Updates from the RBI MPC Meeting: The central bank maintains the status quo and keeps the repo rate at 6.5%

The repo rate will remain at 6.5% on Friday, October 6 as the Reserve Bank of India (RBI) has opted to preserve the status quo. The Monetary Policy Committee (MPC), headed by RBI Governor Shaktikanta Das, started its three-day meeting on Wednesday, October 4.

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According to RBI Governor Shaktikanta Das, five out of the six MPC members voted in favor of keeping the central bank’s policy on “Withdrawal of Accommodation.”

India is concentrating on basic development and macroeconomic stability. The outside world is still controllable. India is in a position to replace China as the global economic engine. According to RBI Governor Shaktikanta Das, the twin balance sheet stress has been replaced by the dual balance sheet advantage.

Das went on to say that the services industry in India has grown at its fastest pace in 13 years, mostly as a result of a significant uptick in new business prospects brought on by strong demand conditions.

The central bank also said that real GDP growth in FY 24 remained at 6.5%, and that it would be 6.6% in Q1 of FY 25. Rates for the Standing Deposit Facility and Marginal Standing Facility remained at 6.25% and 6.75%, respectively.

Das said that Core Inflation has eased down by 140 basis points to 4.9%. The future course of inflation will depend on a number of variables, according to Das. In the months of July and August, respectively, vegetable price increases made up a third and a fourth of the CPI inflation.

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In addition, Das said, “Global headline inflation could remain high for a longer period than estimated, in contrast to global trends, domestic economic activity exhibits resilience on the back of strong domestic demand.”

According the RBI, the financial sector is still very robust. According to the most recent statistics from June, the financial metrics of NBFCs are consistent with the banking sector.