RBI announced some basic details about the RBI monetary policy including the repo rate. The central bank will keep the benchmark repo rate at 6.5% for the 8th time. RBI made the announcement on 7 June 2024. The Repo Rate is a benchmark interest rate. It affects the monetary system and inflation as well. Currently, the data shows that food inflation is becoming a big concern. Thus, people are facing difficulty in maintaining their basic needs.
RBI Monetary Policy Highlights
RBI monetary policy committee decides the repo rate from time to time to adjust different economic factors like inflation. Thus, the committee forms a decision with its six members voting. The member’s votes take place today on 7 June 2024. The four out of six voted to keep the same repo rate. Thus, the central bank decides to keep the repo rate unchanged at 6.5%. It will also continue its stance of ‘Withdrawal of Accommodation’.
RBI Governor, Shaktikanta Das, also gave details about the inflation reports. He mentions that the country has controlled the situation of inflation. However, food inflation is becoming a matter. There is a serious need to pay attention towards it. Food inflation depends largely on the production and availability of food as well. We all know that the monsoon affects the crops and its ripening. However, the normal monsoon can only guarantee some controls and stability in inflation.
The GDP growth forecast for FY25 is 7.2% starting from 7%. GDP growth will help in providing a better lifestyle to the rural and urban population. The monsoon will also help in the better production of Kharif Crops. There are already predictions about agricultural production. Apart from the monetary policy, the government and central bank will also try to have strong financials and better risk and loan management. As per the details, the inflation rate for April 2024 was 4.83%.
RBI always tries to keep an eye on the domestic growth and inflation conditions. Inflation is not only a problem for the developing countries. Several developed countries face this issue too. However, India is among the top countries that manage their inflation rates better. RBI practices play the best role in the controlling of inflation. Thus, to conclude, RBI’s Monetary Policy Committee decided to keep the benchmark repo rate as it is to 6.5%. RBI has been managing the monetary system of India for several years. It has been the backbone of the country that supported it in the difficult times.