RBI MPC Highlights: Repo Rate unchanged at 6.5%

by Psu Connect
Date: 05-04-24

Consequently, the standing deposit facility (SDF) rate remains unchanged at 6.25 percent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 percent.

RBI MPC Highlights: Repo Rate unchanged at 6.5%

New Delhi: The Governor of Reserve Bank, Shaktikanta Das on April 5 in the Monetary Policy Committee states that policy repo rates will remain unchanged at 6.5%. Based on an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) at its meeting today (April 5, 2024) decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50 percent.

Consequently, the standing deposit facility (SDF) rate remains unchanged at 6.25 percent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 percent.

The MPC also decided to remain focused on the withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth.

These decisions align to achieve the medium-term target for consumer price index (CPI) inflation of 4 percent within a band of +/- 2 percent while supporting growth.

The global economy exhibits resilience and is likely to maintain its steady growth in 2024. Inflation is treading down, supported by favorable base effects though stubborn services prices are keeping it elevated relative to targets. Equity markets are rallying, while sovereign bond yields and the US dollar are exhibiting bidirectional movements. Gold prices have surged on haven demand.

The domestic economy is experiencing strong momentum. As per the second advance estimates (SAE), real gross domestic product (GDP) expanded at 7.6 percent in 2023-24 on the back of buoyant domestic demand. Real GDP increased by 8.4 percent in Q3, with strong investment activity and a lower drag from net external demand. On the supply side, gross value added recorded a growth of 6.9 percent in 2023-24, driven by manufacturing and construction activity.