RBI Monetary Policy February 2024: Central Bank Keeps Interest Rate Unchanged At 6.5%

New Delhi: The Reserve Bank of India (RBI) announced the outcome of the Monetary Policy Committee (MPC) decision on Thursday, keeping the repo rates unchanged at 6.5 percent. The RBI MPC, opting for status quo in the repo rate has maintained monetary policy stance as ‘withdrawal of accommodation’.

The three-day MPC meeting Chaired by RBI Governor Shaktikanta Das, commenced on October 6 and concludeed today.  Announcing the MPC's decision Das said that the committee has unanimously decided to keep the repo rate at 6.5 percent. Shaktikanta Das, announcing the outcome of the policy said that the MPC decided 5:1 ratio focussed on withdrawal of accommodation, in keeping the interest rates steady.

"After a detail assessment of the evolving micro-economic and financial developments and the outlook, the Monetary Policy Committee (MPC) decided by a 5:1 majority to keep the policy rate unchanged at 6.5 per cent," said RBI Governor Shaktikanta Das while announcing the MPC outcome.

Consequently, the reverse repo rate stands at 3.5 percent, the standing deposit facility (SDF) rate remains unchanged at 6.25 percent and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 percent.

Governor Das said that the MPC remains resolute on containing inflation at target of 4 percent, pegging the real GDP growth FY25 at 7 percent, with Q1 at 7.2 percent.  

"Headwinds from geopolitical tensions, volatility in international financial markets and geoeconomic fragmentation, however, pose risks to the outlook. Taking all these factors into consideration, real GDP growth for 2024-25 is projected at 7.0 per cent with Q1 at 7.2 per cent; Q2 at 6.8 per cent; Q3 at 7.0 per cent; and Q4 at 6.9 per cent. The risks are evenly balanced," he said.

A year is divided into six bimonthly reviews of the central bank's monetary policy. Additionally, there are out-of-cycle reviews, where the central bank holds extra sessions in urgent situations.