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The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) has decided to maintain the repo rate at 6.5% during its second bi-monthly monetary policy meeting for FY24. The RBI has reiterated its GDP growth forecast for FY24, expecting it to remain at 6.5%. Governor Shaktikanta Das emphasized the resilience of the Indian economy and financial sector in the face of global challenges.
According to the MPC, the growth trajectory is expected to vary throughout the year, with a projected surge to 8% in the first quarter followed by a gradual decline to 5.7% in the final quarter. These projections indicate a strong start to the fiscal year, followed by a moderate slowdown.
Furthermore, the RBI has revised its retail inflation projection for FY24, lowering it to 5.1% from the previous estimate of 5.2%. Despite this adjustment, the Governor highlighted that headline inflation remains above the RBI's target of 4% and is anticipated to persist above the target for the remainder of the year.