In a critical move to sustain economic stability, the Reserve Bank of India (RBI) announced on June 7, 2024, that the repo rate will remain unchanged at 6.5%. This decision by the Monetary Policy Committee (MPC), led by Governor Shaktikanta Das, underscores a cautious approach to managing inflation while fostering growth. The repo rate, which influences borrowing costs across the economy, has been held steady for the sixth consecutive time, reflecting a balanced stance on economic policy.

Governor Das highlighted that the central bank’s focus remains on the “withdrawal of accommodation” to ensure inflation gradually aligns with the target while supporting economic activity. The RBI projects inflation for the fiscal year 2025 to be 4.5%, with quarterly variations, emphasizing a vigilant stance against potential price rises. Simultaneously, the GDP growth forecast for FY25 has been revised upwards to 7%, signaling confidence in robust domestic economic activity and resilient growth prospects.

In addition to maintaining the repo rate, the RBI introduced several measures to enhance financial accessibility and infrastructure. These include a scheme for trading sovereign green bonds at the International Financial Services Centre (IFSC), a new mobile app for the RBI’s Retail Direct Scheme, and a draft circular for the Liquidity Coverage Ratio (LCR) framework for banks. These initiatives aim to bolster the financial ecosystem and provide greater flexibility and convenience to market participants. The central bank’s nuanced policy approach continues to navigate the complexities of economic management in a dynamic global environment.