RBI MPC Meeting: Repo rate unchanged at 6.5%, ‘withdrawal of accommodation’ stance | Mint
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Business News/ Economy / RBI MPC Meeting: Repo rate unchanged at 6.5%, ‘withdrawal of accommodation’ stance

RBI MPC Meeting: Repo rate unchanged at 6.5%, ‘withdrawal of accommodation’ stance

RBI MPC Meeting: The MPC maintained the policy stance as 'withdrawal of accommodation' by 5 out of 6 majority. The announcements are in line with expectations.

Shaktikanta Das, the governor of the Reserve Bank of India. (HT)Premium
Shaktikanta Das, the governor of the Reserve Bank of India. (HT)

RBI Monetary Policy (MPC) Meet: The Reserve Bank of India's MPC has kept repo rates unchanged at 6.5 percent, RBI Governor Shaktikanta Das announced on December 8.

“The RBI MPC has decided unanimously to keep the policy repo rate unchanged at 6.50 percent. Consequently, the standing deposit facility (SDF) rate remains at 6.25 percent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 percent," Das said.

“The MPC also decided by a majority of 5 out of 6 members to remain focused on the withdrawal of accommodation to ensure that inflation progressively aligns with the target, while supporting growth," he added.

Real GDP growth is projected at 7 percent for the current year, FY23-24. CPI inflation is projected at 5.4 percent for FY24.

Track our LIVE coverage of the RBI Monetary Policy here

What was expected?

Experts had anticipated that the central bank would likely keep the short-term interest rate unchanged in its upcoming MPC review this week. This expectation stemmed from India's inflation remaining within a comfortable range and the economy showing accelerated growth.

The RBI has maintained the benchmark policy rate (repo) at the same level for the past four bi-monthly monetary policies. The last adjustment to the repo rate was an increase in February 2023, setting it at 6.5 percent. This adjustment concluded a series of interest rate hikes initiated in May 2022 due to the repercussions of the Russia-Ukraine war and subsequent disruptions in the global supply chain, which led to elevated inflation within the country.

Also Read | RBI MPC Meeting: UPI transaction limit for hospitals, educational institutions payments raised to 5 lakh

India continues to hold its position as the world's fastest-growing major economy. The GDP expanded at a rate of 7.6 percent in the July-September quarter, surpassing expectations. This growth was fueled by increased government spending and advancements in the manufacturing sector.

The RBI MPC meeting was held from December 6 to December 8, with Governor Das, leading discussions for the committee.

The MPC's primary responsibility is to determine the policy repo rate, aiming to achieve the targeted inflation rate while considering growth objectives.

The RBI MPC consists of six members – both external and RBI officials. Alongside Governor Das, RBI officials are Rajiv Ranjan, serving as Executive Director, and Michael Debabrata Patra, as the Deputy Governor. While Shashanka Bhide, Ashima Goyal, and Jayanth R Varma are the external members.

Das will address a post-policy press conference at noon on December 8.

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Published: 08 Dec 2023, 10:15 AM IST
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