The Reserve Bank of India Governor also stated that the bank is prepared to take action if necessary and that the repo rate will remain at 6.5 percent.
The RBI Monetary Policy Committee (MPC) chose to maintain the policy repo rate at 6.50 percent, along with all other policy rates. Governor Shaktikanta Das stated that the repo rate rise and accommodation pullout had been put on hold solely for this meeting.
The following are the main points from the policy meeting:
- The RBI agreed to maintain the repo rate on Thursday as long as inflation remained sticky. Since May 2022, the central bank has already raised the repo rate by a total of 250 bps.
- According to Governor Das, the RBI would continue to concentrate on the removal of monetary policy accommodations.
- Policy choices made after May 2022 are still being implemented. He said that the banking and non-banking financial systems are still strong.
- The RBI slightly increases its forecast of GDP growth for FY24 from its previous estimate of 6.4% to 6.5%.
- According to Governor Shaktikanta Das, 5.2% inflation is expected in FY 2023–2024. “Overall inflation is higher than expected, but the current policy rate is still supportive.”
- Das stated during the conference that the RBI will create a centralised site to look across several banks for unclaimed deposits.
The window for rate increases has passed
Market participants do not anticipate the central bank to pursue more rate increases since doing so would divert attention to the year’s lackluster growth. “We think the time for treks is over. As a result, we no longer anticipate any more rate increases from the MPC in FY24, according to Rahul Bajoria, a Barclays economist for India.
What does RBI’s MPC decision mean?
Ans. The RBI’s Monetary Policy Committee unanimously opted to maintain the policy repo rate at 6.5 percent, representing an increase of 250 basis points overall for this cycle. The RBI governor did, however, note in his policy statement that this halt came after a total increase of 290 basis points and not 250 bps.
What is the rate on the repo right now?
Ans. The Reserve Bank of India (RBI) lends money to commercial banks and other financial institutions in India at a rate known as the repo rate in exchange for government securities. The repo rate for 2023 is now 6.50%. The movement of money in the market is impacted by changes in the repo rate.03-Mar-2023
What will be the RBI’s interest rate in 2023?
7.5% repo rate
7.5% bank rate
3.5% Reverse Repo Rate
6.75% is the marginal standing facility rate.