The Reserve Bank of India (RBI) on Thursday (August 8) announced its Monetary Policy decision, keeping the repo rate unchanged at 6.50 per cent for the ninth straight time. This decison was followed after a 2-day Monetary Policy Committee which was held from Tuesday to Thursday during its third bi-monthly policy meeting for the fiscal year 2024-25.
Here are the key highlights from the RBI MPC meeting:
1. Policy rates unchanged: The RBI kept the policy repo rate unchanged at 6.50 per cent for the 9th straight consecutive time.The Standing Deposit Facility (SDF) rate remained at 6.25 per cent and the Marginal Standing Facility (MSF) rate and Bank Rate remained at 6.75 per cent.
GDP Growth projection
2. GDP Growth projection: The country’s real GDP growth for the financial year 2024-2025 is projected at 7.2 per cent. As per this, the quarterly estimates are as follows- Q1 (7.1 per cent), Q2 (7.2 per cent), Q3 (7.3 per cent), and Q4 (7.2 per cent).
RBI Governor Shaktikanta Das
3. Focus on Inflation: The MPC continues to focus on controlling inflation and aims to bring it closer to the 4 per cent target.
4. Inflation trends: The headline inflation in the June 2024 surged to 5.1 per cent due to rising food prices such as pulses, vegetables, and edible oils. Firthermore, the CPI inflation is projected at 4.5 per cent for 2024-25, with the highest inflation expected in the third quarter (Q3) at 4.3 per cent.
— ReserveBankOfIndia (@RBI) August 8, 2024
5. Challenges ahead: Some of the challenges or risk ahead include volatile food prices, potential adverse climate events and geopolitical tensions affecting global commodity prices.
In addition to this, the other challenge may incude that the core inflation (excluding food and fuel) is expected to increase slightly due to factors like increased mobile tariff rates.
Sensex & Nifty React As RBI Governor Keeps Repo Rate At 6.5%: Unchanged For 9th Consecutive Time
MPC Voting
Most members voted to keep the policy repo rate unchanged at 6.25 per cent and continue focusing on controlling inflation. Two members suggested reducing the repo rate by 25 basis points and shifting to a neutral stance.
मौद्रिक नीति वक्तव्य, 2024-25 मौद्रिक नीति समिति (एमपीसी) का संकल्प 6 से 8 अगस्त 2024
Monetary Policy Statement, 2024-25 Resolution of the Monetary Policy Committee (MPC) August 6 to 8, 2024 @DasShaktikanta #RBItoday #RBIgovernor #monetarypolicyhttps://t.co/dsO9C3uYMJ
— ReserveBankOfIndia (@RBI) August 8, 2024
Next MPC Meeting
The next MPC meeting is scheduled for October 7 to October 9, 2024.
