The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) has decided to maintain the policy repo rate at 6.50%. This choice was made after carefully analyzing the macroeconomic, monetary, and prospective trends that are currently taking place. The following are the salient points of the RBI’s most recent stance on monetary policy
RBI Policy Rates Unchanged
The policy repo rate is still 6.50 percent%
The rate for the standing transfer facility (SDF) is still 6.25%.
Both the bank rate plus the marginal standing facility (MSF) rate remain at 6.75%.
Focus on Controlling Inflation:
By a decision of 5 out of 6 members, the MPC has agreed to gradually reduce accommodations in order to bring inflation closer to the objective while promoting growth in the economy. The central bank’s inflationary objective stays at 4%, not between 2% and 6%, Governor Shaktikanta Das stated .
Inflation and Economic Outlook:
- Vegetable prices and other variables have caused variations in inflation, although a trend toward easing is anticipated in September.
- Core inflation, which is the CPI less food and fuel, has been made on a downward trend.
- Low kharif sowing, reservoirs levels, and the volatility of world food and energy prices are just a few of the variables that cause uncertainty.
- Government investment, solid domestic demand, as well as supply chain normalcy all contribute to the economy’s resilience.
- Geopolitical tensions, a recession in the world economy, and an unbalanced monsoon are all risks.
Projections for GDP and inflation:
- 6.5% real GDP growth is anticipated for 2023–2024, according to quarterly forecasts.
- 5.4% CPI inflation is anticipated for 2023–2024, according to forecasted quarterly rates.
- Growth and inflation risks are viewed as being equally balanced.
Management of Liquidity
Managing liquidity in keeping with the stance of monetary policy may be accomplished by open market operation (OMO) transactions of government securities, according to RBI Governor Shaktikanta Das.
Article By Debanjana Talukdar
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