RBI MPC has decided to keep the key policy repo rate unchanged at 6.5%.

RBI Governor Shaktikanta Das said that the MPC decided to remain focused on ‘withdrawal of accommodation’.

The RBI governor said that headline inflation is expected to remain above 4% throughout the 2023-24 fiscal.

Das said that GDP growth in the first quarter of FY2024 is expected at 8%, followed by 6.5% in Q2, 6% in Q3, and 5.7% in Q4.

CPI inflation for FY24 is projected at 5.1%. In April, it had declined to an 18-month low of 4.7%, from 5.7% in March.

Standing Deposit Facility Rate remains at 6.25%. Marginal Standing Facility Rate and Bank Rate are unchanged at 6.75%.

“Headwinds from weak internal demand, volatility in the global financial market, geopolitical tension and El Nino impact pose downside risk to growth outlook."

Shaktikanta Das said that RBI will play a proactive role in dealing with emerging risks to price and financial stability.