RBI MPC October 2024: The RBI MPC on Wednesday, October 9, kept the key repo rate unchanged for the 10th consecutive time at 6.5 per cent. The repo rate decision has been taken with a 5:1 majority. The RBI MPC decided unanimously “to change the stance to ‘neutral’ and to remain unambiguously focussed on durable alignment on inflation with the target while supporting growth”. The RBI also kept FY25 GDP projection unchanged at 7.2 per cent, while FY25 inflation also remained the same at 4.5 per cent.
Earlier, the RBI MPC had a stance of ‘Withdrawal of Accommodation’.
While announcing the latest bi-monthly monetary policy statement on October 9, RBI Governor Shaktikanta Das said, “Flexible inflation targetting has served us well.”
Food inflation pressures could see some easing later in the FY, he said.
“Prevailing and expected inflation, growth balance have created congenial condition for change in monetary policy stance to ‘neutral’,” said the RBI governor, adding that the retail inflation in September is likely to see big jump due to unfavourable base, pick up in food price momentum.
The RBI is mandated to keep the retail inflation at 4 per cent (with a flexibility of 2 per cent up or down).
The RBI has maintained status quo on benchmark interest rate since February 2023.
The RBI MPC also kept the SDF unchanged at 6.25 per cent, and MSF and Bank Rates maintained at 6.75 per cent. The SDF is the lower band of the interest rate corridor, while the MSF is the upper band.
The reverse repo rate stands at 3.35 per cent.
The repo rate is the rate at which the RBI lends money to the commercial banks, whereas the reverse repo rate on commercial banks’ deposits with the RBI.
The cash reserve ratio (CRR) stands at 4.5 per cent and the statutory liquidity ratio (SLR) stands at 18 per cent.
This was the first meeting of the reconstituted MPC. The three newly appointed external members are Ram Singh, Saugata Bhattacharya and Nagesh Kumar. The MPC was reconstituted by the government last month.
