RBI Holds Steady: Repo Rate Unchanged, Focus on Growth and Stability

The Reserve Bank of India retains its repo rate at 6.5% for the 11th period as Governor Shaktikanta Das announces adjustments in GDP and inflation forecasts. A CRR cut by 50 basis points aims to inject Rs 1.15 lac crore into the banking system, ensuring liquidity and maintaining a neutral stance.

In a decisive move, the Reserve Bank of India (RBI) has elected to maintain the repo rate at 6.5 percent for the 11th successive term, underscoring its commitment to a steady monetary policy. Governor Shaktikanta Das revealed that the Monetary Policy Committee (MPC) reached this decision with a 4:2 majority.

The Standing Deposit Facility (SDF) rate remains constant at 6.25 percent, while the Marginal Standing Facility (MSF) rate and the Bank Rate continue unchanged at 6.75 percent, Das confirmed. Alongside these pronouncements, the Governor unveiled revised projections for India's GDP growth, pegging it at 6.6 percent for FY25 with increments across subsequent quarters.

Importantly, Governor Das announced a 50 basis point reduction in the Cash Reserve Ratio (CRR), decreasing it from 4.5 percent to 4.0 percent. This strategic move is projected to inject Rs 1.15 lakh crore of liquidity into the financial system. Concurrently, the RBI adjusted its inflation forecast for FY25 from 4.5 percent to 4.8 percent, maintaining a neutral policy stance aimed at achieving long-term inflation targets.

Governor Das reiterated the RBI's dual mandate of fostering price stability while bolstering growth, noting India's robust economic performance with an over 8 percent GDP growth in recent years. Despite challenges, Das emphasized the nation's trajectory toward sustained progress and its advantageous position in the evolving global economy.

(With inputs from agencies.)