FOCUS_KEYWORD: RBI Policy Rate
SEO_TITLE: RBI Holds Policy Rate Steady, Prioritizes Inflation
SEO_DESCRIPTION: The Reserve Bank of India maintained its key policy rate, signaling a continued focus on curbing inflation amidst global uncertainties. Experts eye future RBI Policy Rate decisions.
TAGS: business, economy, finance, markets, banking, RBI, monetary policy, repo rate, inflation, interest rates, central bank, economic growth, GDP, India economy, financial stability, liquidity, financial markets
CONTENT:
MUMBAI – The Reserve Bank of India (RBI) on Friday opted to keep its key policy rate unchanged for the sixth consecutive meeting, reiterating its commitment to bring inflation within its target band. The Monetary Policy Committee (MPC) unanimously decided to maintain the repo rate at 6.50%.
The decision aligns with market expectations, as the central bank aims to navigate persistent inflationary pressures while supporting nascent economic growth. Governor Shaktikanta Das highlighted sticky food inflation as a major concern requiring vigilant policy action.
Retail inflation, measured by the Consumer Price Index (CPI), registered 5.10% in January, remaining above the RBI’s comfort zone of 4%. The central bank projects average CPI inflation at 4.5% for the fiscal year 2024-25.
The RBI is maintaining its ‘withdrawal of accommodation’ stance to ensure inflation progressively aligns with the target. This approach allows the central bank flexibility to respond to evolving economic dynamics.
Amidst global economic slowdowns, India’s GDP growth remains robust, projected at 7.0% for FY25. This strong performance provides the RBI with room to prioritize price stability.
“The central bank’s cautious stance indicates that rate cuts are not on the immediate horizon, with data dependency dictating future shifts,” said Madhavi Arora, lead economist at Emkay Global Financial Services.
