Mumbai: Reserve Bank of India (RBI) Governor Shaktikanta Das announced today that the monetary policy committee (MPC) has decided to keep interest rates unchanged for the ninth straight meeting. This decision reflects strong economic demand and the ongoing effort to ensure inflation continues its downward trend.
The MPC, voting 4-2, chose to keep the policy repo rate at 6.5%. Consequently, the standing deposit facility rate remains at 6.25%, while both the marginal standing facility rate and the bank rate are maintained at 6.75%.
The committee's decision emphasizes a continued focus on withdrawing accommodation to align inflation with the target while supporting economic growth. Governor Das noted that market expectations are closely aligned with the RBI’s policy stance.
The growth forecast for the fiscal year 2025 remains at 7.2%, but the outlook for the first quarter has been revised down from 7.3% to 7.1%. This adjustment is based on updated high-frequency indicators and anticipated changes in central expenditure and core industries. The inflation forecast for FY25 stays at 4.5%, despite minor revisions in quarterly predictions.
Governor Das highlighted a notable difference between headline inflation and food inflation, stressing the importance of monitoring food prices due to their potential impact on overall inflation.
In his statement, Das urged banks to focus on increasing household deposits rather than relying on wholesale funding for lending. He pointed out that banks are currently using short-term non-retail deposits to meet loan demands, which could pose structural risks. He recommended that banks enhance their efforts to attract household savings through innovative products and services.
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