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Business News/ Economy / RBI monetary policy: Shaktikanta Das-led MPC keeps repo rate steady at 6.50%. Predicts 6.5% GDP growth in FY24
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RBI monetary policy: Shaktikanta Das-led MPC keeps repo rate steady at 6.50%. Predicts 6.5% GDP growth in FY24

RBI policy meeting: Governor Shaktikanta Das led monetary policy committee

In previous RBI monetary policy meeting held from 3rd to 6th April 2023, Shaktikanta Das led monetary policy committee kept repo rates unchanged at 6.50 per cent. (Bloomberg)Premium
In previous RBI monetary policy meeting held from 3rd to 6th April 2023, Shaktikanta Das led monetary policy committee kept repo rates unchanged at 6.50 per cent. (Bloomberg)

RBI monetary policy meeting: In a bid to keep the uptrend in micro and macro economic growth in India, Shaktikanta Das led monetary policy committee (MPC) unanimously decided to keep the repo rate unchanged at 6.50 per cent for third straight meeting in a row. The RBI governor also re-iterated that the MPC has maintained its ‘accommodative’ stance on the interest rate hike.

Announcing about the RBI policy committee meeting outcome, RBI Governor Shaktikanta Das said, “The monetary policy committee unanimously decided to keep the repo rate unchanged at 6.50 per cent."

The RBI Governor went on to add that Indian economy is 5th largest economy in the world and India's contribution in global growth is to the tune of 15 per cent. He said that amid challenges in global economy, India has managed to keep inflation under control. He said that Indian banks are sitting at handsome cash reserves hinting smooth credit line availability for the various infrastructure projects (both under pipeline and that are underway). 

RBI's prediction on GDP growth in FY24

RBI Governor Shaktikanta Das went on to add that India's inflation at 6. 4 per cent in Q1FY24 is in line with the RBI's expectations. However, he predicted correction in vegetable prices in next few months. He said that overall inflation in the financial year 2023-24 is expected to remain at 6.5 per cent.

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CPI inflation in FY24

The RBI Governor said that challenges from the high interest regime in global economy is expected to keep putting pressure on India's growth theme and said that consumer price index (CPI) to remain at 5.40 per cent in FY24, which stood at 5.1 per cent in FY23. So, retail inflation in FY24 is expected at 5.4 per cent against 5.1 per cent in FY23.

Speaking on RBI policy meeting outcome, Pratapsingh Nathani, Chairman & MD at Beacon Trusteeship said, “In its monthly policy statement, RBI continued to maintain its old stance of maintaining the repo rate at 6.50% however being watchful on inflation target of 4% & over the sudden spurt in agricultural prices (onion tomato cereal & pulses). CPI Inflation has moderated by 100 bps from January 2023 so there is a feeling that there may be some spike in inflation due to agri prices but will correct within the next couple of months. While the Indian economy is shows signs of robustness, RBI will continue to use instruments available to them in controlling inflation on an ongoing basis."

The RBI monetary policy committee (MPC) announced the first bi-monthly policy for FY24 on April 6.  The MPC, led by RBI Governor Shaktikanta Das, met on April 3, 5 and 6 to review the current monetary policy. In this RBI MPC meeting, experts were expecting 25 bps interest rate hike to 6.75 per cent. But, RBI MPC thought otherwise and kept repo rate unchanged a 6.50 per cent. Later on in June 2023 MPC meeting too, the RBI MPC had decided to keep the repo rate steady at 6.50 per cent.

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ABOUT THE AUTHOR
Asit Manohar
Chief Content Producer at Live Mint Digital Team
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Check all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates.
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Published: 10 Aug 2023, 10:05 AM IST
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