Mumbai: The Reserve Bank of India on Friday decided to keep the policy rate unchanged for the eighth time in a row, saying it will maintain a tight vigil on inflation.
The rate increase cycle was paused in April last year after six consecutive rate hikes, aggregating to 250 basis points since May 2022.
Announcing the second bi-monthly monetary policy for the current financial year, RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) has decided to keep the repo rate unchanged at 6.5 per cent.
This policy announcement is significant as it is the first one following the 2024 Lok Sabha election results, which were declared on June 4. It is also the second bi-monthly monetary policy of the financial year 2024-25.
Governor Das projected that the Indian economy would grow at 7.2 per cent for the financial year 2024-25, an increase from the earlier projection of 7 per cent.
He elaborated on the quarterly growth expectations, stating, “In Q1 it is expected to grow at 7.3 per cent, in Q2 at 7.2 per cent, in Q3 at 7.3 per cent, and in Q4 at 7.2 per cent. The risks are evenly balanced.”
Specifically, the GDP growth forecasts for FY25 are as follows:
Q1FY25: Increased to 7.3 per cent from 7.1 per cent
Q2FY25: Increased to 7.2 per cent from 6.9 per cent
Q3FY25: Increased to 7.3 per cent from 7 per cent
Q4FY25: Increased to 7.2 per cent from 7 per cent
CPI inflation projection
Das also addressed the Consumer Price Index (CPI) inflation projections for FY25. He stated that CPI inflation for the financial year 2024-25 is expected to be 4.5 per cent. The quarterly projections are as follows:
Q1: 4.9 per cent
Q2: 3.8 per cent
Q3: 4.6 per cent
