June 7th 2024.
In its latest announcement, the Reserve Bank of India (RBI) shared its decision to maintain the policy rate for the eighth consecutive time, citing a need to closely monitor inflation. This comes after a pause in the rate increase cycle that began in April of last year, when six consecutive rate hikes resulted in a 250 basis point increase since May 2022.
During the announcement of the second bi-monthly monetary policy for the current financial year, RBI Governor Shaktikanta Das explained that the Monetary Policy Committee (MPC) has decided to keep the repo rate steady at 6.5 per cent. He emphasized that the MPC will continue to keep a close eye on the elevated levels of food inflation, especially with the expectation of a normal monsoon season.
In terms of economic growth, the RBI has raised its projection to 7.2 per cent from the previous estimate of 7 per cent for the current financial year. This reflects the RBI's confidence in the country's economic prospects and its ability to sustain growth in the face of various challenges.
It is worth noting that the government has tasked the RBI with maintaining the Consumer Price Index (CPI) inflation at 4 per cent with a margin of 2 per cent on either side. This is a crucial responsibility that the RBI takes seriously, and it will continue to work towards achieving this target in the coming months.
Overall, the RBI's decision to keep the policy rate unchanged highlights its commitment to maintaining price stability and supporting economic growth. As we move ahead, the central bank will continue to closely monitor the evolving economic conditions and make necessary adjustments to ensure a stable and prosperous economy for all.
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