New Delhi, May 29 || The Reserve Bank of India (RBI) said on Thursday it will continue to undertake liquidity management operations in sync with the monetary policy stance to keep system liquidity adequate to meet the productive requirements of the economy.
A benign inflation outlook and moderate growth warrant a monetary policy to be growth-supportive, while remaining watchful about the rapidly evolving global macroeconomic conditions, said the Central Bank in its 2024-25 annual report.
“It will deploy an appropriate mix of instruments to modulate frictional as well as durable liquidity, ensuring orderly movement of money market interest rates,” said the Reserve Bank.
With inflation falling below the target in February and March 2025, supported by a sharp fall in food inflation, there is now greater confidence about a durable alignment of headline inflation with the target of 4.0 per cent over a 12-month horizon.
Accordingly, the RBI MPC in its April meeting unanimously voted to reduce the policy repo rate by 25 bps to 6.0 per cent. Moreover, the MPC also decided to change the stance from neutral to accommodative.
Inflation converged closer towards the target during 2024-25, aided by easing input cost pressures, proactive supply management measures by the government and continuing transmission of past monetary policy actions.