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The decision to keep repo-rate unchanged was taken during the Monetary Policy Committee (MPC) meeting that was held from June 5 to 7 read more
 "Repo rate unchanged at 6.5%, announces Governor Shaktikanta Das")
RBI Governor Shaktikanta Das. Source: PTI
The Reserve Bank of India, or RBI, has kept the repo rate unchanged at 6.5 per cent. The decision was announced by RBI Governor Shaktikanta Das after the Monetary Policy Committee (MPC) meeting held from June 5 to 7.
RBI MPC decided to keep the repo rate unchanged at 6.5 per cent with a 4:2 majority, Das said.
“The Monetary Policy Committee decided by a 4:2 majority to keep the policy repo rate unchanged at 6.5 per cent. Consequently, the standing deposit facility (SDF) rate remains at 6.25 per cent, and the marginal standing facility (MSF) rate and the bank rate at 6.75 per cent,” Das said.
Repo rate is the rate at which the RBI lends to commercial banks in the event of any shortfall of funds. The central bank uses repo rate to regulate liquidity in the economy.
The repo-rate has been kept unchanged at 6.5 per cent for the eighth consecutive policy meeting.
“The RBI will continue to be nimble in liquidity management both on the repo and reverse repo front,” the central bank governor further said.
Today’s RBI policy was the first after the 2024 Lok Sabha election results were announced on June 4. It was also the second bi-monthly monetary policy of the financial year 2024-25.
FY25 GDP growth forecast
The RBI Governor said the Indian economy is expected to grow at 7.2 per cent for the financial year 2024-25. It is higher from earlier projection of 7 per cent.
In Q1 it is expected to grow at 7.3 per cent, in Q2 at 7.2 per cent, in Q3 at 7.3 per cent, and in Q4 at 7.2 per cent. “The risks are evenly balanced,” he said.
Q1FY25 GDP growth forecast increased to 7.3 per cent from 7.1 per cent
Q2FY25 GDP growth forecast increased to 7.2 per cent from 6.9 per cent
Q3FY25 GDP growth forecast increased to 7.3 per cent from 7 per cent
Q4FY25 GDP growth forecast increased to 7.2 per cent from 7 per cent
CPI inflation projection
In the RBI MPC announcement, Das also said that the Consumer Price Index (CPI) inflation for the current financial year 2024-25 is expected to be 4.5 per cent.
For Q1 the CPI inflation is likely to be 4.9 per cent, for Q2 it is seen at 3.8 per cent, in Q3 at 4.6 per cent and and Q4 at 4.5 per cent.
RBI on food inflation
Das said the “uncertainties related to food price inflation need to be watched closely. We need a descent of inflation to 4 per cent target on a sustainable basis.”
The RBI governor also said that vegetable prices are currently increasing due to the summer season.
He attributed the deflationary trend in fuel prices primarily to reductions in LPG prices.
Das also pointed out the global trend of rising food prices, indicating a shift in broader market dynamics.
How Indian stock market has reacted to RBI Monetary Policy decision?
Benchmark India equity indices were trading in the green. After the RBI Monetary Policy announcement, BSE Sensex rallied 700 points as the central bank raised FY25 GDP growth forecast. Nifty50 also topped 23,000 points.
At 10:40 am, BSE Sensex was trading 1.04 per cent or 777.61 points higher at 75,852.12, while Nifty was up 230.10 points or 1.01 per cent and was trading at 23,051.50.
Umang Sharma is a media professional with over 12 years of experience. Crafting compelling content and using storytelling techniques are his strengths. His interest lies in national, global, political news and events. see more
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