- By Aditya Pratap Singh
- Fri, 07 Jun 2024 10:52 AM (IST)
- Source:JND
RBI MPC Meeting: RBI Governor Shaktikanta Das on Friday announced that the Monetary Policy Committee decided in a 4:2 Majority to keep the repo rate unchanged at 6.5 percent. The governor was addressing the press after the completion of a 3-day Monetary policy committee meeting, which began on June 5. The committee consists of 6 members.
The rate reviewing committee, which has kept the rates unchanged for over a year, said that it wants to see an ease in retail inflation to a sustainable level before changing the repo rates. The repo rate, at which the RBI lends short-term funds to banks, stands at 6.5 percent. The Reserve Bank of India (RBI) retained its 4.5 percent inflation projection for 2024–2025 with Q1 at 4.9 percent, Q2 at 3.8 percent, Q3 at 4.6 percent, and Q4 at 4.5 percent. The risks are evenly balanced, said RBI Governor Shaktikanta Das on Friday.
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Das said that CPI headline inflation softened further in March and April but that persistent food inflation pressures outweighed the benefits from core disinflation and fuel deflation. Despite some moderation, inflation persisted in double digits in pulses and vegetables. Core inflation also remained high.
Retail inflation in April was 7.79 percent, while food inflation was 8.38 percent. Inflation has been above the central bank's target of 4 percent for several months now. RBI governor said that the MPC is closely monitoring the evolving inflation dynamics and will take appropriate actions to ensure that inflation remains within the target going forward.
In its statement, the MPC said that the global economy is recovering, but the recovery is uneven across countries. The war in Ukraine has led to a sharp increase in commodity prices, which is putting pressure on inflation. The MPC also noted that the domestic economy is recovering, but the recovery is still fragile.
The MPC said that it will continue to monitor the evolving situation and will take appropriate actions to support the recovery and keep inflation under control.