The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) has decided to keep the policy repo rate unchanged at 6.5% at its first meeting of FY25, as retail inflation continues to be above its target of 4 per cent. This is the seventh time, the MPC has maintained a status quo on the repo rate (the interest rate at which banks draw funds from RBI to overcome short-term liquidity mismatches). RBI has also maintained the stance of 'withdrawal of accommodation'. The Standing Deposit Facility rate remains at 6.25 per cent and the Marginal Standing Facility rate and Bank Rate remain at 6.75 per cent.
The RBI has projected the GDP growth for 2024-25 at 7% for the Indian economy. Quarterly break-up is projected at 7.1% in Q1, 6.9% in Q2 and 7% in Q3 and Q4. The risks are evenly balanced. Assuming a normal monsoon, the RBI has projected that CPI inflation for FY 2024-25 will be at 4.5%. On a quarterly basis, CPI inflation is expected to be 4.9% in Q1, 3.8% in Q2, 4.6% in Q3, and 4.5% in Q4. The risks are evenly balanced.
