RBI Bulletin February 2025: Growth, Inflation and Liquidity
Why in the news
The RBI Bulletin painted an improving picture for the economy after the repo rate was cut to 6.25% in February 2025, while flagging inflation and global risks.
Key facts
- Growth is expected to strengthen in H2 FY25, with the rate cut supporting consumption and investment.
- January retail inflation hit a five-month low on softer food prices; strong rabi sowing and good kharif output help.
- Risks to inflation: global instability, energy price swings and weather disruptions.
- Rural demand is boosted by healthy farm output; urban consumption revives on lower inflation and Budget 2025-26 tax relief.
Markets and liquidity
| Indicator | Detail |
|---|---|
| OMO injection | ₹117,875 crore |
| FPI debt inflows | $1.7 billion, helped by India’s inclusion in Bloomberg Emerging Markets Local Currency Index |
| 10-year G-sec yield | Softened by 6 bps in January |
Significance
- The Budget’s focus on agriculture, MSMEs, investment and exports supports medium-term growth.
- Steady borrowing costs and RBI liquidity tools aid financial stability.
Exam angle
- Repo rate after February 2025 cut: 6.25%.
- Index in focus: Bloomberg Emerging Markets Local Currency Index.