The RBI’s Monetary Policy Committee met for the fourth time in FY 2024-25, from October 7 to 9. Here are the highlights of the meeting.
The repo rate was retained at 6.5% for the tenth consecutive time. The repo rate is the rate at which the RBI gives short-term loans to the commercial banks.
Governor Shaktikanta Das also changed the monetary policy stance to 'neutral', adding that inflation rate along with the growth balance have created a favourable condition.
Headline inflation declined sharply to 3.6% and 3.7% in July and August, respectively, from 5.1% in June. The retail inflation remained below RBI’s median target of 4% for the second month in a row.
RBI projects retail inflation at 4.5% during FY25 assuming a normal monsoon, said the RBI Governor. Food inflation is expected to ease by the fourth quarter of the FY25.
The GDP projection for FY25 was left unchanged at 7.2%, with Q2FY25 GDP projection at 7%, Q3FY25 at 7.4%, and Q4FY25 at 7.4%.
The RBI also announced an increase in the per-transaction limit for UPI 123Pay from ₹5,000 to ₹10,000, and the UPI Lite wallet limit from ₹2,000 to ₹5,000.
As per the MPC, the agriculture sector is expected to perform well on the back of above-normal rainfall, while manufacturing and service activities remain steady.
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