RBI MPC expects a normal monsoon and lowers its FY25 inflation estimate to 4.5%.

**The Reserve Bank of India (RBI)**, India's central banking institution, plays a pivotal role in shaping the country's monetary policy, financial stability, and economic growth. Let's delve into some recent developments and key insights related to the RBI:

1. **Monetary Policy Committee (MPC) Meeting**:

    - The **MPC** recently concluded its meeting, maintaining the **repo rate** at **6.5%**. This decision comes amidst concerns over inflation, with retail inflation remaining near the upper end of the central bank's comfort zone¹.

    - The **repo rate** is the rate at which the RBI lends money to commercial banks. Keeping it unchanged signals the RBI's cautious approach towards balancing economic growth with inflation containment.

 

2. **Inflation Projections**:

    - RBI Governor **Shaktikanta Das** projected inflation for the fiscal year 2025 at **4.5%**, assuming a normal monsoon. The first quarter (April-June) is expected to see **4.9%** inflation, followed by **3.8%** in the second quarter (July-Sept), **4.6%** in the third quarter (Oct-Dec), and **4.5%** in the fourth quarter².

    - The RBI's focus on inflation control aims to sustain hard-earned progress in reducing inflation consistently.

3. **Financial Markets and Policy Decisions**:

    - The **Sensex** and **Nifty** recently ended at record closing highs ahead of the RBI policy decision. Financial stocks, including **HDFC Bank**, witnessed growth after posting sequential deposit growth in the March quarter¹.

    - The RBI's circular prohibiting regulated entities from investing in **Alternative Investment Funds (AIFs)** with downstream investments in debtor companies had significant implications for investors³.

    - The RBI's recent guidelines on penal charges for loan accounts prohibit commercial banks and finance companies from imposing penal rates on loan defaults or non-compliance events⁴.

4. **Balancing Growth and Stability**:

    - The RBI's stance indicates a careful balance between economic growth and inflation containment. It emphasizes stability in the financial landscape while addressing inflationary pressures³.

    - The RBI's commitment to achieving the **4% medium-term inflation target** underscores its cautious approach towards policy rates³.

In summary, the RBI continues to navigate economic challenges, ensuring stability, and fostering growth in the Indian financial ecosystem. Its decisions impact not only financial markets but also the lives of millions of citizens across the country..

**Reserve Bank of India has for seventh consecutive time maintained its primary lending rate unchanged at 6.5%**

1.The Reserve Bank of India maintains the benchmark lending rate at 6.5% for a seventh straight period, according to NDTV.

2.RBI Governor Shaktikanta Das projects that India's GDP would expand by 7% in FY25, according to PTI.

3.As of March 29, India's foreign exchange reserves stood at an unprecedented USD 645.6 billion: RBI Governor

4.RBI will release a smartphone app to make it easier for individuals to buy government securities: Shaktikanta Das, Guru

5.Compared to its counterparts in emerging markets, the Indian rupee has mostly stayed range-bound and has shown the least volatility in 2023: RBI Governor

6.For the current fiscal year, the RBI maintains its 4.5 percent inflation prediction with a risk-balanced assumption of a regular monsoon.

7.RBI will soon announce the International Financial Services Center's sovereign green bond trading scheme: RBI Governor

8.Shaktikanta Das, governor of the RBI, states that India remains the country that receives the most remittances.

9.Building up substantial currency reserves as a buffer is our main priority: Guv Shaktikanta Das of RBI

10.The credit market's implementation of monetary policy is still a "work in progress," according to RBI Governor

11.RBI Governor: "All stakeholders—banks, NBFCs, and other financial institutions—have a shared responsibility for ensuring financial stability."

12.The top priority that banks, NBFCs, and other financial institutions must continue to pay to governance is: RBI Governor

13.The goal of our work is to maintain price stability over the long run, according to RBI Governor Shaktikanta Das.

14.Excessive and ongoing food inflation may undermine the foundation of inflationary expectations: RBI Governor

15.The RBI will continue to be adaptable and nimble in managing liquidity: RBI Governor

16.The world economy is still growing, but the recent spike in crude oil prices needs to be carefully watched: Guv Shaktikanta Das of RBI

17.Reducing inflationary pressure and maintaining growth in the industrial and services sectors should encourage private investment, according to RBI Governor

18.Upside risks to commodities prices are posed by ongoing geopolitical tensions: RBI Governor

19.Pressures on food prices increased in February; RBI Governor: MPC is watchful for inflation's upward trend.

20.Rural demand is catching up, and in FY'25, consumption is predicted to drive economic growth: RBI Governor

21.According to Guv Shaktikanta Das, MPC would not waver in its resolve to bring inflation in line with the RBI's 4 percent target.

22.The high level of global debt to GDP could have a knock-on effect for emerging economies: RBI Governor

23.MPC chooses to keep concentrating on ending its accommodating stance: Governor of RBI Shaktikanta Das

24.Strong economic expectations provide policymakers room to continue concentrating on hitting the 4 percent target for inflation: RBI Governor

25.The RBI Governor made the monetary policy decision by a majority vote of 5 to 1.

26.We keep trying to learn, adapt, and innovate while carrying out our many duties: Guv Shaktikanta Das of RBI

27.The development of the Indian economy is intimately linked to the Reserve Bank's journey: Governor of RBI Shaktikanta Das

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Governor Shaktikanta Das announced the RBI's Monetary Policy Committee's (MPC) revised FY25 CPI (consumer price index) inflation projection, down from 5.4% to 4.5%. This was stated in the Governor's first monetary policy review of FY25 on Friday, April 5. This is the RBI MPC's final meeting before the results of the general election are declared.

According to the governor of the RBI, it's critical that CPI inflation stay within goal and continue to decline. The CPI inflation objective for the medium term is 4%, with a tolerance of plus or minus 2%.

"The elephant in the room was inflation, which took a stroll and seems to be making its way back to the forest two years ago at this time, when CPI inflation peaked at 7.8% in April 2022. The RBI Governor stated, "We would like the elephant to go back into the jungle and stay there permanently.

The RBI has predicted 4.9% CPI inflation for the first quarter (April–June) of this fiscal year.

Governor Das stated that "efforts will be made to ensure fuller transmission of policy actions" and that "food inflation continues to exhibit volatility."

The central bank stated that the changing food inflation outlook would influence the inflation trajectory in its most recent policy review in February. In FY24, it had predicted 5.4% CPI inflation, with 5% CPI inflation in the fourth quarter (Q4FY24).

On April 12, the official retail inflation figures for the month of March will be made available, offering a more comprehensive view of the state of the economy.

For the sixth consecutive time, the RBI MPC has maintained the 6.5% key policy repo rate. As a result, the rates for the Marginal Standing Facility (MSF) and the Standing Deposit Facility will continue to be 6.75% and 6.25%, respectively.