RBI MPC Highlights: From Repo Rate To CPI Inflation Numbers; Here Are The Major Announcements By Guv Malhotra

RBI MPC: Headline inflation softened in November-December 2024, down from a peak of 6.2 per cent in October, primarily due to lower food inflation, especially in vegetables

The Reserve Bank of India (RBI) Governor Sanjay Malhotra

Source : PTI

The Reserve Bank of India (RBI) Governor Sanjay Malhotra announced the outcomes of its 53rd Monetary Policy Committee (MPC) meeting. The MPC meeting started on February 5, 2025, and the decision was announced today. His address offered key insights into the RBI’s policy stance, GDP growth projections, and inflation outlook.

This time central bank decided to slash the key policy rates by 25 basis points to 6.25 per cent.

The Monetary Policy Committee (MPC) is chaired by Sanjay Malhotra, the Governor of the Reserve Bank of India (RBI). "MPC policy is a force of interest for many; it impacts the lives of all citizens of the country. MPC resolution provides the rationale and thought process of the committee," said Governor Malhotra during his address.

Here Are Some Of The Major Announcements:

The committee decided to reduce the key repo rate by 25 basis points to 6.25 per cent, effective immediately. The RBI will continue with a neutral monetary policy stance.

The standing deposit facility (SDF) rate is adjusted to 6.00 per cent, while the marginal standing facility (MSF) rate and the Bank Rate are set at 6.50 per cent.

Real GDP growth for 2024-25 is projected at 6.4 per cent year-on-year (YoY), supported by the recovery in private consumption, services, and agriculture.

Real GDP growth for 2025-26 is projected at 6.7 per cent, with quarterly estimates as follows: Q1: 6.7 per cent, Q2: 7.0 per cent, Q3 and Q4: 6.5 per cent. Risks are balanced, said the RBI governor.

Headline inflation softened in November-December 2024, down from a peak of 6.2 per cent in October, primarily due to lower food inflation, especially in vegetables. Core inflation remains subdued across goods, services, and fuel components. Future inflation trends show food inflation is expected to soften significantly, supported by favourable kharif and rabi crop prospects, as well as easing vegetable prices.

CPI inflation projections: For 2024-25, it is forecasted at 4.8 per cent, with Q4 at 4.4 per cent. For 2025-26, the projection is 4.2 per cent, with quarterly estimates as follows: Q1: 4.5 per cent, Q2: 4.0 per cent, Q3: 3.8 per cent, Q4: 4.2 per cent. Risks are evenly balanced.