Wed Oct 09 06:30:31 UTC 2024: ## RBI Holds Repo Rate Steady for 10th Consecutive Time, Maintains Inflation Forecast at 4.5%
**Mumbai, India -** The Reserve Bank of India (RBI) has announced its decision to maintain the repo rate at 6.5% for the tenth consecutive time, defying market expectations for a potential cut following the US Federal Reserve’s recent rate reduction.
Despite holding the rate steady, RBI Governor Shaktikanta Das expressed concerns regarding recent price increases in food and metal, warning that continued escalation could push consumer price inflation higher. The central bank, however, has projected inflation to remain at 4.5% for the current fiscal year 2025, forecasting 4.1% in the September 2024 quarter, 4.8% in the December 2024 quarter, 4.2% in the March 2025 quarter, and 4.3% in the June 2025 quarter. The RBI’s target inflation rate remains between 2-4%.
Regarding economic growth, the RBI predicts a 7.2% GDP growth for the fiscal year 2025, with 7.2% growth in the second quarter, 7.4% in the third quarter, 7.4% in the fourth quarter, and 7.3% in the first quarter of the following fiscal year (2025-26).
However, the growth of core industries remains sluggish. The output of 8 core industries fell by 1.8% in the first quarter (April-June) of the current fiscal year.
The RBI’s decision to hold the repo rate steady means no immediate changes are expected in home loan EMIs, which could provide relief to borrowers. However, the potential for rising inflation and the slow growth of core industries remain areas of concern for the Indian economy.
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