Rbi mpc key points: The Reserve Bank of India (RBI) has cut the repo rate by 25 basis points on Friday, 7 February. Now the repo rate has come down from 6.5% to 6.25%. RBI Governor Sanjay Malhotra said that this decision has been taken unanimously. Malhotra said that the Monetary Policy Committee (MPC) took this decision because the inflation has declined and it is likely to decrease further.
RBI’s Monetary Policy Committee (MPC) took several major decisions in the last Monetary Policy of the current financial year. The main things of MPC are as follows;
Repo rate cut after five years
The RBI reduced the repo rate (short term lending rate) to 6.25 percent to 6.25 percent. The central bank has cut the repo rate after about five years. Earlier in May, 2020, the repo rate was reduced by 0.40 percent to four percent at the time of Kovid-19 epidemic. Then the RBI started increasing the rates in May 2022 to deal with the risks of Russia-Ukraine War and the series stopped in February 2023. ,
Monetary policy stance remains on ‘neutral’
The Reserve Bank of India has retained the ‘neutral’ monetary policy stance. Neutral trend means that there will be no commitment in the future for any kind of gross in the repo rate. This provides flexibility to deal with rising inflation pressure, instability of global financial markets and geopolitical risks.
GDP growth rate for FY2025-26 estimated to be 6.7%
The Reserve Bank of India (RBI) has estimated the GDP growth rate to be 6.7 percent for FY 2025-26. The RBI said that the GDP growth rate is expected to be 6.4 per cent in FY 2024-25. The financial year, which lasted after a strong growth of 8.2 percent in the last financial year, may have a soft expansion in the economy. According to the central bank, there is a possibility of further improvement in economic activities in the coming year.
RBI Governor Sanjay Malhotra announced the last and its first bilateral monetary policy for the current financial year, saying that the good prospects of Rabi crop and the expected improvement in industrial activities would support the economic growth in 2025-26.
Retail inflation decreased to 4.2 percent in 2025-26
The Reserve Bank of India (RBI) on Friday predicted retail inflation in the next financial year (2025-26) amidst expecting the price of food items to be 4.2 percent. At the same time, in the current financial year, its 4.8 percent estimate was upheld.
RBI Governor Sanjay Malhotra, while giving information about the last bilateral monetary policy review of the current financial year, said that there is no possibility of any shock on the supply marche. With this, there should be a significant decrease in food inflation in view of better production of kharif crops, softening of vegetables in winter and favorable possibilities regarding rabi crops.
RBI’s big action to stop banking fraud
After the MPC meeting on Friday, RBI said that banks and non-banking companies will be given a special ‘domain name’ to save people from cyber fraud. RBI Governor Sanjay Malhotra said after the meeting that increase in digital fraud is a matter of concern. For this, everyone needs to take necessary steps. He said, “A special domain of banks will be given ‘FIN.in’ to prevent cyber fraud. Its registration will begin in April.
The governor said, “To prevent cyber fraud, banks will be given a special domain name ‘Bank.in’ and non-banking companies will be given a domain name named ‘Fin.in’.” He said that it will help to curb this banking fraud.
Main (core) inflation estimates
The RBI Governor said that the main (core) inflation is estimated to increase, but it will remain at a moderate level. Malhotra said that on the other hand there is a risk of inflation going over inflation given the uncertainty in the global financial markets with volatility in the price of energy and adverse weather events on the other hand. He said that keeping all these things in mind, the consumer price index (CPI) based inflation in 2024-25 is estimated to be 4.8 percent in the current financial year and 4.4 percent in the fourth quarter.
EMI will decrease
The repo rate is the interest rate on which commercial banks take loans from the central bank to meet their immediate needs. RBI uses this rate to keep inflation under control. Reduction of repo rate means that the monthly installment (EMI) is expected to be reduced on various loans including houses, vehicles.
Global Economic Outlook challenging
The RBI has described the global economic outlook as challenging. While the Indian economy said that it remains strong and combative.
Fiscal deficit expected to remain within the durable level
Apart from this, the Reserve Bank of India has hoped to remain under the sustainable level of the current account deficit (fiscal deficit). At the same time, till 31 January, India’s foreign exchange reserves were US $ 630.6 billion.
Any target for rupee
The RBI governor also spoke on the ongoing decline in the rupee against the dollar. Malhotra said that the exchange rate policy has been the same for the last several years and the central bank has not targeted a “specific level or scope” for the rupee.