Wed. May 22nd, 2024

RBI Monetary Policy 2024 Highlights: Repo rate unchanged, FY25 GDP growth projected: 7%, Inflation target: 4.5%

RBI Monetary Policy 2024 Highlights: Repo rate unchanged, FY25RBI Monetary Policy 2024 Highlights: Repo rate unchanged, FY25

RBI Monetary Policy 2024 Highlights: Reserve Bank of India (RBI) Governor Shaktikanta Das unveiled the first monetary policy of the 2024-25 financial year. Following a two-day review by the Monetary Policy Committee (MPC), starting on April 3 and concluding on April 5, the RBI opted to retain the key policy repo rate at 6.5%, marking the seventh consecutive hold. Chaired by Governor Das, the six-member MPC also affirmed the policy stance as ‘withdrawal of accommodation’. Notably, the RBI has forecasted India’s real GDP growth rate for FY25 at 7%, while projecting CPI inflation for the same period to stand at 4.5%.

RBI Governor Shaktikanta Das has unveiled the inaugural monetary policy for FY25, outlining crucial highlights of the April policy.

Policy actions:
  • The repo rate remains steady at 6.5%.
  • The policy stance of ‘withdrawal of accommodation’ has been retained.
  • The GDP growth forecast for FY25 stands at 7%, with quarterly projections as follows: Q1 at 7.1%, Q2 at 6.9%, Q3 at 7%, and Q4 at 7%.
  • CPI inflation forecast for FY25 is set at 4.5%, with detailed quarterly projections: Q1 at 4.9%, Q2 at 3.8%, Q3 at 4.6%, and Q4 at 4.5%
Non- Policy actions
  • An announcement is forthcoming regarding the scheme for trading sovereign green bonds at IFSC.
  • A mobile app will be introduced to facilitate access to RBI’s Retail Direct Scheme for participating in the GSec market.
  • A draft circular for the LCR framework for banks will be issued soon.
  • All small finance banks will be allowed to engage in rupee interest rate derivative products trading.
  • Enabling UPI for Cash Deposit Facility.
  • Third-party applications will have access to UPI for Prepaid Payment Instruments (PPIs).
  • Distribution of Central Bank Digital Currencies (CBDCs) will be conducted through Non-bank Payment System Operators.

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