RBI’s 5th Bi-monthly Monetary Policy of FY25

Current Context: The RBI's 5th Bi-monthly Monetary Policy of FY25 was announced on December 6, 2024.

• Here are the highlights:
• Repo Rate Unchanged: The RBI kept the benchmark repo rate unchanged at 6.5% for the 11th consecutive meeting.
• Cash Reserve Ratio (CRR): The CRR was reduced by 50 basis points (bps) to 4% to improve liquidity.
• GDP Growth Forecast: The GDP growth forecast for FY25 was revised downward to 6.6% from the previous estimate of 7.2%.
• Inflation Forecast: The RBI raised the inflation forecast for FY25 to 4.8% from 4.5%, with Q3 at 5.7% and Q4 at 4.5%.
• Policy Stance: The monetary policy stance remains neutral, focusing on durable alignment of inflation with the target while supporting growth.

Question:

1 What is the revised inflation forecast for FY25 as per the RBI’s 5th Bi-monthly Monetary Policy?

• A) 4.3%
• B) 4.5%
• C) 4.8%
• D) 5.0%

Answer: C) The inflation forecast for FY25 was increased to 4.8% from 4.5%. For Q3, the estimate is 5.7%, and for Q4, it is 4.5%.