RBI Monetary Policy Today: Governor Shaktikanta Das-Headed MPC Keeps Repo Rate unchanged at 6.5%

Reserve Bank of India's (RBI) Monetary Policy Committee kept repo rate unchanged for the 7th consecutive time at 6.5 per cent. The first MPC meet of the financial year 2025 began on April 3 and concluded today.

RBI had first turned to the pause stance in April last year after hiking repo rate by 250 basis points. Since then, the MPC has kept the repo rate unchanged as retail inflation remained a cause of worry.

The Marginal Standing Facility (MSF) rate and Standing Deposit Facility (SDF) rate remain unchanged at 6.75 per cent and 6.25 per cent, respectively.

Consumer Price Index (CPI) inflation, on the other hand, for the current year is expected to be 4.5 per cent.

India's growth figures continue to paint an optimistic picture of the economy.

As per NSO's (National Statistic Office) data, GDP expanded at its fastest pace in the last six quarters, reaching 8.4 per cent in the December quarter. This strong performance has lifted the growth projection for the fiscal year 2023-24 to 7.6 per cent.

However, inflation might be a key concern as the CPI figure remains above 4 per cent. In February, India's inflation stood at 5.09 per cent. As per market intelligence firm Crisil, the cost of vegetarian food thali increased by seven per cent in March. The sticky food inflation has kept RBI cautious but investors expect rate cuts later in the year.

Global investment firm Goldman Sachs expects RBI to cut rates from third quarter onwards while a recent analysis by Motilal Oswal Financial Services said that the MPC can keep rates unchanged at least till 2025.

Markets took a dive post MPC decision as benchmark indices plunged. Both Sensex and Nifty were trading in the negative territory. At 10:11 am, Sensex was trading at 74,098 level, down by 128 points.