MUMBAI: The Reserve Bank of India (RBI) has decided to keep the repo rate unchanged at 6.5%. The decision, taken at the central bank's Monetary Policy Committee (MPC) meeting on Friday, marks the eighth time in a row that the status quo on the policy rate has been made with a view to keep the focus on battling high inflation. The MPC has revised its GDP growth forecast upwards from the earlier 7% estimate to 7.2% for the financial year 2024-2025. It has also decided to remain focused on the withdrawal of accommodation to ensure that inflation does not accelerate while supporting growth and the bank retained FY25 inflation forecast at 4.5%.

RBI  governor Shaktikanta Das said, "These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2% while supporting growth." Notably Das, along with other MPC members like Shashanka Bhide, Rajiv Ranjan, and Michael Debabrata Patra voted to keep the policy repo rate unchanged at 6.5% and to remain focused on the withdrawal of accommodation, while their colleagues Ashima Goyal and Jayanth R. Varma voted to reduce the policy repo rate by 25 basis points and for a change in stance to neutral.

In an important initiative taken for the general public at the MPC meeting to combat the growing threat of digital payment fraud, the RBI announced the establishment of a Digital Payments Intelligence Platform during today's MPC meeting. This platform will leverage advanced technologies like AI and machine learning to identify and mitigate fraud risks, ultimately leading to a safer digital payments environment. This initiative underscores the RBI's commitment to prioritizing customer protection, which is further evident in their consistent efforts to introduce guidelines surrounding data protection, cybersecurity, and KYC procedures.

During the announcement of the meeting, Das said CPI headline inflation softened further during March-April, though persisting food inflation pressures offset the gains of disinflation in core and deflation in the fuel groups. Despite some moderation, pulses and vegetables inflation remained firmly in double digits. Vegetable prices are experiencing a summer uptick following a shallow winter season correction. The exceptionally hot summer season and low reservoir levels may put stress on the summer crop of vegetables and fruits, he said, adding that the rabi arrivals of pulses and vegetables need to be carefully monitored.