Reserve Bank of India’s (RBI) 1st Bi-monthly Monetary Policy for the Financial Year 2024-25

Current Context: The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) met and released the 1st Bi-monthly Monetary Policy of Financial Year 2024-25 (FY25) on April 5, 2024.

• GDP Growth: The RBI’s Monetary Policy Committee (MPC) has projected India’s real Gross Domestic Product (GDP) growth at 7% for FY25. The quarterly breakdown is as follows:
• Q1 (April-June): 7.1%
• Q2 (July-September): 6.9%
• Q3 (October-December): 7%
• Q4 (January-March): 7%
• Policy Rates: The MPC kept the policy rates unchanged. Here are the details:
• Policy Repo Rate: 6.50%
• Fixed Reverse Repo Rate: 3.35%
• Standing Deposit Facility (SDF) Rate: 6.25%
• Marginal Standing Facility (MSF) Rate: 6.75%
• Bank Rate: 6.75%
• Cash Reserve Ratio (CRR): 4.50%
• Statutory Liquidity Ratio (SLR): 18%
• Inflation: The Consumer Price Index (CPI) inflation or retail inflation is projected at 4.5% for FY25. The quarterly breakdown is as follows:
• Q1: 4.9%
• Q2: 3.8%
• Q3: 4.6%
• Q4: 4.5%
• Forex Reserves: India’s Foreign Exchange (Forex) Reserves hit a new high for the third consecutive week, reaching USD 645.58 billion by the end of the week on March 29, 2024.
• The stance of the policy is to focus on withdrawal of accommodation to ensure that inflation progressively aligns with the target, while supporting growth.

Question:

Q.1 What is the Policy Repo Rate as per the 1st Bi-monthly Monetary Policy of FY25?
a. 6.25%
b. 6.50%
c. 6.75%
d. 7.00%