The RBI’s Monetary Policy Committee on Thursday, February 8, determined to maintain the important thing repo price unchanged for the sixth consecutive time at 6.5 per cent having a stance with the give attention to the withdrawal of lodging. It saved the FY24 inflation forecast unchanged at 5.4 per cent, and maintained the established order on the FY24 GDP projection at 7 per cent. The RBI additionally proposed to take different measures. Here are the highest choices of the RBI on Thursday:
Repo Rate, SDF, MSF Unchanged
The RBI MPC determined to maintain the repo price unchanged for the sixth time in a row, at 6.5 per cent. The resolution has been taken with 5 members in favour of the choice out of the whole 6. The coverage stance continues to be ‘withdrawal of accommodation’.
The RBI MPC additionally saved 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.
FY24 Inflation Forecast Kept Unchanged At 5.4%
The RBI has additionally saved the inflation forecast unchanged at 5.4 per cent for 2023-24.
“Adverse weather events remain the primary risk with implications for the rabi crop. Increasing geopolitical tensions are leading to supply chain disruptions and price volatility in key commodities, particularly crude oil. On the positive side, the progress in rabi sowing has been satisfactory and augurs well for the season. Prices of key vegetables, especially onions and tomatoes, are registering seasonal price correction,” Das mentioned.
Taking into consideration these elements, CPI inflation is projected at 5.4 per cent for the present 12 months (2023-24) with This fall at 5.0 per cent. Assuming a traditional monsoon subsequent 12 months, CPI inflation for 2024- 25 is projected at 4.5 per cent with Q1 at 5.0 per cent; Q2 at 4.0 per cent; Q3 at 4.6 per cent; and This fall at 4.7 per cent, he added.
FY24 GDP Forecast Unchanged At 7%
The RBI has saved the FY24 GDP projection unchanged at 7 per cent.
“Domestic economic activity remains strong. The first advance estimates (FAE) placed the real gross domestic product (GDP) growth at 7.3 per cent for 2023-24, marking the third successive year of growth above 7 per cent,” the RBI governor mentioned.
Going ahead, the momentum of financial exercise witnessed throughout 2023-24 is predicted to proceed within the subsequent 12 months (2024-25), he mentioned.
Key Fact Statement for Retail and MSME Loans & Advances
To improve transparency on mortgage info for debtors in key information assertion (KFS), the Reserve Bank of India (RBI) on Thursday mentioned mortgage processing charges, documentation charges, and different costs should be loaded into the precise rates of interest. RBI Governor Shaktikanta Das mentioned it will present prospects with a transparent concept of the particular annualised rate of interest they pay on the mortgage.
Review of the Regulatory Framework for Electronic Trading Platforms
The Reserve Bank’s extant regulatory framework for digital buying and selling platforms (ETPs) was issued in 2018. In view of the following developments in markets, merchandise, and expertise, and many others., a revised regulatory framework for ETPs will likely be issued for stakeholders’ suggestions.
Hedging of Gold Price Risk in Over-the-Counter Market In IFSC
In December 2022, the Reserve Bank had permitted resident entities to hedge their gold worth danger in recognised exchanges within the IFSC. It has now been determined to additionally permit resident entities to hedge the value of gold within the over-the-counter (OTC) section within the IFSC.
This will present extra flexibility to resident entities in hedging their publicity to gold costs.
Aadhaar-Enabled Payment System
Aadhaar-Enabled Payment System (AePS) has performed an necessary function in monetary inclusion by enabling prospects to make digital fee transactions by way of service suppliers similar to enterprise correspondents.
“Given their significance, it is proposed to streamline the process for on-boarding of AePS service providers and introduce some additional fraud risk management measures. These measures will further strengthen the security of the AePS system and enhance its robustness,” Das mentioned.
Framework for Authentication of Digital Payment Transactions
To facilitate adoption of different authentication mechanisms for enhancing the safety of digital funds, the RBI proposes to place in place a precept-primarily based framework for authentication of such transactions.
Central Bank Digital Currency
The CBDC Retail (CBDC-R) pilot presently permits Person to Person (P2P) and Person to Merchant (P2M) transactions. It is now proposed to allow further functionalities of programmability and offline functionality in CBDC retail funds.
Programmability will facilitate transactions for particular/focused functions, whereas offline performance will allow these transactions in areas with poor or restricted web connectivity.
