RBI did not change the repo rate for the eighth time in a row, no relief even after the election results

RBI keeps repo rates on hold: The monetary policy of the Reserve Bank of India has decided to maintain the repo rate at 6.5 percent at the end of its three-day meeting. 4 members of the committee have supported keeping the repo rate unchanged, even though the RBI has taken note of the falling fuel prices in the MPC meeting. Because the threat of global crisis remains. Therefore, repo rates have been kept intact to face any new challenge.

Besides this, the MPC, headed by RBI Governor Shaktikanta Das, also kept the Standing Deposit Facility (SDF) and Marginal Standing Facility (MSF) rates unchanged at 6.25 per cent and 6.75 per cent, respectively. ,

GDP growth estimate for 2024-25 raised by 0.2 percent

The Reserve Bank has raised its real GDP growth forecast for the current financial year 2024-25 (FY25) to 7.2 percent from the previous level of 7 percent. This increase comes in the wake of analysts estimating GDP growth to rise to 8.2 percent in the financial year 2023-24 (FY24). The RBI began its three-day Monetary Policy Committee (MPC) meeting on June 5. Earlier, the RBI had raised the rate in February 2023. The RBI governor said that if GDP growth is recorded at 7.2 percent in this financial year, then the country's GDP growth will be recorded above 7 percent for the fourth consecutive year.

Retail inflation is estimated to be 4.5 percent this year

Based on the current RBI inflation data, retail inflation is projected to be 4.5 per cent in FY2024-25. Although retail inflation fell to 4.83 per cent in April from 4.85 per cent in March, the RBI has still kept the repo rate on wait-and-watch mode as it remains above the MPC's target.

The MPC also raised its GDP growth forecast for each of the 4 quarters of FY25. For the first quarter of FY25, the RBI now projects GDP growth at 7.2 per cent (6.8 per cent earlier) in Q2FY25, up from 7.2 per cent earlier. The GDP growth forecast for the third quarter has been raised to 7.3 per cent from 7 per cent earlier and the GDP forecast for the fourth quarter has been raised to 7.2 per cent from 6.9 per cent.