RBI Monetary Policy 2024 Live Updates: GDP growth for FY25 pegged at 7%; repo rates unchanged at 6.50%

8 Feb 2024 , 11:51 AM

Following the three-day meeting of the Reserve Bank of India’s Monetary Policy Committee (MPC), the central bank has announced the repo rate, policy outlook, inflation, and growth predictions, among other topics.

In its monetary policy announcement, the RBI has kept the repo rate unchanged at 6.50%, MSF and SDF Rates also remain unchanged.

The RBI Governor forecasts a 7% GDP growth rate in FY25. He provided the following quarterly breakdown:

-The GDP growth prediction for April-June 2024 has been boosted to 7.20% from 6.70%.

-The GDP growth prediction for July-September 2024 has been boosted to 6.80% from 6.50%.

-The GDP growth prediction for October to December 2024 has been boosted to 7% from 6.40%.

-The January-March 2025 GDP growth prediction is 6.90%.

RBI Governor Shaktikanta Das reiterated the FY25 CPI inflation projection of 4.50%. The quarterly breakdown of the same is as under:

-CPI inflation in January-March 2024 is expected to fall to 5.0% from 5.2% before.

-The projection for CPI inflation in April-June 2024 has been reduced from 5.2% to 5.0%.

-The July-September 2024 CPI inflation prediction remains at 4.0%.

-The CPI inflation prediction for October-December 2024 has been reduced to 4.6% from 4.7% before.

-The CPI inflation projection for January to March 2025 is 4.7%.

According to the RBI Governor, the Indian government is on track for budgetary reduction. His comments come only days after the finance minister established a fiscal deficit target of 5.10% for fiscal year 2024-25.

After four and a half years, systemic liquidity fell into a deficit in September 2023. However, after correcting for government cash holdings, the RBI Governor stated that potential liquidity in the banking sector remains in surplus.

During monetary policy announcements, the 10-year benchmark bond yield rose by more than 1 basis point to 7.0738%.

India’s foreign exchange reserves remained at $622.5 Billion as of February 2, 2024, according to Reserve Bank of India Governor Shaktikanta Das, who announced the conclusion of the monetary policy panel meeting.

Other Key highlights of Shaktikanta Das’ monetary policy announcements are:

– RBI to use appropriate tools to regulate liquidity. 

– Central banks to avoid premature easing. 

– Financial parameters of NBFCs improving alongside banks. 

– Other fees for customer loans must be included in interest rates. 

– All retail and MSME loans now require a key fact statement. 

– Resident entities can now hedge gold in the IFSC OTC market.

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