RBI Keeps Repo Rate Unchanged at 6.5% for 8th Consecutive Time

Ira Singh
Khabar Khabaron Ki,07 June’24

The Reserve Bank of India (RBI) has decided to maintain the repo rate at 6.5% for the eighth consecutive time, as announced during the bi- monthly Monetary Policy Committee (MPC) meeting today, June 7. The announcement was made by RBI governor Shaktikanta Das following the conclusion of three-day meeting that began on June 5.

The repo rate, the rate at which the RBI lends money to commercial banks, has remained stable since the first quarter of 2023.

The Reserve Bank of India (RBI) has revised its real GDP growth forecast for the fiscal year 2024-2025 upwards to 7.2% from the previous estimate of 7.0%. This adjustment reflects the central bank’s confidence in improved rural and urban demand, bolstered by favorable monsoon predictions. The MPC at its April meeting, while warning of geopolitical headwinds, projected India’s GDP to grow at 7 per cent in the ongoing financial year. India’s economy would grow at 7.1 per cent, 6.9 per cent, 7 per cent and 7 per cent in each quarter of FY25.

The RBI in April retained inflation projection at 4.5% for the current financial year, lower than 5.4% in the last fiscal. Assuming a normal monsoon this year, CPI (consumer price index-based) inflation for the current year is projected at 4.5%, with Q1 at 4.9%, Q2 at 3.8%, Q3 at 4.6%, and Q4 at 4.5%. This decision aligns with market expectations and aims to support sustained economic growth while keeping inflation in check.

The central bank’s stance reflects a cautious approach amid global economic uncertainties and domestic inflationary pressures.