RBI MPC Dec Meet: The Reserve Bank of India (RBI) on Friday maintained the status quo on benchmark interest rates. The central bank’s Monetary Policy Committee (MPC) announced key repo rates at 6.5 per cent, keeping it unchanged yet again.
The committee undertook this measure with a 5:1 majority, making this the 11th consecutive time the regulator chose to maintain the status quo on interest rates. Notably, the last time the MPC changed the key rates was in February 2023.
#WATCH | Mumbai | RBI Governor Shaktikanta Das says, “The Standing Deposit Facility (SDF) rate remains at 6.25% and the Marginal Standing Facility (MSF) rate and the Bank Rate at 6.75%…”
(Source: RBI) pic.twitter.com/hg2GS9dQh5
— ANI (@ANI) December 6, 2024
MSF and SDF Rates
Sharing details of the meeting, Governor Shaktikanta Das said that the RBI continued to keep a ‘neutral’ stance on monetary policy.
The committee decided to maintain the status quo on other key rates as well. The committee decided to maintain the Marginal Standing Facility at 6.75 per cent and the Standard Deposit Facility at 6.25 per cent.
“After detailed assessment of the evolving macroeconomic and financial developments and the outlook, the Monetary Policy Committee decided by a majority of 4:2 to keep the policy repo rate unchanged at 6.5 per cent. Consequently, the Standing Deposit Facility (SDF) rate remains at 6.25 per cent and the Marginal Standing Facility (MSF) rate and the bank rate 6.75 per cent,” the RBI Governor said.
Monetary Policy
The governor said that price-stability is important for every segment of the society. Das, who chaired the MPC meeting, added that the committee remains focused on ‘a durable alignment of inflation with the target while supporting growth’.
“High inflation reduces the disposable income in hands of consumers which negatively impacts the real GDP growth,” the governor noted. He pointed out that the financial market volatility, geopolitical conflicts and extreme weather events remained key risks to economic growth.
GDP Projections
The governor informed that the growth projections for the current fiscal year have been downgraded. The RBI slashed the GDP growth rate estimate for the 2024-25 fiscal year (FY25) to 6.6 per cent, from the earlier projection of 7.2 per cent.
Inflation
Meanwhile, pointing out the consistent elevation in food prices, the central bank hiked the retail inflation forecast to 4.8 per cent for the current financial year, in comparison to 4.5 per cent projected in the previous MPC meet.