RBI kept the repo rate at 6.5% for the sixth consecutive time. Indian News | india business news
MUMBAI: The RBI on Thursday kept rates unchanged for the sixth consecutive time, in line with expectations, but surprised markets by estimating growth at 7% for 2024-25, up from 6.7% earlier.
RBI Governor Shaktikanta Das said the transmission of a 250 basis point increase in the policy rate between May 2022 and February 2023 was not complete. While half of bank loans, including home loans, are linked to the repo rate, the other half are linked to the cost of deposits or are fixed and yet do not fully reflect market rates.
RBI estimates 4.5% inflation Price forecasts were cut for FY25, and for the first and third quarters of the next financial year.
Das said in his monetary policy statement that the fight against inflation is not over yet. “The last phase of deflation is always the most challenging and this has to be kept in mind,” he said. Das said the RBI will maintain a tight supply of money to control prices.
The Monetary Policy Committee voted by a majority of 5:1 to keep the repo rate (at which the RBI lends to banks) unchanged at 6.5%. The other rates at which the RBI lends to banks – standing deposit facility and marginal standing facility – remain at 6.25% and 6.75% respectively.
The MPC decided by a majority of 5 out of 6 members to maintain the focus on housing recovery to ensure that inflation progressively aligns with the target while supporting growth.
Announcing the MPC’s decision, the RBI Governor said global growth is expected to remain stable and prospects for a soft landing have improved with inflation easing and growth momentum improving. However, the Red Sea crisis has increased uncertainty, he said.
Das said high levels of public debt are raising serious concerns about macroeconomic stability in many countries, including advanced economies. He noted that some advanced economies had higher levels of public debt than emerging economies.
Das said that India is in a relatively better position in this global environment. “Going forward, the momentum of economic activity seen during the current year is expected to continue in the next financial year as well,” Das said.
Das said real GDP growth for FY2015 is estimated at 7%, with Q1 at 7.2% compared to the earlier estimate of 6.7%. The second quarter is projected to grow at 6.8%, up from the previous estimate of 6.5% made in December, while the third quarter is projected to grow at 7%, up from 6.4%. Q4 is expected to reach 6.9%.
He said CPI inflation is estimated at 5.4% for 2023-24, compared to the earlier forecast of 5.2% in the Q4 projection. Assuming normal inflation, the Governor estimated inflation for the next fiscal year to be 4.5%, with Q1 remaining at 5% compared to the previous estimate of 5.2%, Q2 remaining at 4%, Q3 at 4.6% compared to the previous estimate of 4.7%. Will remain. , and Q4 at 4.7%.
RBI Governor Shaktikanta Das said the transmission of a 250 basis point increase in the policy rate between May 2022 and February 2023 was not complete. While half of bank loans, including home loans, are linked to the repo rate, the other half are linked to the cost of deposits or are fixed and yet do not fully reflect market rates.
RBI estimates 4.5% inflation Price forecasts were cut for FY25, and for the first and third quarters of the next financial year.
Das said in his monetary policy statement that the fight against inflation is not over yet. “The last phase of deflation is always the most challenging and this has to be kept in mind,” he said. Das said the RBI will maintain a tight supply of money to control prices.
The Monetary Policy Committee voted by a majority of 5:1 to keep the repo rate (at which the RBI lends to banks) unchanged at 6.5%. The other rates at which the RBI lends to banks – standing deposit facility and marginal standing facility – remain at 6.25% and 6.75% respectively.
The MPC decided by a majority of 5 out of 6 members to maintain the focus on housing recovery to ensure that inflation progressively aligns with the target while supporting growth.
Announcing the MPC’s decision, the RBI Governor said global growth is expected to remain stable and prospects for a soft landing have improved with inflation easing and growth momentum improving. However, the Red Sea crisis has increased uncertainty, he said.
Das said high levels of public debt are raising serious concerns about macroeconomic stability in many countries, including advanced economies. He noted that some advanced economies had higher levels of public debt than emerging economies.
Das said that India is in a relatively better position in this global environment. “Going forward, the momentum of economic activity seen during the current year is expected to continue in the next financial year as well,” Das said.
Das said real GDP growth for FY2015 is estimated at 7%, with Q1 at 7.2% compared to the earlier estimate of 6.7%. The second quarter is projected to grow at 6.8%, up from the previous estimate of 6.5% made in December, while the third quarter is projected to grow at 7%, up from 6.4%. Q4 is expected to reach 6.9%.
He said CPI inflation is estimated at 5.4% for 2023-24, compared to the earlier forecast of 5.2% in the Q4 projection. Assuming normal inflation, the Governor estimated inflation for the next fiscal year to be 4.5%, with Q1 remaining at 5% compared to the previous estimate of 5.2%, Q2 remaining at 4%, Q3 at 4.6% compared to the previous estimate of 4.7%. Will remain. , and Q4 at 4.7%.
