RBI Keeps Repo Rate Unchanged At 6.5 Per Cent, Cuts CRR By 50 Basis Points To 4 Per Cent; FY25 Growth Target Lowered To 6.6 Per Cent

Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday (6 December) announced the fifth bi-monthly monetary policy of FY25.

The six-member Monetary Policy Committee (MPC) led by RBI Governor has decided to keep the benchmark repo rate unchanged at 6.5 per cent for the eleventh straight meeting by a 4:2 majority, and maintain the monetary policy stance ‘Neutral’.

An unchanged repo rate means the loan interest rates too are likely to remain unchanged.

The RBI paused the rate increase cycle in April 2023, after six straight rate hikes of 250 basis points since May 2022.

Further, the MPC slashed the cash reserve ratio (CRR) by 50 basis points (bps) to 4 per cent.

The MPC, which meets every two months, lowered the growth target for this fiscal to 6.6 per cent from 7.3 per cent in the July-September quarter.

This comes after the Q2 growth turned out to be 5.4 per cent, lower than the projected figure.

Inflation surged above the 6 per cent tolerance level in October, the RBI governor said, and that food inflation will start easing in the January-March quarter.

The MPC, he said, believes that only with durable price stability can strong foundations be secured for high growth.

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