MPC of RBI unanimously decides to keep repo rate unchanged at 65%
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Mumbai, Oct 06 Post three-day marathon meeting, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) unanimously decided to keep the repo rate unchanged at 6.5 per cent on Friday. The central bank also retained its policy stance as the "withdrawal of accommodation" with five out of six MPC members voting in favour of this.
Addressing the media later, the RBI governor, Dr Shaktikanta Das said, “The monetary policy committee decided unanimously to keep the policy repo rate unchanged at 6.50 per cent. Consequently, the standing deposit facility (SDF) rate remains at 6.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent.”
The MPC also decided by a majority of five out of six members to remain focused on the 'withdrawal of accommodation' to ensure that inflation progressively aligns to the target, while supporting growth, he added.
The Indian economy is forging ahead in a challenging global environment, drawing strength from its underlying macroeconomic fundamentals and buffers. However, the central bank emphasised there is no room for complacency because of volatile food and energy prices.
According to Das, “Volatile energy and food prices in the wake of lingering geopolitical tensions and adverse weather conditions render uncertainty to the inflation outlook. We remain vigilant of the evolving inflation dynamics.”
There is no change in the growth forecast by the RBI. RBI kept the GDP growth forecast for FY24 unchanged at 6.5 per cent with Q2 GDP growth forecast unchanged at 6.5 per cent, Q3 unchanged at 6 per cent, Q4 GDP growth forecast unchanged at 5.7 per cent and Q1FY25 unchanged at 6.6 per cent.
On a similar lines, RBI’s fight against inflation will continue.
“”I would like to emphatically reiterate that our inflation target is 4 per cent and not 2 to 6 per cent. Our aim is to align inflation to the target on a durable basis while supporting growth,” said Das.
The latest CPI inflation projection for FY24 is 5.4 per cent, with Q2 at 6.4 per cent, Q3 at 5.6 per cent and Q4 at 5.2 per cent. CPI inflation for Q1FY25 is projected at 5.2 per cent.
