The Reserve Bank of India in its second bi-monthly monetary policy meeting of FY24, decided to leave the repo rate unchanged at 6.5%. It also maintained the gross domestic product growth forecast at 6.5%. The repo rate is the rate at which the RBI lends to banks.
Manish Raj Singhania, President of the Automobile Dealers Body FADA welcomed the move, saying that it was a prudent and calculated stance taken by the Monetary Policy Committee, reflecting a ‘judicious balancing of economic growth and inflation containment.
“Indian Auto Retail is a substantial contributor to both CGST & SGST, signifying its pivotal role in the national economy. As such, RBI's steadfast commitment to stability and inflation control gives us robust confidence. The preservation of the status quo in the repo rate plays an integral part in maintaining the momentum of vehicle demand, thereby positively impacting auto sales and at a time when rural sales are coming back on track,” he added.
The latest data from the Federation of Automobile Dealers Associations (FADA) claims auto retail sales in India experienced a 10 per cent year-on-year (YoY) growth in May.
The growth was driven across categories as reflected in the data. For instance, while two-wheelers (2W),% (3W) saw a growth of 9% and 79% respectively, passenger vehicles (PV) and commercial vehicles (CV) grew by 4%, and 7% respectively.