RBI Monetary Policy: Rates Remain Unchanged, Growth Outlook Bright

In line with expectations, the Reserve Bank of India (RBI) Governor, Shaktikanta Das, affirmed on Friday, April 5, the retention of the key policy repo rate at 6.5 per cent. This decision marks the continuation of a stable monetary stance by the RBI.

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1. No Change in Rate, Stance

The RBI’s Monetary Policy Committee (MPC) maintained key rates at 6.5 per cent, with a 5:1 majority vote. The standing deposit facility (SDF) rate, marginal standing facility (MSF) rate and Bank Rate also remained constant, indicating a consistent approach by the central bank. Governor Das emphasised the MPC's commitment to focus on 'withdrawal of accommodation,' aligning inflation with the target while supporting growth.

2. Growth Outlook Robust

The RBI foresees robust economic growth in 2024-25, driven by strong rural demand alongside buoyant urban consumption. Factors contributing to this positive outlook include promising prospects for agricultural activities, supported by favourable weather conditions.Governor Das highlighted the bright outlook for agriculture, rural activities, and the sustained momentum in manufacturing and services sectors, contributing to the projected real GDP growth of 7 per cent for FY25.

3. CPI Inflation Forecast

While inflation is easing, the RBI remains vigilant in its fight against it. Governor Das noted the significant progress made in reducing inflation, cautioning against supply-side shocks that could disrupt the trajectory. Uncertainties in food prices persist, influencing the inflation outlook. However, expectations of a record rabi wheat production and a normal monsoon offer optimism for price stability. The CPI inflation forecast for FY25 stands at 4.5 per cent, distributed across quarters to reflect evolving economic conditions.

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4. Trading of Sovereign Green Bonds in IFSC

In a move towards sustainable finance, the RBI plans to introduce a scheme for investment and trading in Sovereign Green Bonds within the International Financial Services Centre (IFSC). This initiative aims to enhance non-resident participation in green investments.

5. Review of LCR Framework

Recognizing the evolving banking landscape, the RBI proposes a review of the liquidity coverage ratio (LCR) framework. A draft circular will be issued for stakeholder consultation, addressing challenges posed by technological advancements in banking operations.GovernorDas emphasized the necessity for a comprehensive review to ensure the resilience of banks amidst rapid technological changes.


The RBI's decision to maintain status quo on rates reflects confidence in India's economic trajectory. With a positive growth outlook and strategic measures in place, the central bank aims to navigate potential challenges while fostering sustainable economic development.

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