Reserve Bank of India Maintains Repo Rate, Eyes 7.2% Growth for FY25

The Reserve Bank of India (RBI) announced in its bi-monthly monetary policy that the repo rate remains unchanged at 6.5%. The growth projection for FY25 has been raised to 7.2%, while inflation is retained at 4.5%. Additionally, new measures to manage food inflation, current account deficit, and digital payments were introduced.

In its bi-monthly monetary policy announcement, the Reserve Bank of India (RBI) declared that the key interest rate (repo) remains unchanged at 6.5%. This follows the last interest rate hike in February 2023.

The RBI has shifted focus towards the withdrawal of its accommodative monetary policy stance to control inflation, while simultaneously raising the growth projection for FY25 from 7% to 7.2%. Despite this, inflation for FY25 is retained at 4.5%, with food inflation still a significant concern.

The current account deficit for FY25 is anticipated to remain within sustainable levels. Meanwhile, foreign exchange reserves hit a record high of USD 651.5 billion as of May 31, 2024. Among other measures, the bulk deposit threshold has been increased to Rs 3 crore from Rs 2 crore, and the RBI plans to rationalize export and import regulations under FEMA.

To combat payment fraud, the RBI will set up a Digital Payments Intelligence Platform. Additionally, auto-replenishment of balance for Fastag, NCMC, and UPI-Lite wallets will now fall under the e-mandate framework. The next monetary policy announcement is scheduled for August 8.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)