The Reserve Bank of India (RBI) has decided to maintain the status quo on the repo rate, holding it steady at 6.5% for the seventh consecutive time. This decision was announced by RBI Governor Shaktikanta Das following the conclusion of the Monetary Policy Committee’s (MPC) two-day review meeting on April 5, 2024.
The MPC, tasked with keeping retail inflation within the target range of 4% ± 2%, voted 5:1 in favor of maintaining the current repo rate. Governor Das emphasized that the committee will remain vigilant regarding food inflation while continuing to focus on the withdrawal of the accommodative stance.
Despite the challenges posed by inflation, the RBI projects India’s GDP to grow at a robust 7% in the financial year 2024-25 (FY25). Additionally, the central bank expects retail inflation to moderate to 4.5% during the same period.
The MPC’s decision to keep the repo rate unchanged is a carefully considered move aimed at striking a balance between sustaining economic growth and managing inflationary pressures. By maintaining the current interest rate environment, the RBI seeks to provide stability and support to various sectors of the economy.
As the nation navigates the post-pandemic landscape, the RBI’s monetary policy stance reflects its commitment to fostering a conducive financial environment that promotes sustainable growth while keeping inflation in check. The central bank’s proactive approach and regular assessment of economic indicators demonstrate its dedication to maintaining the stability and resilience of the Indian economy.
