RBI Monetary Policy 2024 Highlights: Key Points

RBI Monetary Policy 2024 Highlights: Key Points

The Reserve Bank of India (RBI) has released its Monetary Policy Statement for 2024, outlining its assessment of the economy and policy measures. Here are the key highlights:

Growth Projections:

Real GDP growth projected at 7.2% for FY25, supported by a recovery in domestic demand.
Growth estimated at 7.8% in Q1 of FY24.

Inflation Target:

CPI inflation targeted at 4.5% for FY25, with a tolerance band of +/- 2%.
Inflation projected to remain above 6% in Q1 of FY24, but moderate thereafter.

Monetary Policy Stance:

Monetary policy stance remains “accommodative,” supporting growth while keeping inflation within the target.

Repo Rate Unchanged:

The RBI maintained the repo rate, the key policy rate, at 5.9%.

Liquidity Management:

Variable rate reverse repo (VRRR) auctions will continue to absorb liquidity.
Marginal standing facility (MSF) and intraday liquidity facility (ILF) will be available as liquidity tools.

Financial Stability:

RBI emphasized the need to maintain financial stability and resilience.
Banks encouraged to strengthen their capital and risk management practices.

External Sector:

RBI noted the risks to external stability from global financial conditions and geopolitical uncertainties.
Measures to mitigate external risks include rupee swap arrangements, foreign exchange reserves management, and monitoring of capital flows.

Sustainable Finance:

RBI announced the launch of a regulatory framework for climate risk management in banks.
Measures to promote green finance and sustainable lending.

Looking Ahead:

RBI will continue to monitor economic and financial conditions and adjust its policy stance as necessary.
The focus remains on supporting growth, keeping inflation within the target, and maintaining financial stability.

Keywords:

RBI Monetary Policy
GDP Growth
CPI Inflation
Repo Rate
Liquidity Management
Financial Stability
External Sector
Sustainable Finance
Accommodative Stance