RBI keeps repo rate unchanged at 6.5%
The Reserve Bank of India's Monetary Policy Committee (MPC) has decided to keep the repo rate steady at 6.5%, marking the seventh consecutive time this rate has been maintained. The decision aligns with market predictions and is part of the central bank's ongoing strategy to manage inflation. Repo rate is the interest rate at which RBI lends funds to commercial banks for short-term requirements.
MPC upholds stance of 'withdrawal from accommodation'
In its first meeting of the fiscal year 2025, the MPC announced its decision to continue with its current policy stance of "withdrawal from accommodation." This stance reflects the committee's commitment to managing inflation, which has shown signs of easing but still exceeds the RBI's target of 4%. As of February, headline inflation was at 5.09%, almost identical to 5.1% in the previous month.
MPC has kept GDP growth forecast at 7% for FY25
India's economy expanded at a rate of 8.4% in the final quarter of 2023, marking its fastest growth in a year and a half, propelled by robust manufacturing and construction sectors. The government has upgraded its growth prediction for 2024 to 7.6% from 7.3%. However, the MPC has kept its GDP growth forecast at 7% for FY25, unchanged from its last policy announcement.
