RBI Maintains Repo Rate

• 06 Apr 2024

On 5th April, 2024, RBI’s Monetary Policy Committee announced to keep repo rate at 6.5% for seventh consecutive time.

Key Points:

• Inflation Expectations: Possibility of retail inflation falling below 4% in FY 2025 raises hopes for rate cut.
• Historical Context: Repo rate last cut by 40 basis points to 4% in May 2020 due to COVID-19 impact.
• Economic Projections: RBI retains FY25 GDP growth at 7%, CPI inflation at 4.5%.
• Inflation Forecast: RBI projects inflation at 4.9% in Q1, 3.8% in Q2, 4.6% in Q3, and 4.5% in Q4 of FY25.
• Policy Outlook: Analysts expect rate cut when inflation aligns with RBI's 4% target consistently.
• Monetary Policy Strategy: RBI maintains active disinflationary policy to anchor inflation expectations and support growth.