RBI MPC Highlights: Repo Rate Remains Unchanged At 6.5%; Here Are The Other Major Updates

Repo Rate: The Reserve Bank of India has decided to maintain the repo rate at 6.5 per cent, with a majority vote of 5 to 1. This decision aims to align inflation with set targets

By : ABP News Bureau | Updated at : 09 Oct 2024 11:48 AM (IST)

Governor Das emphasised that banks and non-banking financial companies (NBFCs) need to evaluate their exposures carefully to mitigate risks
Source : PTI

The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC), led by Governor Shaktikanta Das, concluded its three-day review meeting on Wednesday. The committee kept the repo rate steady at 6.5 per cent, marking the tenth consecutive meeting without any changes.  The committee comprises three RBI members and three external members. It was the fourth MPC session for the fiscal year 2024-25, with a total of six meetings planned for the year. 

Key Highlights From The Meeting

Repo Rate: The Reserve Bank of India has decided to maintain the repo rate at 6.5 per cent, with a majority vote of 5 to 1. This decision aims to align inflation with set targets.

GDP Forecast: The GDP growth forecast remains steady, with projected rates of 7 per cent for Q2, followed by 7.4 per cent for both Q3 and Q4 and a slight dip to 7.3 per cent in Q1 of FY26. For the entire fiscal year 2025, the growth projection remains unchanged at 7.2 per cent.

SDF & MSF Rates: The Standing Deposit Facility (SDF) rate is set at 6.25 per cent, while both the Marginal Standing Facility (MSF) rate and the bank rate are maintained at 6.75 per cent.

Inflation Projections: Inflation for FY25 is anticipated at 4.5 per cent. Quarterly estimates indicate 4.1 per cent in Q2, rising to 4.8 per cent in Q3, before easing slightly to 4.3 per cent in Q1 of FY26.

State of the Indian Rupee: The Indian rupee demonstrates the least volatility compared to other currencies, reflecting stability in the foreign exchange market, said Das.

RBI’s Message to NBFCs: Governor Das emphasised that banks and non-banking financial companies (NBFCs) need to evaluate their exposures carefully to mitigate risks.

UPI Transaction Limits: The transaction limit for UPI One Three Pay has been increased from Rs 5,000 to Rs 10,000. Additionally, the UPI Lite wallet limit has been raised from Rs 2,000 to Rs 5,000, with the per-transaction limit set at Rs 1,000.

FPI Flows: Foreign Portfolio Investment (FPI) flows have shown a notable turnaround, shifting from net outflows to net inflows of $19.2 billion from June to October.

Current Account Deficit (CAD): India's current account deficit widened to 1.1 per cent of GDP in Q1 FY25, indicating a need to monitor external financial stability.

Responsible Lending Practices: The RBI has mandated that banks and NBFCs cannot impose pre-payment penalties on any floating rate term loans granted to individual borrowers for non-business purposes, promoting responsible lending.

Also Read : RBI MPC Live Updates: Repo Rate Remains Unchanged At 6.5%, Inflation Expected To Rise To 4.8%

Published at : 09 Oct 2024 11:48 AM (IST)
Tags :
RBI Governor Shaktikanta Das INFLATION RBI MPC Highlights Decision On Repo Rate GDP Predictions

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