The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) has kept the repo rate unchanged at 6.5% in its 51st meeting. This decision was taken by RBI Governor Shaktikanta Das on Thursday after a three-day meeting. All the members of the committee agreed to keep the interest rate unchanged and kept the monetary policy stance 'neutral'.
The RBI Governor said that the growth rate forecast for the current financial year will remain stable at 7.2%. He praised the flexible monetary policy framework and called it a major structural reform in 8 years. This is the 10th consecutive time that the repo rate has been kept at 6.5%.
Regarding inflation, Shaktikanta Das said that retail inflation is expected to be 4.5% in FY25 based on a normal monsoon. He also pointed out that inflation is expected to rise due to food prices in September, but inflation will come down by the end of the year. The MPC decision was supported by 5:1 in favor of maintaining the status quo on interest rates. At the conclusion of the meeting, the RBI Governor referred to Mahatma Gandhi's quote "If your way of working is right, success is bound to come", indicating that this decision of the RBI is in the right direction for the country's economic development.
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