RBI keeps up with repo rate at 6.5 pc, projects 4.5 pc expansion

Governor of the Reserve Bank of India Shaktikanta Das declared on Friday that the bank has opted to keep things as they are and keep the repo rate at 6.5%. The central bank has chosen to maintain the repo rate at 6.5 percent for the seventh time in a row.
Das stated that the Monetary Policy Committee (MPC) has chosen to maintain the repo rate at its current level, announcing the first bi-monthly monetary policy for the current fiscal year. After six rate increases in a row totaling 250 basis points since May 2022, the rate increase cycle was put on hold in April of last year.

By a majority vote of 5 to 1, the six-member rate-setting panel upheld the current interest rate situation while continuing to emphasise the removal of the accommodating posture. The Consumer Price-based Inflation (CPI) was 5.1% in February.

The RBI is required by the government to maintain CPI inflation at 4% with a 2% margin of error. The governor of the RBI stated that they are on the lookout for food inflation.

For the current fiscal year, the central bank has forecast a 7 percent increase. Inflation was also predicted to be 4.5 percent.

According to Das, India’s foreign exchange reserves hit a record high of $645.6 billion on March 29, 2024.

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