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Reserve Bank of India Governor Shaktikanta Das-headed rate-setting panel on Thursday concluded its three-day Monetary Policy Committee (MPC) review meeting. RBI left the repo rate unchanged at 6.5 per cent while retail inflation remains near the higher end of the central bank’s comfort zone.

For almost a year, the Reserve Bank has kept the short-term lending rate or repo rate stable at 6.5 per cent. The benchmark interest rate was last raised in February 2023 to 6.5 per cent from 6.25 per cent to contain inflation driven mainly by global developments.

RBI Governor Das delivered the policy speech at 10:00 a.m. today.

Key numbers:

  • Decided to keep the repo rate unchanged at 6.5%
  • RBI has forecast Indian economy to grow at 7 per cent in FY25.
  • Forecast each of the quarters in FY25 to grow at 7.2%, 6.8%, 7% and 6.9% respectively.
  • CPI Inflation projection for FY25 at 4.5%.
  • RBI left its inflation forecast for this fiscal year unchanged at 5.4%.
  • Forex reserves as of Feb 2, 2024 – $622.5 billion.
  • Q3FY24 and Q4FY24 GDP growth rates pegged at 6.5% and 6.0% respectively.
  • Real GDP growth rate for Q1FY25, Q2FY25 and Q3FY25 pegged at 6.7%t, 6.5% and 6.4% respectively.

Key statements by Governor Das:

  • Elevated debt is raising serious concern in many countries, it will impact future global financial system.
  • Global public debt to GDP ratio is expected to reach 100% by end of this decade.
  • RBI to issue revised regulatory framework for electronics trading platform.
  • The challenges of debt sustainability at global level can become new sources of stress.
  • Debt of central & state govt are expect to moderate in years to come.
  • Industrial activity is gaining stream on improving performance of manufacturing.
  • PMI services increased significantly in January suggesting continuing strong expansion.
  • Das quoted Mahatma Gandhi and said, “I am moving cautiously, watching myself at every step. But there is a fixed determination behind every act of mine.”
  • Investment cycle is gaining momentum and steam aided by sustained thrust on govt capex.
  • Resident entities can hedge the price of gold in the OTC segment in IFSC.
  • Reaffirm commitment to bring down inflation to 4% in timely and sustainable manner

Key decisions & comments from December MPC:

  • RBI kept benchmark rate unchanged at 6.5%
  • GDP growth projection for current fiscal was raised to 7% from 6.5% earlier
  • The GDP growth rate in the first three quarters of FY25 pegged at 6.7 per cent, 6.5 per cent and 6.4 per cent respectively.
  • Retained average retail inflation projection at 5.4% for FY24
  • RBI left inflation projection for FY24 unchanged at 5.4%
  • Enhanced UPI transaction limit to Rs 5 lakh from Rs 1 lakh for payment to hospitals and educational institutions.
  • RBI said Inflation outlook to be considerably influenced by uncertain food prices
  • RBI said intermittent vegetable price shocks could once again push up headline inflation in November and December
  • Relative stability of the rupee reflects the improving macroeconomic fundamentals and its resilience in the face of formidable global tsunamis


  1. Why is there an expectation for the RBI to maintain a pause on the key interest rate in the upcoming MPC meet?The expectation for the Reserve Bank to maintain a pause on the key interest rate in the upcoming bi-monthly policy announcement primarily stems from concerns over inflation.
  2. How has retail inflation trended in the current financial year?In the current financial year, retail inflation has exhibited a declining trend after reaching a peak of 7.44 percent in July 2023. Although it has moderated since then, retail inflation was recorded at 5.69 percent in December 2023.
  3. What is the role of the Monetary Policy Committee (MPC) in deciding the policy repo rate?

    The role of the Monetary Policy Committee (MPC) in deciding the policy repo rate is to ensure that the inflation target set by the government is achieved.

  • Published On Feb 8, 2024 at 10:56 AM IST

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