The standing deposit facility (SDF) rate remains unchanged at 6.25 per cent and the marginal standing facility (MSF) rate and the bank rate at 6.75 per cent.

The committee met from February 6 to 8. The repo rate is the rate of interest at which RBI lends to other banks.

The committee also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth.

The decisions are aimed at achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of plus or minus 2 per cent, RBI said in a release.

Announcing the bi-monthly monetary policy, RBI governor Shaktikanta Das said food inflation needs to be monitored so that the benefits gained do not dissipate. The inflation trajectory would be shaped by the evolving food inflation outlook and domestic economic activity is strengthening, the monetary policy statement noted.

CPI inflation is projected at 5.4 per cent for fiscal 2023-24 (FY24) with the fourth quarter (Q4) at 5 per cent. Assuming a normal monsoon next year, CPI inflation for FY25 is projected at 4.5 per cent, with Q1 at 5 per cent; Q2 at 4 per cent; Q3 at 4.6 per cent; and Q4 at 4.7 per cent, the statement said.

As per the first advance estimates released by the National Statistical Office, real gross domestic product (GDP) is expected to grow by 7.3 per cent year on year (YoY) in FY24, underpinned by strong investment activity.

Real GDP growth for FY25 is projected at 7 per cent, with Q1 at 7.2 per cent; Q2 at 6.8 per cent; Q3 at 7 per cent; and Q4 at 6.9 per cent, the statement added.

Fibre2Fashion News Desk (DS)