Business

RBI Maintains Repo Rate at 6.5%; Projects Economic Growth For FY25

The Reserve Bank of India (RBI) has opted to keep the repo rate steady at 6.5% for the 11th straight time, reinforcing its neutral monetary policy stance.

RBI Governor Shaktikanta Das revealed on Friday that the Monetary Policy Committee (MPC) decided on this with a 4:2 majority during its meeting.

Das stated, “As a result, the Standing Deposit Facility (SDF) rate remains at 6.25 percent, and the Marginal Standing Facility (MSF) rate, along with the Bank Rate, stays at 6.75 percent.”

The Governor announced an updated GDP growth forecast for India for FY25, highlighting the nation’s evolving economic path.

“Real GDP growth for 2024-25, that is the current year, is now projected at 6.6 percent, with Q3 at 6.8 percent and Q4 at 7.2 percent. Real GDP growth for the first quarter of 2025-26 is likely at 6.9 percent, and the second quarter of 2025-26 at 7.3 percent,” Das added.

50 basis points have reduced the cash reserve ratio (CRR) to 4%. “This reduction will release Rs 1.15 lakh crore of liquidity into the banking system,” Das stated.

RBI Hikes Inflation Forecast; Stays Neutral

The RBI has raised the FY25 inflation forecast from 4.5% to 4.8%. Additionally, the MPC unanimously decided to maintain a neutral stance, focusing firmly on achieving the inflation target sustainably.

Das further remarked, “The mandate of the Reserve Bank of India is to maintain price stability while supporting the objective of growth.”

Highlighting India’s robust economic standing, Das noted, “As an economy, India has been growing at over 8 percent GDP growth in the last three years. Despite recent aberrations in growth and inflation trajectories, the economy continues its journey on a sustained and balanced path towards progress.”

He also underscored India’s potential in a changing global economic environment.

“As an economy, India has been growing at over 8 percent GDP growth in the last three years. Despite recent aberrations in growth and inflation trajectories, the economy continues its journey on a sustained and balanced path towards progress,” Das added.

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Mankrit Kaur

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