RBI Monetary Policy Update: Repo Rate Stays Steady at 6.5%
The key policy repo rate has remained at 6.5% by the RBI Monetary Policy Committee. The MPC has opted to keep the repo rate unchanged for a fourth consecutive meeting. At its meeting in February 2023, the MPC last increased this rate by 25 bps, bringing it to 6.50%. RBI Governor Shaktikanta Das stated that the transmission of the 250 bps repo rate drop still needs to be completed when announcing the bimonthly monetary policy.
The 6.5% actual GDP growth prediction for FY24 has stayed the same. The forecast for inflation for FY24 is also unchanged at 5.4%. According to the governor, preventing spikes in the price of food and fuel is a necessity that cannot be compromised. Das stated that to control liquidity, RBI may need to take open market operations (OMOs) into account about G-secs. Das noted that OMO will be auctioned during the post-Monetary Policy press conference.