THE JHARKHAND STORY DESK
New Delhi, Feb 8: Governor of the Reserve Bank of India (RBI), Shaktikanta Das, announced on Thursday that the Monetary Policy Committee (MPC) of the central bank opted to maintain the key repo rate at 6.5 per cent.
This is the sixth time that the six-member Monetary Policy Committee (MPC) has decided to keep interest rates steady, with the key repo rate remaining at 6.5 per cent.
“After a detailed assessment of the evolving macroeconomic and financial developments and the outlook, the Monetary Policy Committee decided by a 5 to 1 majority to keep the policy rate unchanged at 6.5 per cent,” the RBI Governor stated.
SDF, MSF, bank rate
He mentioned that the rate for the standing deposit facility (SDF) is at 6.25 per cent, while the rates for the marginal standing facility (MSF) and the bank rate are at 6.75 per cent.
In order to guarantee that inflation gradually converges to the target while promoting growth, Das said the MPC has also chosen to maintain its emphasis on “withdrawal of accommodation”.
Strong domestic economic activity, rising headline inflation, and softening commodity prices were the RBI Governor’s justifications for maintaining the key rates.
Inflation
Das continued by stating that an estimated 4.5% inflation is expected for the upcoming fiscal year, with 5.0% expected in Q1, 4.0% in Q2, 4.6% in Q3, and 4.7% expected in Q4.
“Monetary policy has to remain vigilant to successfully navigate last mile of disinflation. MPC remains resolute on containing inflation at target of 4 per cent. MPC will carefully monitor any sign of pressure on food prices. Going by Interim Budget, government is adhering to fiscal consolidation. Momentum in economic activity expected to continue in fiscal year 2024-25 also,” Das stated.
GDP growth at 7%
In the meantime, the RBI has predicted that the GDP growth rate of the Indian economy will remain at 7% in FY25.
“Increasing geopolitical tension impacting supply chain and putting pressure on commodity prices especially crude oil,” he stated.
“In credit market, monetary transmission still remains incomplete. RBI remains nimble and flexible in managing liquidity,” the RBI Governor added.
