Ajit Karn
Thursday, following the conclusion of its three-day Monetary Policy Committee (MPC) meeting led by governor Shaktikanta Das, the Reserve Bank of India (RBI) announced its key rate decision. At the previous MPC meeting on April 6, the RBI resolved to halt its rate hike cycle and maintain the repo rate at 6.5%.
Here are RBI’s most important announcements:
- The Monetary Policy Committee (MPC) votes unanimously to maintain the reserve rate at 6.5%. The MPC will remain focused on the withdrawal of policy accommodation.
- The retail inflation forecast decreased to 5.1% from 5.2% previously. It is probable that headline inflation will remain above the 4% target for the remainder of the year.
- Domestic demand conditions continue to be conducive to expansion.
- The projected real GDP growth for FY23/24 is 6.5%.
- The projections for each quarter are as follows: Q1 is 8%, Q2 is 6.5%, Q3 is 6%, and Q4 is 5.7%.
- The net inflow of non-resident deposits increased from USD 3.2 billion in FY’22 to USD 8 billion in FY’23.
- Since this year’s January, the Indian rupee has remained stable.
- The current account deficit is anticipated to moderate further in the fourth quarter and remain manageable. Forex reserves are at acceptable levels.
- Due to geopolitical circumstances, global economic activity will decelerate.
- MPC will continue to take prompt and appropriate policy actions to securely anchor inflation expectations.
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