RBI Monetary Policy Meeting 2024: Reserve Bank of India Retains Repo Rate at 6.5%, Forecasts 7.2% GDP Growth for FY25

New Delhi, October 9: The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) on Wednesday decided to maintain the status quo on the repo rate at the current 6.5 per cent, while retaining India’s real GDP growth forecast at 7.2 per cent for FY25. RBI Governor Shaktikanta Das said that inflation for the third quarter (Q3) this fiscal is set to moderately increase to 4.8 per cent, saying that moderation in inflation is likely to remain slow and uneven.

“The inflation horse has been brought to the stable within the tolerance band. We have to be careful about opening the gate,” he said during the MPC briefing. The central bank decided to hold rates steady despite the US Federal Reserve’s recent rate cut of 50 basis points. The RBI has changed the stance to ‘neutral’ from “withdrawal of accommodation”. “The Indian rupee continues to be among the least volatile currencies,” said the RBI Governor. RBI Monetary Policy Meeting 2024: Reserve Bank of India Keeps Repo Rate Unchanged for 10th Time in a Row (Watch Video).

He further stated that banks and NBFCs need to give continued attention to inoperative accounts, mule accounts, the cybersecurity landscape and other factors. Experts welcomed the decision on steady repo rate, saying while there were hopes for a rate cut in line with the US Fed, the RBI has taken a prudent approach by focusing on key indicators like domestic inflation and financial stability, particularly in light of the declining individual savings as a percentage of GDP, which poses a financial stability risk. RBI Monetary Policy Meeting 2024: Repo Rate Likely To Remain Unchanged, Governor Shaktikanta Das To Announce Decision Today.

“Recent global geopolitical developments have led to a surge in oil prices, which could drive inflation further. This likely influenced the MPC’s decision to hold rates steady,” said Suresh Darak, Founder of Bondbazaar. Over the last couple of weeks, the 10-year benchmark G-sec yields have risen by around 10 basis points due to these factors. However, if these global challenges prove temporary, we might see a rate cut in the next policy cycle, said experts.

(The above story first appeared on Pune Media on Oct 09, 2024 10:50 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website Pune Media.com).

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