1. RBI Governor Shaktikanta Das: MPC maintains the repo rate at 6.5% due to high inflation.
2. Decision made amid ongoing economic uncertainties, both domestic and global.
3. Retail inflation persists above target, prompting policy stability to address economic uncertainties.
New Delhi, June 07: Reserve Bank of India (RBI) Governor Shaktikanta Das announced that the Monetary Policy Committee (MPC) has decided to maintain the policy repo rate at 6.5 percent due to persistently high retail inflation, which continues to exceed the target of 4 percent.
This decision is made amidst ongoing economic uncertainties both domestically and globally. Das highlighted that the MPC opted to keep the repo rate unchanged through a majority decision.
He emphasized, “When the projected GDP growth of 7.2% for 2024-25 materializes, it will mark the fourth consecutive year of growth at or above 7%. Headline CPI (Consumer Price Index) continues to follow a disinflationary trajectory. Monetary Policy has played a significant role in this process, as evidenced by 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, repeated food price shocks have slowed down the overall disinflation process.”
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Here are the key announcements made by RBI Governor Shaktikanta Das:
- The standing deposit facility (SDF) rate remains unchanged at 6.25 percent, while the marginal standing facility (MSF) rate and the bank rate remain at 6.75 percent.
- Governor Shaktikanta Das stressed the importance of maintaining a balanced approach towards monetary policy.
- He reiterated the MPC’s commitment to gradually withdrawing accommodation to ensure that inflation aligns with the targeted range. Das stated, “Monetary policy must continue to remain disinflationary and resolute in its commitment to aligning inflation with the target of 4 percent on a durable basis to sustain price stability and establish a strong foundation.”
- The RBI revised its growth projections for the fiscal year 2024-25, forecasting a GDP growth rate of 7.2 percent.
- Quarterly growth projections stand at 7.3 percent for Q1, 7.2 percent for Q2, 7.3 percent for Q3, and 7.2 percent for Q4.
