Reserve Bank Maintains Status Quo in Monetary Policy Update

The Reserve Bank of India's Monetary Policy Committee, led by Governor Shaktikanta Das, announced the continuation of the repo rate at 6.5%. The policy stance shifted to 'neutral', and GDP growth projections were maintained. Key changes included increased transaction limits for UPI123PAY and UPI Lite.

The Reserve Bank of India's Monetary Policy Committee, headed by Governor Shaktikanta Das, revealed its much-anticipated decisions this Wednesday. The committee decided to maintain the benchmark short-term lending rate, the repo rate, at 6.5%. This decision maintains the status quo that has been in place since February 2023.

Alongside this, the monetary policy stance has shifted to a 'neutral' position, reflecting a balanced approach going forward. The GDP growth projections remained unchanged, with forecasts of 7.2% for FY25, marking an optimistic economic outlook. For the upcoming quarters, GDP is projected at 7% for Q2, and 7.4% for both Q3 and Q4.

In terms of inflation, the projection for FY25 stands firm at 4.5%. Innovations to the digital payment ecosystem were also announced, with the UPI123PAY limit for feature phones doubled to Rs 10,000, while the UPI Lite wallet limit increased to Rs 5,000, and the per-transaction limit was increased to Rs 1,000. The committee will reconvene from December 4 to 6 for its next meeting.

(With inputs from agencies.)