RBI MPC Meeting
Real GDP growth for FY25 is expected to be 7%, according to the RBI MPC meeting. According to Das, Q1 was 7.1%, Q2 was 6.9%, and Q3 and Q4 were each 7%.
By a vote of 5 to 1, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), led by Governor Shaktikanta Das, decided on Friday to maintain the repo rate at 6.5%. The RBI has maintained the repo rate at this level for the past seven consecutive times. According to Das, the bank rate and MSF rate are both still 6.75 percent, while the SDF rate is still 6.25 percent. Additionally, the central bank has stuck to its “withdrawal of accommodation” position.
RBI MPC Meeting: The rate increases, which amounted to 250 basis points and started in May 2022, ended in April of the following year. Six increases in a row preceded this break in the rate increase cycle.
The central bank has chosen to keep the rate at its present level for the seventh time in a row at the RBI MPC’s first meeting of the FY24–25.
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GDP forecast
A 7% real GDP growth rate is anticipated for FY25. Das stated that Q1 stood at 7.1%, Q2 at 6.9%, and Q3 and Q4 at 7% apiece.
Inflation projection
RBI MPC Meeting: According to the MPC announcements, the Consumer Price Index (CPI) showed 5.1% inflation as of February. The governor stated, “Looking ahead, robust growth prospects provide the policy space to remain focused on inflation and ensure its descent to the target of 4%.” He added that the governor “has continued to sustain its momentum, surpassing all projections.” The headline inflation has eased to 5.1% in both January and February, and this has come down to 5.1% in these two months from the earlier peak of 5.7% in the month of December.
Forex reserve
India’s forex reserve at all-time high at $645.6 billion.
Current Account Deficit
The governor emphasized in his address that it is anticipated that India’s Current Account Deficit (CAD) will be at a level that is both feasible and extremely manageable for FY25.
Repo Rate
RBI MPC Meeting: The benchmark interest rate at which the RBI provides banks with liquidity through the liquidity adjustment facility (LAF) is known as the repo rate. This liquidity is given in exchange for government bonds and other securities that the RBI deems suitable.
The RBI is supposed to keep CPI inflation between 2 and 6 percent, with a target of 4 percent, according to a directive from the government.