The Reserve Bank of India’s (RBI) monetary policy committee (MPC) on Thursday has decided to keep the repo rate unchanged at 6.5%, RBI governor Shaktikanta Das said.
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For the fiscal 2023–24, the second bimonthly monetary policy meeting took place over a three-day period beginning on Tuesday, June 6, and ending on Thursday, June 8.
The policy repo rate was predicted to remain at 6.5% by the street. The market anticipated the RBI would keep the policy repo rate at 6.5 percent. Experts claim that the lowering of retail inflation in April and the possibility for future decreases demonstrate the effectiveness of earlier policy rate moves.
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The MPC retained the repo rate at 6.5% in its first bimonthly policy meeting for the new fiscal year 2023–24 (FY24), which was held on April 6. Since last May, the repo rate has already been increased by a total of 250 basis points in an effort to bring down in inflation.
The central bank has kept stability as a priority, according to RBI Governor Shaktikanta Das. Fundamentals for the domestic economy are improving. He added that there is still more work to be done in terms of normalising policy around the world.
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“We can derive satisfaction from the fact that Indian economy and finance sector stand out as resilient,” said Das.
According to Das, the MPC also decided to continue focusing on the withdrawal of accommodations by a vote of 5 out of 6 members.
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Das stated that the headline inflation is higher than the target of 4% and is expected to stay higher for the rest of the year.From a 5.2% projection in its April policy, the RBI has lowered its inflation target to 5.1%.
Shaktikanta Das, governor of the RBI, stated that real GDP growth is projected to be 6.5% for FY24, with Q1 at 8%, Q2 at 6.5%, Q3 at 6%, and Q4 at 5.7%.
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According to the most recent data, headline inflation is still above goal, and the predictions for 2023–2024 indicate that this will continue.
