The Reserve Bank of India’s Monetary Policy Committee (MPC) has opted to maintain the policy repo rate at 6.5% for the sixth consecutive time. This decision, reached by a 5:1 majority vote, comes amid persisting concerns about retail inflation exceeding the target of 4%. The status quo on the repo rate, which governs the interest rate at which banks borrow funds from the RBI, reflects the committee’s cautious stance amidst economic uncertainties.
While the MPC has pegged Consumer Price Inflation (CPI) for the fiscal year 2024 at 5.4%, it forecasts a decrease to 4.5% in fiscal year 2025. Additionally, the RBI projects real GDP growth for fiscal year 2025 to be at 7%, demonstrating confidence in India’s economic prospects.
Addressing the issue of regulatory actions against Paytm, RBI Governor Shaktikanta Das emphasized that such measures are aimed at ensuring systemic stability and safeguarding customers’ interests.
Various industry leaders and experts have weighed in on the RBI’s decision and its implications:
- Dr. Niranjan Hiranandani, MD, Hiranandani Group, commended the RBI’s approach, highlighting the multifaceted efforts to strengthen India’s financial stability and support economic growth.
- Ravi Singhal, CEO, GCL Broking, analysed the impact on the market, noting positive trends in GDP growth projections and inflation outlook.
- LC Mittal, Director, Motia Group, emphasised the importance of the RBI’s accommodative stance for sustaining economic growth and supporting the real estate sector.
- Gurmit Singh Arora, National President, Indian Plumbing Association, highlighted the relief provided by stable interest rates, enabling industries to navigate cost pressures and focus on operational efficiency.
- Anurag Goel, Director, Goel Ganga Developments, welcomed the decision as beneficial for homebuyers, facilitating continued growth in the residential sector.
- Aman Gupta, Director, RPS Group, emphasised the significance of maintaining an accommodative stance amidst global challenges, particularly for the real estate sector.
Overall, the RBI’s decision to maintain the repo rate unchanged reflects a cautious approach aimed at balancing inflationary pressures with the imperative of sustaining economic growth.
