RBI News – In December 2024, the Reserve Bank of India (RBI) kept the repo rate steady at 6.5% but slashed the Cash Reserve Ratio (CRR) by 50 basis points to 4%, releasing liquidity to spur economic activity. The decision reflected caution amid global uncertainties, including U.S. tariff threats.
Highlights
- The RBI maintained the repo rate at 6.5% but
- Reduced the CRR by 50 basis points to 4%, aiming to boost liquidity.
- The FY25 GDP growth forecast was cut to 6.6%, with inflation expected to ease in Q4.
RBI Maintains Repo Rate, Cuts CRR in December 2024
The RBI downgraded its FY25 GDP growth forecast from 7.2% to 6.6%, citing external demand slowdowns, while projecting inflation to peak in Q3 before easing in Q4. Governor Shaktikanta Das emphasized balancing growth and price stability.
The CRR cut aimed to enhance credit flow to businesses and consumers, supporting sectors like manufacturing and services. Analysts praised the move but noted that persistent inflation could limit further easing.
This policy underscored the RBI’s proactive stance in navigating economic challenges, ensuring liquidity without compromising inflation control.
