Mumbai : The Monetary Policy Committee (MPC) decided by a 4-2 majority to keep the interest rate unchanged at 6.5%, while the SDF rate remains at 6.25% and the MSF rate at 6.75%. However, RBI has slashed Cash Reserve Ratio by 50 basis points to 4% to address liquidity woos, announced RBI governor Shaktikanta Das. The MPC unanimously agreed to maintain this neutral policy stance, signaling a cautious approach to current economic conditions.
“After assessing the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) at its meeting today (December 6, 2024) decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50 per cent. Consequently, the standing deposit facility (SDF) rate remains unchanged at 6.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent. The MPC also decided to continue with the neutral monetary policy stance and to remain unambiguously focused on a durable alignment of inflation with the target, while supporting growth. These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth” he said.
“Growth in real GDP in the second quarter of this year at 5.4% turned out to be much lower than anticipated. This decline in growth was led by a substantial deceleration in industrial growth from 7.4% in the first quarter to 2.1% in the second quarter due to the subdued performance of manufacturing companies, contraction in mining activity and lower electricity demand” he said.