reserve Bank of India has kept the repo rate unchanged at 6.5% for the seventh time in a row. The Central Bank has also maintained the withdrawal of accommodation stance which means the RBI has decided to reduce the money supply in the system to rein in Inflation.

The RBI had increased the repo rate in the last quarter of FY23 by 25 basis points under the liquidity adjustment facility. Since then the interest rate has been kept unchanged.The RBI has also maintained the SDF rate at 6.25% and MSF rate at 6.75%.

RBI Governor on Inflation

RBI governor Shaktikanta Das mentioned that the MPC remains vigilant to the upside risks to inflation, that may derail the path of disinflation. He added that the monetary policy must continue to be actively disinflationary to ensure anchoring of inflation expectations and fuller transmission of the past, monetary policy actions. The MPC will remain resolute in its commitment to aligning inflation, to the target, he said.

Economic Projections

GDP growth for 2024-25 has been projected at 7% while CPI inflation for the same period is projected at 4.5%. India's GDP growth rate in the quarter ended December 2023 stood at 8.4% which was above RBI’s estimates. In the February policy too, RBI had projected India’s GDP to grow at 7% in FY25.

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