The RBI governor said the MPC also decided by a majority of 5 out of 6 members to remain focused on the withdrawal of accommodation to ensure that inflation progressively aligns with the target, while supporting growth.
RBI Monetary Policy Latest Update: In a significant development, the RBI during its Monetary Policy meeting kept the repo rate unchanged at 6.5%. The Central Bank also projected a 7% growth for the next financial year. The RBI maintained the status quo for the sixth straight time. Notably, the repo rate is the rate of interest at which RBI lends to other banks. Check the highlights of the announcements in 10 points.
- After deliberating the policy statement after a three-day review meeting, RBI Governor Shaktikanta Das attributed comfortable inflation and firm growth dynamics as the reasons behind maintaining the status quo the policy stance.
- Das said inflation is moving closer to the target and growth is holding better than expected. Retail inflation in India though, is in RBI’s 2-6 per cent comfort level but is above the ideal 4 per cent scenario. In December, it was 5.69 per cent.
- The RBI governor said the MPC also decided by a majority of 5 out of 6 members to remain focused on the withdrawal of accommodation to ensure that inflation progressively aligns with the target, while supporting growth.
- The Indian economy grew 7.6 per cent during the July-September quarter of the current financial year 2023-24, remaining the fastest-growing major economy. India’s GDP growth for the April-June quarter grew 7.8 per cent.
- The three-day bi-monthly monetary policy committee (MPC) meeting of the RBI began on Tuesday. The RBI typically conducts six bimonthly meetings in a financial year, where it deliberates interest rates, money supply, inflation outlook, and various macroeconomic indicators.
- Barring the latest pauses, the RBI raised the repo rate by 250 basis points cumulatively to 6.5 per cent since May 2022 in the fight against inflation.
- Raising interest rates is a monetary policy instrument that typically helps suppress demand in the economy, thereby helping the inflation rate decline.
- The Reserve Bank of India on Thursday projected a GDP growth of 7 per cent for 2024-25 financial year, which is lower than the 7.3 per cent expansion estimated for the current fiscal.
- RBI Governor Shaktikanta Das said rural demand continues to gather pace, urban consumption remains strong and investment cycle is gaining steam on the back of increased capex.
- The RBI chief said the domestic economic activity remains strong and growth in the current fiscal as per estimates by the NSO is 7.3 per cent. “The momentum of 2023-24 is expected to continue in 2024-25 fiscal,” Das said.
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