The RBI’s financial coverage committee on Thursday determined to maintain the repo price unchanged for the sixth time in a row, at 6.5 per cent. The choice has been taken with 5 members in favour of the choice out of the entire 6. The RBI has stored the FY24 GDP projection unchanged at 7 per cent. It has additionally stored inflation forecast unchanged at 5.4 per cent for 2023-24.
The coverage stance continues to be ‘withdrawal of accommodation’.
The RBI MPC additionally stored the SDF unchanged at 6.25 per cent, and MSF and Bank Rates maintained at 6.75 per cent. The SDF is the decrease band of the rate of interest hall, whereas the MSF is the higher band.
Presenting the sixth and final bi-month-to-month financial coverage of FY24, RBI Governor Shaktikanta Das on Thursday mentioned, “Inflation is on a downward trajectory. Our multipronged policies have worked well to keep the financial system stable.”
He mentioned ongoing wars, and new flashpoints together with the Red Sea disaster impart uncertainty to the worldwide outlook, and financial coverage continues to be actively disinflationary.
For nearly a yr, the Reserve Bank has stored the quick-time period lending price or repo price secure at 6.5 per cent. The benchmark rate of interest was final raised in February 2023 to six.5 per cent from 6.25 per cent to include inflation pushed primarily by world developments.
The retail inflation within the present monetary yr has declined after touching a peak of seven.44 per cent in July 2023, it’s nonetheless excessive and was 5.69 per cent in December 2023, although inside the Reserve Bank’s consolation zone of 4-6 per cent.
The MPC is entrusted with the duty of deciding the coverage repo price to realize the inflation goal, holding in thoughts the target of development.
In an off-cycle assembly in May 2022, the MPC raised the coverage price by 40 foundation factors and it was adopted by price hikes of various sizes, in every of the 5 subsequent conferences until February 2023. The repo price was raised by 250 foundation factors cumulatively between May 2022 and February 2023.
The MPC consists of three exterior members and three officers of the RBI.
The exterior members on the panel are Shashanka Bhide, Ashima Goyal, and Jayanth R Varma. Besides Governor Das, the opposite RBI officers in MPC are Rajiv Ranjan (Executive Director) and Michael Debabrata Patra (Deputy Governor).
