The Governor of the Reserve Bank of India (RBI), Mr. Shaktikanta Das, outlined the details of the first monetary policy statement (MPS) of the Financial Year 2024-25 (FY25) today which is pivotal in guiding major interest rate decisions. The Reserve Bank of India keeps the repo rate at 6.5% for the seventh time on the run, the same as portrayed in the last 6 MPC meetings. RBI MPC started its three-day session at this year on April 3, the same as it does at the end of every year.

When it comes to monetary transmission, the governor talked about its intentional goal and the progress that has been made. He pointed out he thought that the alignment of CPI inflation with the planned levels requires sufficient measures to be taken. On this particular point, he stressed the significance of the macroeconomy folding in the microeconomy for overall economic progress. According to Governor Das, in the context of the important progress in decreasing inflation‚ we must not forget the fragility of the inflation trend to the frequently disruptive supply side shocks.

Governor Das also mentioned the retention of the directive scheme initiated in November 2021 by the central bank. Furthermore, he announced the proposal for the launch of a mobile application to streamline the implementation process.

The decision to maintain the repo rate at 6.5% reflects the RBI’s approach amidst evolving economic dynamics. The central bank’s commitment to fostering monetary stability and supporting economic growth remains evident through its stance on key interest rates.

The directive scheme established by the RBI continues to be emphasized as a sign of the RBI’s commitment to ensure better transparency and efficiency through continuity. The mobile app in the proposal corresponds with the central bank’s project for improvement of the technology for delivery of services and connection.

Generally, the MPC’s decision and the words of the governor reiterate the need for stressing a balanced approach towards monetary policy which, on the one hand, will allow for inflation under control, but, on the other hand, will not negatively influence recovery of the economy. The main task is keeping steady moderate inflation manageable under often turbulent external factors and domestic problems. Failure to do so could hinder the government’s efforts to develop a sustainable economic system.

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