Repo rate unchanged at 6.50%

RBI Governor Shaktikanta Das. PTI.

The Reserve Bank of India (RBI) Friday kept the repo rate unchanged at 6.50 per cent for the fifth consecutive time.

The Monetary Policy Committee (MPC) last raised this rate by 25 bps to 6.50 per cent at its meeting in February 2023.

The repo rate is the rate through which the RBI lends money to commercial banks.

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The MPC maintained the policy stance of ‘withdrawal of accommodation’ by the majority of 5 out of 6 members, RBI Governor Shaktikanta Das said.

“Monetary policy will remain actively disinflationary,” Das said announcing the monetary policy statement of the central bank.

Real GDP growth projected at 7%

Das said FY24 real GDP growth is projected at 7 per cent. Real GDP growth for the next year is projected at 6.7 per cent in Q1, 6.5 in Q2 and 6.4 in Q3.

RBI GDP growth outlook
Period                        Projection                    Earlier
FY24                             7.00%                         6.50%
Q3FY24                        6.50%                         6.00%
Q4FY24                        6.00%                         5.70%
Q1 FY25                       6.70%                         6.60%
Q2 FY25                       6.50%
Q3 FY25                       6.40%

Inflation forecast unchanged

The RBI has kept the CPI inflation outlook unchanged.

RBI CPI inflation outlook
Period                    Projection                    Earlier
FY24                            5.40%                        5.40%
Q3FY24                       5.6%                          5.60%
Q4FY24                       5.20%                        5.20%
Q1 FY25                      5.20%                          5.20%
Q2FY25                       4.00%
Q3FY25                       4.70%

RBI has successfully reduced its balance sheet well within time – from 28.6 per cent to 23.3 per cent of GDP in FY23 and to 21.6 per cent of GDP in December 2023, Das said.

UPI transaction limit increased

The RBI has decided to increase the UPI transaction limit for hospitals and education related payments to Rs 5 lakh per transaction from Rs 1 lakh per transaction, Das announced.

With inputs from agencies

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