RBI Monetary Policy

RBI Monetary Policy

  • Context: 

  • The Reserve Bank of India's Monetary Policy Committee (MPC) has decided to keep the policy repo rate unchanged at 6.75%.  

  • The MPC has signalled its continued priority to control inflation and bring it down to the 4% target also while simultaneously supporting economic growth. 

  • Key aspects of Monetary Policy 

  • The MPC has held all key rates steady: 

  • Policy Repo Rate: 6.75% 

  • Standing Deposit Facility (SDF) Rate: 6.50% 

  • Marginal Standing Facility (MSF) Rate: 7.00% 

  • Bank Rate: 7.00% 

  • The committee has forecasted the following for the Indian economy: 

  • Real GDP Growth is projected to be 7.3%. 

  • CPI Inflation is projected to be 4.7%. 

  • MPC's Stance:  

  • With a 5-to-1 majority vote, the committee decided to remain focused on the "withdrawal of accommodation".  

  • This indicates that the RBI's priority is still to manage liquidity in the banking system to ensure that inflation progressively aligns with its target. 

  • The decision was based on the assessment that while the Indian economy remains resilient with strong investment activity, persistent food price volatility and global uncertainties pose risks to the inflation outlook.