New-Delhi: The Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday announced the first monetary policy of the financial year 2024-25 and declared that the policy repo rate to remain steady at 6.5%.
The RBI decided to keep the key policy repo rate unchanged at 6.5% for the seventh consecutive time.
RBI Governor Shaktikanta Das said that the decision was made with five of the six members of the Monetary Policy Committee (MPC) favouring no change in the repo rate.
Das said the MPC decided to continue with the “withdrawal of accommodation” stance to control inflation.
The RBI would continue with its disinflationary policy to ensure a stable growth path for the economy, he added.
Das said that food price inflation continues to weigh on the trajectory going ahead.
The Central bank last changed rates in February 2023, when the repo rate was hiked to 6.5 per cent. The RBI had in fact raised rates by 2.5 per cent between May 2022 and February 2023, after which they have been kept on hold to support economic growth despite inflationary pressures in the past. Repo rate is the interest rate at which the RBI gives short-term loans to banks to enable them to meet their liquidity requirements.
Inflation has now come down to around 5 per cent and is well below the RBI’s upper tolerance limit of 6 per cent, but the Central bank is determined to bring it down to its medium-term target of 4 per cent, which it considers ideal for stable growth in the economy.
RBI Governor Shaktikanta Das has stated several times that although inflation has been moderating, unless it falls to 4 per cent on a durable basis, the Central bank will not think of changing its policy focus.
Monetary Policy Statement by Shri Shaktikanta Das, RBI Governor – April 05, 2024, at 10 am https://t.co/MNxOj5bbVN
— ReserveBankOfIndia (@RBI) April 5, 2024
Also Read: RBI Policy: Governor Shaktikanta Das Retains Repo Rate At 6.5 Percent
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