The Reserve Bank of India (RBI) on Thursday kept the repo rate unchanged at 6.5%. RBI Governor Shaktikanta Das said that the six-member monetary policy committee (MPC) unanimously decided to keep the lending rate unchanged.
The MPC has kept the repo rate unchanged for the last three cycles. Before that, the committee had hiked the repo rate by 250 basis points from May 2022 to February 2023.
Das said that the CPI inflation forecast for FY2023–24 has been raised to 5.4% from 5.1% due to vegetable price shocks, while the GDP forecast has been retained at 6.5%. “While the vegetable price shock may reverse quickly, possible El Nino weather conditions, along with global food prices, need to be watched closely, against the backdrop of a skewed Southwest Monsoon,” Das said.
The CPI inflation forecast in the current fiscal year for Q2 and Q3 has been raised to 6.2% from 5.2%, and 5.7% from 5.4%, respectively. While the CPI inflation forecast for Q4 has been retained at 5.2%.
“The MPC remains resolute in its commitment to align inflation to the 4% target, and anchoring of inflation expectations,” the RBI governor said.
Additionally, the GDP forecast for FY24 has been retained at 6.5%. The GDP forecast in the current fiscal year for Q1, Q2, Q3, and Q4 has been kept at 8%, 6.5%, 6%, and 5.7%, respectively.
