Indicating the achievement of desired results with RBI's monetary policy actions, the central bank announced its second round of rate pause on Thursday. RBI's monetary policy committee announced to keep the repo rate unchanged at 6.5%, announced RBI governor Shaktikanta Das. He also said that India's CPI inflation eased in past months and retained GDP forecast for current financial year.
The MPC expressed its concern about sticky inflation which can become a cause of worry due to uncertain monsoon and volatility in international commodity prices and global financial markets. RBI projected CPI inflation for FY24 at 5.1 per cent. The GDP growth rate was predicted at 6.5% for FY24. Other than this, the RBI allowed banks to issue Rupay prepaid forex cards and expand the opportunities of e-rupee vouchers for non-banking firms. The minutes of the MPC will be released on June 22.
-MPC announced to keep the repo rate at 6.5%. Standing Deposit Facility Rate remains at 6.25%. Marginal Standing Facility Rate and Bank Rate are unchanged at 6.75%.
All the members of the Monetary Policy Committee unanimously voted to keep the policy repo rate unchanged at 6.5% for the second time. The members of the MPC included Dr. Shashanka Bhide, Dr. Ashima Goyal, Jayanth R. Varma, Rajiv Ranjan, Michael Debabrata Patra, and Shaktikanta Das.
-RBI projected CPI inflation for FY24 at 5.1 per cent. Breaking down inflation projections every quarter, RBI predicted inflation at 4.6% for Q1FY24, 5.2% at Q2FY24, 5.4% at Q3FY24, and 5.2% at Q4FY24.
-"Inflation still remains above the 4% target and just being the 2-6% is not enough. Risks to CPI inflation forecast evenly balanced. Goal is to reach the targeted 4% inflation going forward," said RBI Governor.
-CPI inflation is still above RBI's target of 4% and is expected to remain above it through 2023-24 as per our forecasts.
-Flagging concern about the growing inflation, RBI Governor said that given the uncertainty in monsoon season and international commodity prices and financial market volatility, inflation remains a risk for the economy.
-RBI MPC keeps GDP growth rate at 6.5%. On a quarterly basis, the GDP growth rate stands at 8% in Q1FY24, 6.5% in Q2FY24, 6% in Q3FY24, and 5.7% in Q4FY24.
-Reserve Bank will remain nimble in liquidity management, RBI to ensure orderly completion of govt. Market borrowing program in the stipulated time.
- RBI Governor Shaktikanta Das said that MPC will take further monetary actions as required to keep inflation expectations firmly anchored. He also announced that the real policy rate will continue to be positive and the average system liquidity is still above the average margin in surplus mode. It could further increase as ₹2,000 banknotes get deposited in banks.
-RBI also allowed banks to issue Rupay prepaid forex cards. With this, the RBI also announced to expand the scope of the e-rupee voucher. To let this happen, non-bank companies would be able to issue such instruments on their own.
-Governor Shaktikanta Das also said that RBI will remain aware and play a proactive role in dealing with emerging risks to price and financial stability.
The net Foreign Portfolio investment (FPI) inflows stand at $ 8.4 billion during the FY23-24 upto June 6, said RBI governor Shaktikanta on Thursday. In contrast to this, the net FPI was $14.1 billion in 2021-22 and $5.9 billion in 2022-23.Indi
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