The Reserve Bank of India (RBI) monetary policy committee (MPC) has voted to keep the repo rate unchanged at 6.5%.
On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) at its meeting today (August 8, 2024) decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50%.Consequently, the standing deposit facility (SDF) rate remains unchanged at 6.25% and the marginal standing facility (MSF) rate and the Bank Rate at 6.75%.
The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth.
These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%, while supporting growth.
The projected real GDP growth for 2024-25 is maintained at 7.2%. The quarterly breakdown is as follows: Q1 at 7.1%; Q2 at 7.2%; Q3 at 7.3%; and Q4 at 7.2%. Real GDP growth for Q1:2025-26 is projected at 7.2%.
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The projected CPI inflation for 2024-25 remains unchanged at 4.5%. The quarterly breakdown is as follows: Q2 at 4.4%; Q3 at 4.7%; and Q4 at 4.3%. CPI inflation for Q1:2025-26 is projected at 4.4%.
During the recent policy meeting, Dr. Shashanka Bhide, Dr. Rajiv Ranjan, Dr. Michael Debabrata Patra and Shaktikanta Das voted to keep the policy repo rate unchanged at 6.50%. Dr. Ashima Goyal and Prof. Jayanth R. Varma voted to reduce the policy repo rate by 25 basis points.
The minutes of the MPCs meeting will be published on August 22, 2024. The next meeting of the MPC is scheduled during October 7 to 9, 2024.
Following the RBI announcement, the Nifty Bank index was up 0.12% to 50,178.25 while the benchmark Nifty 50 index was down 0.41% to 24,197.05.
HDFC Bank (up 1.05%), Federal Bank (up 1.04%), SBI (up 0.56%) and AU Small Finance Bank (up 0.18%) advanced.
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