RBI marginally lowers FY24 inflation projection to 5.1%

Keeps repo rate unchanged | Retains FY24 GDP growth forecast at 6.5%

MUMBAI: The Reserve Bank of India on Thursday left its key interest rate unchanged for a second straight policy meeting but signalled that it wants to see inflation moderate more while keeping an eye on the monsoon. It also pegged the retail inflation for fiscal 2023-24 at 5.1 per cent, a tad lower than its April projection, on expectations of higher rabi crop and the likelihood of normal monsoon. The central bank kept its GDP growth projections for the current fiscal unchanged at 6.5 per cent.

In April, the RBI’s projection of consumer price index (CPI) based retail inflation was 5.2 per cent.

The monetary policy committee (MPC), which has three members from the RBI and an equal number of external experts, voted unanimously to keep the benchmark repurchase or repo rate unchanged at 6.50 per cent.

It decided 5:1 to retain the policy stance focused on “withdrawal of accommodation”, which was introduced in April last year.

While consumer price inflation eased during MarchApril 2023 and moved into the tolerance band, headline inflation is still above the target of 4 per cent and is expected to remain so during the rest of the current fiscal, RBI Governor Shaktikanta Das said announcing the monetary policy decision.