New Delhi: The Governor of the Reserve Bank of India (RBI), Shaktikanta Das, stated that the retail inflation rate is still higher than the MPC’s target of 4%, which is why the MPC chose to maintain the policy repo rate at 6.5%. The choice was made in the midst of worldwide and domestic economic uncertainty. According to the RBI Governor, the MPC made the majority decision to maintain the current repo rate.
Shaktikanta Das stated, “When the projected GDP growth of 7.2% for 2024–25 materialises, it will be the fourth consecutive year of growth at or above 7%. Headline CPI continues to be on a disinflationary trajectory. Monetary policy has played an important role in this process. This is evident from the decline in headline inflation by 2.3 percentage points between the first quarter of 2022–23 and the fourth quarter of 2023–24. Supply-side developments and government measures have also contributed to this moderation of headline inflation. However, the process of disinflation was held down overall by repeated shocks to food prices.”
RBI Governor Shaktikanta Das made the following important announcements:
. The standing deposit facility (SDF) rate remains at 6.25 percent, while the bank rate and the marginal standing facility (MSF) rates remain at 6.75 percent.
. Governor Shaktikanta Das stressed the significance of approaching monetary policy with balance.
. Shaktikanta Das restated the commitment made by MPC to gradually cut accommodation in order to ensure that inflation stays within the targeted range. In order to maintain price stability from a strong base, he stated that “monetary policy must be disinflationary and unwavering in its resolve to align inflation to the objective of 4% on a sustained basis.”
. The RBI revised its growth estimates for the current fiscal year 2024–2025 and predicted a 7.2% GDP growth rate.
The estimated growth rates for each quarter are 7.3% for Q1, 7.2% for Q2, 7.3% for Q3, and 7.2% for Q4.
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