- Currently at its February review meeting, the Reserve Bank of India’s (RBI) Monetary Policy Committee without considering any further change decided to continue with its earlier set terms with the policy repo rate remaining at 6.5% also for the sixth consecutive time. A small recap here, the interest rate at which the RBI loans money to other banks is known as the repo rate.
The task of determining the policy repo rate to meet the inflation target while keeping growth in mind has been given to the monetary policy committee.
Although it is still high and was 5.69 percent in December 2023, retail inflation in the current fiscal year has decreased from its top of 7.44 percent in July 2023. Nevertheless, it is still within the Reserve Bank’s comfort zone of 4-6 percent.
According to Das, growth is holding up better than anticipated and inflation is getting closer to the target. While retail inflation in India is over the desired 4 percent scenario, it is still within the RBI’s comfortable range of 2 to 6 percent. The committee for monetary policy has been entrusted with figuring out the policy repo rate to satisfy the objective of reducing inflation while taking growth into consideration.
- Retail prices in the current fiscal year is declining from its peak of 7.44 percent in July 2023, whereas it is nonetheless elevated at 5.69 percent in December 2023. That being said, it remains inside the Reserve Bank’s preferred range of 4–6%.
- Das claims that inflation is approaching the goal and economic expansion is holding up as expected. Even while India’s consumer price inflation is higher than the targeted 4 percent rate, it is nevertheless within the safe 2 to 6 % range set by the RBI.
- The December figure was 5.69 percent. As per Das, the Monetary Policy Committee (MPC) also decided, with five of the six members voting in favour, to keep focusing on removing accommodation to ensure that inflation progressively gets closer to the target while encouraging growth.