The Reserve Bank of India (RBI) Governor Shaktikanta Das today announced that the monetary policy committee (MPC) has decided unanimously to keep the policy repo rate unchanged at 6.50 per cent.
The Monetary Policy Committee (MPC) met on 4th, 5th and 6th October 2023. As per a statement issued by the RBI today, after a detailed assessment of the evolving macroeconomic and financial developments and the outlook, it decided unanimously to keep the policy repo rate unchanged fourth time in a row.
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 per cent. The MPC also decided by a majority of 5 out of 6 members to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth.
The statement mentioned that the headline inflation had surged in July driven by tomato and other vegetable prices. The statement added that it corrected partly in August, and is expected to see further easing in September on the back of moderation in these prices. It further added that a silver lining amidst all these is declining core inflation, i.e., CPI excluding food and fuel. It further said, the overall inflation outlook, however, is clouded by uncertainties from the fall in kharif sowing for key crops like pulses and oilseeds, low reservoir levels, and volatile global food and energy prices.
As per the statement issued by the RBI, the real GDP growth for 2023-24 is projected at 6.5 per cent with Q2 at 6.5 per cent; Q3 at 6.0 per cent; and Q4 at 5.7 per cent. It added the the risks are evenly balanced and the real GDP growth for Q1:2024-25 is projected at 6.6 per cent.
The statement also mentioned that the MPC remains highly alert and prepared to undertake timely policy measures, as may be necessary, in order to align inflation to the target and anchor inflation expectations.
