The Reserve Bank of India has maintained the repo rate at 6.5 percent for the tenth consecutive time, however, the RBI has changed its stance to ‘neutral’. The three-day meeting of the Monetary Policy Committee (MPC) began on Monday (October 7).
Today Reserve Bank Governor Shaktikanta Das informed about the decisions taken in the meeting. Repo rate is the rate at which the Reserve Bank lends to other banks. When the repo rate rises, banks get loans from the Reserve Bank at costlier rates, the first policy announcement by the Reserve Bank of India since the US Federal Reserve cut its benchmark rate by 50 basis points.
Let us tell you that the repo rate has been maintained at 6.5 percent from February 2023. The government has tasked the Reserve Bank with ensuring that retail inflation remains at 4 per cent (up or down 2 per cent) based on the Consumer Price Index (CPI). The policy rate has remained unchanged with the aim of keeping inflation within the limits set by the central bank and accelerating economic growth.
Retail Inflation Rate Expected to be 4.5 Percent
In the current financial year, the estimate of retail inflation rate to be 4.5 percent has also been maintained. Output of 8 major industries fell by 1.8% in the first quarter. At the same time, government consumption is improving. Heavy rains have affected some industries like power, coal and cement.
GDP growth could be 7.2% in this financial year
Shaktikanta Das shared data related to GDP growth estimates. India’s GDP is expected to grow at a rate of 7.2 percent in FY 2025. He said, “Despite the challenges at the global level, the economic foundation of the country remains strong. After considering the current situation, the GDP (Gross Domestic Product) growth estimate for the current financial year has been maintained at 7.0% in the second quarter, 7.4% in the third quarter, 7.4%.
