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<p>The Reserve Bank of India (RBI) its fifth bimonthly monetary policy of FY25 today, December 6, keeping the benchmark repo rate unchanged at 6.5% for the eleventh consecutive meeting. The Monetary Policy Committee (MPC), chaired by RBI Governor Shaktikanta Das, upheld a 'neutral' monetary stance, signalling a steady approach to addressing economic and financial conditions.</p>
<p>Among key policy moves, the MPC slashed the Cash Reserve Ratio (CRR) by 50 basis points (bps) to 4%, a decision expected to inject ₹1.16 lakh crore into the banking system. This liquidity infusion is seen as a measure to support economic activity amid revised growth and inflation projections.</p>
<h3>Inflation Projections Revised</h3>
<p>The MPC raised its Consumer Price Index (CPI) inflation forecasts for FY25 and the next three quarters, citing persistent price pressures. The updated inflation estimates are:</p>
<ul>
<li>FY25: Revised from 4.5% to 4.8%</li>
<li>Q3FY25: Revised from 4.8% to 5.7%</li>
<li>Q4FY25: Revised from 4.2% to 4.5%</li>
<li>Q1FY26: Revised from 4.3% to 4.6%</li>
<li>Q2FY26: Forecasted at 4%</li>
</ul>
<p>The revised figures reflect cautious optimism about achieving price stability while balancing growth dynamics.</p>
<h3>GDP Growth Outlook Trimmed</h3>
<p>Acknowledging challenges in the global and domestic economic landscape, the RBI lowered its GDP growth projection for FY25 from 7.2% to 6.6%. Governor Das highlighted a confluence of factors, including external demand concerns and domestic headwinds, as reasons for the downward revision.</p>
<h3>Focus on Rural Credit</h3>
<p>In a move aimed at supporting rural livelihoods, the RBI raised the limit for collateral-free agricultural loans from₹1.6 lakh to₹2 lakh per borrower. This enhancement is expected to boost credit availability for farmers, providing critical support to the agriculture sector amid inflationary pressures.</p>
<h3>Neutral Stance, Evolving Outlook</h3>
<p>Governor Das emphasised the RBI's commitment to maintaining financial stability while navigating a challenging macroeconomic environment. "Our stance remains neutral as we assess evolving conditions," he said during the policy announcement.</p>
<p>With inflation risks persisting and growth challenges mounting, the RBI's latest policy signals a careful balancing act as it aims to sustain economic momentum while curbing price pressures.</p>
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Neutral stance maintained; inflation, GDP growth forecasts revised for FY25.

RBI Holds Rates, Cuts CRR: Key Policy Shifts Announced

Neutral stance maintained; inflation, GDP growth forecasts revised for FY25.

December 6, 2024 | 11:13 IST