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Published: August 8, 2024
Updated: August 8, 2024

RBI Keeps Repo Rate Unchanged at 6.5%: A Boost to Economic Growth

Monetary Policy Update

The Reserve Bank of India (RBI) has kept the benchmark repo rate unchanged at 6.5% for the ninth consecutive meeting, maintaining its accommodative stance to support economic growth. The decision was made by the six-member Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das.

Economic Growth Projections

The RBI has retained its real GDP growth projection for FY25 at 7.2%, with risks evenly balanced. The quarterly projections are:

- Q1FY25: 7.1%
- Q2FY25: 7.2%
- Q3FY25: 7.3%
- Q4FY25: 7.2%
- FY2026: 7.2%

Inflation Forecast

The RBI has maintained its CPI inflation forecast for FY25 at 4.5% and projected Q1FY26 inflation at 4.4%.

Policy Rates Unchanged

The MPC has decided to keep the policy repo rate unchanged at 6.5%, with the standing deposit facility (SDF) rate remaining at 6.25%. The marginal standing facility (MSF) rate and the bank rate remain at 6.75%.

MPC Voting

The MPC voted by a 4-2 majority to keep policy rates unchanged and maintain its "Withdrawal of Accommodation" stance.

The RBI's decision to keep the repo rate unchanged at 6.5% is a positive move to support economic growth. With the inflation forecast maintained at 4.5% and GDP growth projections retained at 7.2%, the Indian economy is expected to continue its growth trajectory. This decision will also help maintain stability in the financial markets and support the government's efforts to boost economic growth.