RBI MPC Meeting Key Highlights: Repo Rate Remains Unchanged At 6.5%, GDP Growth Forecast At 7% For FY25

RBI MPC Meeting: RBI Governor Shaktikanta Das adhered to the expected course of action by maintaining the status quo, which did not come as a surprise to the markets

These RBI MPC announcements came after Union Finance Minister Nirmala Sitharaman presented the interim Budget in the Parliament

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Reserve Bank of India's (RBI) Governor Shaktikanta Das held the Monetary Policy Committee meeting’s (MPC) announcement on Thursday, during which Das said that the RBI has decided to keep key policy rates unchanged. These RBI MPC announcements came after Union Finance Minister Nirmala Sitharaman presented the interim Budget in the Parliament on February 4.

RBI Governor Shaktikanta Das adhered to the expected course of action by maintaining the status quo, which did not come as a surprise to the markets. 

Here Are the Key Highlights Of RBI's Bi-monthly Monetary Policy Announcements:

• The benchmark interest rate, also known as the repo rate, remains unchanged at 6.5 per cent.
• The projected GDP growth for the fiscal year 2024-25 is 7 per cent, slightly lower than the 7.3 per cent recorded this fiscal year.
• Retail inflation is forecasted to average 5.4 per cent for the current fiscal year, with expectations to decrease to 4.5 per cent in the fiscal year 2024-25.
• Monetary transmission by financial institutions continues to be incomplete.
• The current economic momentum is expected to be sustained in the next fiscal year.
• The recovery in rabi sowing sustained profitability in manufacturing, and the resilience of services are anticipated to support economic activity in 2024-25.
• The investment cycle is gaining steam, with signs of revival in private sector capital expenditure.
• The Indian economy is confidently progressing along a robust and sustained growth trajectory.
• Rural demand is steadily increasing in momentum, while urban consumption remains robust.
• The government is sticking to its fiscal consolidation path, and domestic economic activity remains robust.
• The domestic financial system continues to exhibit resilience with a robust balance sheet.
• Ambiguity in food prices continuously affects headline inflation. 
• Rising geopolitical tensions are influencing supply chains, thereby exerting pressure on commodity prices. The forex reserve stands at $ 622.5 billion, providing a comfortable buffer for fulfilling foreign obligations.
• Regulated entities are urged to prioritise compliance and the protection of consumer interests. Additionally, the RBI plans to introduce an offline functionality in CBDC Retail to facilitate transactions in regions with inadequate internet connectivity.
• The exchange rate of the Indian rupee has remained relatively stable throughout the current fiscal year.